July 12th, 2024

Deregulation is why we are paying more for utilities


By Lethbridge Herald on April 29, 2022.

Editor:

Provincial and federal elected representatives are fielding complaints of high utility bills while chanting the “Less government, more Canada” slogan. “Less government” is why we pay high vehicle registration and licensing fees. “Less government” or privatization of utilities is exactly the reason why we have such high utility bills. Alta-link – purchased by U.S. and UK-owned Berkshire Hathaway in 2014, charged all Albertans for significant electrical infrastructure over the past few years but neither we nor the government own transmission lines. 

Given time since deregulation, many customers do not understand their choice between regulated and de-regulated utilities. I abandoned an unpleasant experience with a deregulated company a decade ago and it appears I may pay less. 

After all, if you insert a utility re-seller between the wholesaler(s) and the consumer, there must be a significant profit margin. I suggest consumers protest by signing with a regulated provider.

Between distributors (Fortis Alberta, Atco Gas) and consumers are many companies such as Alta-Link, Direct Energy, Enmax and Epcor who are “regulated” or default suppliers. Companies such as Enmax and Epcor have both regulated and deregulated subsidiaries. Additionally, a myriad of deregulated companies and provincial oversight support the deregulated sector.

 All these large organizations have high-paid management and boards.. How many layers of admin costs are being paid? Shortening the supply line may put an untold amount of money back into the hands of the consumer. 

I can’t pretend to completely describe Alberta’s complicated utility system but it is easy to see how high utility charges are needed to accommodate profit margins for all the utility company levels and stockholders. 

Blaming high utility fees on high oil prices (silly consumers who can’t read administration charges!) and carbon tax, the provincial government is laughing and celebrating their royalty fees. Those who shout “Less government” can look forward to being rewarded with future prospects with these private companies.

Barb Goertzen

Coaldale

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Southern Albertan

Agreed. And all the while we struggle with inflation. Corporations win, consumers lose. And, because of all of this, Canada will likely be facing an upcoming recession.

biff

thank you for an insightful letter. energy is a need – typically even to the extent of a life or death need. home energy should never be left to private profiteers, just as water should never be privatised. ever the more egregious is that the sucker public has been roped into paying for the infrastructure roll outs – without getting any equity in return! deregulation here was a scam, as is deregulation typically. energy is a massive money maker.
if we the public maintain ownership over our energy, we can regulate prices fairly, and use the “profits” to help pay for the costs of our other shared needs, such as health, education, and infrastructure. not only can we better maintain all that, we can reduce taxation, which in turn frees up more earnings to help keep the economic wheel greased, as people will have more money available to spend. moreover, regulating energy helps to regulate inflation.
it was my thought, and hope, that a real ndp govt – not the type we had that just mimics an old con govt – would have taken back public ownership over energy, even if not real ownership and control over our oil and gas. (norway always held a majority share of all their oil projects, which resulted in hundreds of billions of public dollars approaching a trillion!…but we let it be stolen, which resulted in only about 15 billion in a “rainy day” fund. add to that our govts allowed us to be left on the hook for the massive clean up costs related to toxic waste and orphan wells. laughable were it not so friggin’ sick.) instead, our ndp continued to allow greedy profiteers to rip us all off and steal away our wealth. rather than have the piles of monies pour back our way into the public coffers, to be used to benefit us all, our real wealth continued to be “transmitted” to the oligarchs of our planet, that have no care or compassion for much of anything beyond their own need to satisfy their selfishness and greed.

Last edited 2 years ago by biff
Fedup Conservative

Sadly biff the Notley government had no way of taking back the system when it’s so profitable for the new owners. It should never have sold in the first place as my father pointed out . While we watch them selling plans in the department stores former employees tell us there is such a huge amount of wealth in just the fees alone they don’t care about the selling of energy part of it.

Outside of Ontario no other provinces have been dumb enough to do it. They copied Klein.

Fedup Conservative

Barb my late father was a power plant engineer and everything he said would happen under deregulation has happened. Just the fact that the Klein government , we were told, sold the system and equipment valued at $7 billion for $2 billion and then gave the industry $4 billion in rebates shows how badly Albertans got screwed, then add up what our monthly fees are costing us and it makes you sick.

It was such a wonderful deal even one of the richest guys in the word Warren Buffet couldn’t resist it and bought the system for $3 billion. Taking Notley’s caps off the industry to further help the industry screw Albertans like Kenney did just adds to the stupidity. Trying to blame it on Notley just adds to the stupidity while many of our fellow seniors believe the lies Kenney is feeding them.

gs172

I’m not going to disagree that power rates in Alberta are high..too high. But I’m going to lay the blame elsewhere. It’s not the generators that are the majority of my bill. My rate is locked in at 6.6 cents a kwh which made my power cost $40 using 607 kwh last month. The other $93 was distribution, access, municipal franchise and administration fees. And that’s the government’s and more specifically the AESO’s fault for letting them overbuild our grid. This portion adds 15 cents a kwh making it 21 cents a kwh total. The municipal franchise fee is calculated as a percentage of the distribution amount. After seeing Calgary come clean on collecting an extra 47 million in franchise fees I wonder where the city of Lethbridge sits on this. While I’m sure it’s not 47 million after taking a look at the cities financial statements from 2020 and 2021 it looks like a couple million in extra revenue last year compared to 2020.

Last edited 2 years ago by gs172
buckwheat

An approximation can be made as to what the City collects in municipal fees by taking your cost and multiplying by 40,000. That is just the residential portion. And then multiply by 12. Probably in the 16-20 million a year range.