Almost annually since the mid ’90s when the government deregulated electricity rates there's been about a two-month period when panic sets in and Albertans struggle to decide if they should lock into a long-term plan or continue to have their bills bounce around each month.
This year is no different. With a major jump in power rates this month — up to $15.11 cents per kilowatt hour, nearly double that of the fall — people are scrambling to sign up at rates that now range from eight cents to 10.99, and rising.
Utilities have been flooded recently with calls and orders for contracts. And, as is the norm with the current Conservative government, they've gone into hiding. That's to be expected. They helped create this situation and they're not likely to take the high road and admit they made a mistake or do anything to try to fix it.
The highest power rates in Alberta in a decade are being blamed on strong demand and unexpected plant shutdowns. Genesee 3, along with Keephills 3 that came online early last year, was supposed to offset the shutting down of the Wabamun plant in 2010. However, Genesee 3 was shut down in early November. It was scheduled to be back in operation in five weeks but repairs to its turbine/generator bearings still haven't been completed. And other plants haven't been running at full capacity for a variety of reasons, prompting some industry experts to wonder why companies were doing maintenance now instead of in the summer when the demand is traditionally lower.
Of course, opposition politicians aren't missing the chance to attack the government.
NDP leader Brian Mason said this week the Redford government should immediately freeze prices at a reasonable level and take steps to stop the price fluctuations.
“The swings are getting bigger and the volatility of power prices is increasing. I don't believe the families and the businesses of Alberta should be subjected to a system that cannot produce reliable power at a reliable price and at an affordable price.
“Frankly, I don't know why Albertans are willing to put up with this crap.”
Well, the reason is simple: we don't have any choice at the moment. Either pay up or get your power cut off. Fortunately it's been, to this point, a surprisingly mild winter, but we all know that won't last.
Odds are winter will hit us just about the time power prices really peak in February. So what can we do? Again, there's not much choice. Either sign a contract at a fixed rate or try to ride out the high price cycle and wait for the lower prices to return. One positive about power prices is that, unlike the price of gasoline, they usually do fall back close to previous levels.
The thing with a contract is, while you're not locked in long-term, it takes 30 days to get out of the agreement. So you sign a contract, the electricity rates fall, you apply to get out of the contract and by the time you do, the price could be surging again because some power company decided to shut down a plant.
It's one more gamble that Albertans should not have to take, especially when the government was warned before deregulation that the odds were prices would go higher, not lower. It's not so much because of customer demand as it is about the supply and industry’s unending search of higher profits.
