By Lethbridge Herald on December 9, 2023.
Are you concerned or confused with everything regarding electricity cost now and in the future? All these discussions about increasing the carbon tax and net- zero carbon electricity grid.
I certainly am. Up until recently I purchased my power from the City of Lethbridge. My bill went from an average of $0.03/kWh in 2016 to $0.06/kWh in 2020 to a whopping $0.15/kWh in the spring of 2023. Not to mention all the added charges. At the last count there are 11 additional charges.
My first instinct would be to blame the City of Lethbridge or the present provincial and federal governments.
But hold on, there are a lot of complications and history behind what we are all facing when it comes to paying for electricity.
First let me say that I was negligent in my decision not to buy into a contract.
I was warned by friends who are experts regarding how electricity is generated and sold in Alberta, and I didn’t listen and paid the price.
Was there also negligence by not consulting experts by the provincial government? The answer is yes.
• It all starts in 2000 when the then PC government decided to get out of the power generating business. The PPA (Power Purchase Arrangement) Auction was held in 2000.
This auctioned the power output from the existing coal plants in the province, using 20-year contracts due to expire at the end of 2020.
• The government raised about $2.5 billion which was placed in the balancing pool, then was drawn down upon, crediting everyone’s power bills for the length of the contract.
• Companies were leery to enter into a long-term 20-year contract with government so a force majeure clause was added, to account for any unforeseen changes into the future, mostly due to government intervention which would adversely affect their profitability for the duration of the contract.
• In 2007 after consultations with the generators, the Progressive Conservatives instituted SGER (Specified Gas Emitters Regulation), which effectively added a $15/ton carbon price to the heavy emitters for producing greenhouse gases.
• After the NDP were elected to office in 2015, instead of repealing SGER, they added an additional $15/ton carbon tax on top of SGER.
This increase in the carbon tax added to the PPA auction contracts amounted to a total of $30/ton, thus triggering the force majeure clause.
The contract holders then nullified the contracts, handing them back to the province.
The NDP tried to falsely call this an Enron Clause and tried to sue the PPA holders to force them to keep the contracts. The NDP lost the lawsuits and were forced to buy out the duration of the contracts to the tune of approximately $1 billion.
• If the NDP government would have let the remaining four years of the contract run out or at least consulted with power producers they would have saved the taxpayers $1 billion.
Instead they made the decision to no longer generate energy from coa, committing us, the Alberta taxpayers, to pay $93 million a year until 2030 even though we will no longer be generating energy from coal by 2024!
That’s a cost of over $1 billion with absolutely no tangible benefit to the taxpayers!
To the readers of the Hearld, I hope you found this informative, and I am guessing, you might want to know what happened to the $2.5 bBillion that placed in the balancing pool?
More to come.