CALGARYThe Alberta Government has taken the next step in restructuring Alberta’s electrical industry to encourage a more competitive marketplace and competitive prices for consumers.
The province has accepted the results of the recent auction to give qualified companies the right to sell electricity generated by power facilities around the province. The auction generated $1.1 billion. “The Alberta Government is currently working on a program to return the one billion dollars in revenue generated by the auction directly back to Alberta electricity consumers. Details are being worked out at the moment that will provide assistance to Albertans with the rising cost of electricity,” said Mike Cardinal, Minister of Resource Development. The $1.1 billion auction total reflects the fair market value. “Some critics have suggested the power auction could have raised as much as $4 billion. If the auction had raised that much, consumers would have had to pay more in electricity rates to allow the bidders to recover their investments,” added Cardinal.
Changes to the electricity marketplace will include steps to ensure Albertans enjoy full consumer protection. Electricity retailers will be licensed and subject to legislated standards of conduct. Consumers can expect to see information updates over the coming months. They will have ample time to consider service options from new suppliers, compare prices and find the best package to suit their specific needs.
The new marketplace in Alberta is in step with changes taking place around the world. Similar moves elsewhere have shown that competition benefits consumers. However, consumers are reminded electrical prices are also affected by factors such as the price of the natural gas. Natural gas is used to generate roughly 20 percent of Alberta’s electrical power.
Although consumers may see some higher power prices in the fall as natural gas costs go up, the goal over the long term is to make sure Albertans benefit from competitive electricity rates. The province is already seeing significant investment in new power generation since deregulation began. Between 1996 and 2003, there will be 2,720 MW of new generation, enough to meet the equivalent needs of Edmonton and Calgary combined.