no escape. Calgary’s commitment to net zero will require more electrical infrastructure – more high-voltage transmission lines and better connections throughout neighborhoods.
So if you think the surcharge on your interest is high now, just wait.
Access fees for county grid and local power lines have doubled in the past 10 years and now Make up, on average, half a housing bill.
These costs will continue to grow, in part, due to the need to decarbonize. But also because the electricity market system here, in Alberta, is prone to overcharging by utilities. These inflated costs are passed on to the taxpayer.
And if that is not addressed now, the cost of achieving net zero could be even more painful.
But first, let’s take a look at how we got here.
Alberta’s energy market is unique to Canada but is similar to competitive “unbundled” markets in other parts of the world, including the United States and Europe.
Beginning in the 1990s, Alberta separated or divided the former electricity monopolies into the component parts of the power system – electricity generation, or power plants; transmission, or high voltage power lines; distribution lines and poles in cities that connect power to homes and businesses; and retail or billing services.
The intent was to create competitive markets for generation and retail services and to use regulations to keep transmission and distribution rates fair for both facilities and customers. But the pressure to expand and over-construct is dumped directly into the system.
Transmission and Distribution are still owned by monopolistic companies in various areas of the province, therefore, to prevent them from engaging in monopolistic behavior, their rates are reviewed and approved by the Alberta Utilities Commission.
The commission is supposed to allow companies to return fees for capital projects and other assets that the system actually needs.
But companies face pressure from their shareholders to get higher rates, and the simplest way for a company to raise prices is to add more infrastructure because the value of the company’s monopoly assets is the backbone of its price – it makes a profit based on what it is. Owns.
Rely on whistleblowers
In addition, like Overcharging scandal By using ATCO’s transmission line to Jasper offerings, carriers can intentionally inflate costs. In the case of ATCO, it awarded a single-source contract to a subcontractor, knowing that the company was charging an excess fee of 30 percent, because that contract was part of a promise to secure profitable business for an ATCO affiliate.
This 30 percent extra cost would have been passed on to the rate payers if there had been a whistleblower within ATCO’s accounting department who had not alerted the commission before the costs were added.
How many deals or other examples of manipulation of numbers can’t be crossed because no one would risk standing in their career to say stop?
Incentives to over-build and over-cost are an issue that needs to be addressed now, because more lines will almost certainly have to be built over the next decade. Both wind and solar energy require a lot of space, so new farms tend to be built in rural areas where there is no transportation infrastructure. New lines will be required to connect the facilities.
Estimates vary, but transmission lines can cost up to $3 million per kilometer. This adds up, and you’ll see the cost on your bill in fees.
A deeper need for change
Alberta will require major upgrades in distribution within cities, too, to handle more rooftop solar and other demand-side generation, to accommodate increased power draw from electric heating systems, major appliances, heating and cooling (particularly with severe weather on the rise) and electric vehicles without Causing power outages and power outages.
The province needs more wind and solar energy, and a better and smarter transmission and distribution system. But those things will likely have high upfront costs, and many Albertans are already buckling under current bills, particularly when it comes to inflation. We see this in the number of families who ask for help in an emergency or whose strength is limited.
We need a plan for how to manage these costs, and we need it soon. This could mean revising pricing formulas for transfer/distribution and reducing retail fees, or it could mean requesting federal funding and assistance from the Bank of Canada for infrastructure to fund future upgrades.
Whatever the solution, Calgary’s net zero commitment means waiting for action that will only allow bills to continue to climb while taxpayer pain deepens.