Alberta is importing Ontario’s electricity mess
A recent Postmedia story discussed how some churches in Ontario are inundated with requests for help – not for food or clothing – but money to help people pay their electricity bills.
Last October, columnist Anthony Furey highlighted several, genuine tales of woe involving Ontario ratepayers, and their skyrocketing electricity bills. For instance, Furey described how a grocery store in Echo Bay, Ontario, had to close its deli and bakery section due to high electricity bills.
With so many negative news stories about electricity reform in Ontario, the question is – why is Alberta’s NDP government copying many of Ontario’s failed electricity policies?
Note that in 2015, Ontario’s Auditor General indicated in a scathing report that, due largely to government reforms, electricity prices rose by 70% from 2006 to 2014 and customers had been overcharged $37 billion. Ouch.
In December 2016, the Toronto Star ran a story noting that an Ontario company decided to expand in the United States instead of Ontario. Why? The Star notes “rising Ontario electricity rates” as the reason. That same month, the Globe and Mail noted business owners in Ontario felt rising electricity bills were a “threat to their survival.”
As Lorne Gunter has pointed out, Ontario government electricity policies have led to Ontario losing thousands of manufacturing jobs.
Rising power bills is the last thing Alberta needs right now as we struggle with a recession, but here are a few examples of Ontario electricity policies that Alberta’s government is copying.
First, the Ontario government announced in 2003 that coal power plants would have to shut down by 2007. The government’s rushed approach didn’t work out, but cheap coal power was eventually phased out in 2014.
The Alberta government has also announced a plan to phase out coal power, requiring the low cost power source to be eliminated by 2030. Like Ontario, the Alberta government also refused to entertain the idea of allowing coal power plant companies to remain active if they installed new technology to reduce their emissions.
Second, the Ontario government mandated the power market to purchase, and bill customers for, incredibly expensive wind and solar power. Like Ontario, Alberta is following suit. The Notley government has mandated 30% of the province’s electricity grid to come from renewable power sources by 2030.
The idea of wind and solar power sounds great on the surface, but energy economists will concur that natural gas power is much more cost effective. Further, wind and solar power also require ratepayers to pay for back up power sources to be built. Simply put, when the wind isn’t blowing (or sun isn’t shining), back-up power sources are needed to produce power.
Finally, the Notley government is also copying Ontario’s decision to provide subsidies to ‘green’ energy companies. It’s unclear how much this decision will cost Alberta taxpayers, but many observers estimate the decision will cost in excess of a billion dollars.
Einstein once famously noted, “the definition of insanity is doing the same thing over and over again, but expecting different results.”
Alberta’s NDP government may not be copying every decision the Ontario government made related to electricity reform, but they’ve certainly copied enough to cause concern for ratepayers.
Colin Craig works for the Maning Centre in Calgary and is the author of The Government Wears Prada.
This column was published by Sun media on April 6, 2017.