Anyone who understands anything about politics in Alberta understands there’s one issue above all others likely to make Albertans really angry at their provincial government: out-of-control utility rates.
So there is no way to interpret news stories about a 66-per-cent rate spike for electrical expected this month in the Edmonton area but as extremely bad news for the Alberta Progressive Conservatives at a sensitive moment in their party’s history.
Voters may not understand the details of the “deregulation” implemented when Ralph Klein was premier, or why it led to much higher prices — who does? But they sure as heck understand the impact.
After all, it hits them right in their wallets, which is pretty hard to ignore. A typical household will pay about $30 more per month starting this month — and there’s no promise things will ever get any better as deregulated power companies close down plants and then jack up rates. The utility companies have found that the iron law of supply and demand is just dandy if you happen to be the one who controls the supply.
Worse, there will likely be more shocks to come at the corporate infrastructure construction lobby and its friends in the provincial government continue to push massively expensive power line construction projects that are of, as it were, dubious utility.
Meanwhile, as their power bills skyrocket, Albertans know exactly whom to blame: “Ed Stelmach and his Conservatives.” It may have been Ralph Klein’s government that flipped the switch, but it’s Ed Stelmach and whoever succeeds him who are most likely to feel the shock!
It hardly helps the Conservatives that all but one of the current candidates for their leadership are known to have been sitting on their hands in cabinet while this situation grew worse and worse.
This is no idle notion dreamed up by some obscure blogger. Anyone who is paying attention in Alberta knows that this is a fundamental truth. You can hear a version of this conversation on almost any day in any venue in any part of Alberta.
The overwhelming popular wisdom, which is most certainly true, is that it was government incompetence that got us to where we are now. A significant portion of the people who have reached that conclusion also think that an incompetent government can’t be trusted fix the problem. A substantial minority suspect the problem was caused by an outright conspiracy, rather than mere incompetence.
Anyone doing serious public opinion research in Alberta realizes that, whether or not it shows up as the No. 1 “top of mind” issue for Albertans, which is usually health care, the corrosive effect of soaring utility rates is this government’s most significant point of vulnerability.
That’s why it simply can’t be good news for the Tories that this story hit the news just as the Conservatives are trying to reinvent themselves by replacing Stelmach as premier. Indeed, about the only good news for the government in that was that it wasn’t happening in September, when we could have looked forward to an elderly person or two freezing to death because of out-of-control utility prices.
Of course, September is exactly when the Conservatives are likely to hold their leadership vote, so if the present trend continues, this faint ray of promise may have turned into something much bleaker by then.
The utilities, the government and all the usual suspects will have plenty of explanations about why this is happening, and why it’s not their fault.
But as David Gray, former Utilities Consumer Advocate for Alberta, told the Edmonton Journal, “the way that rate is constructed, it’s extremely volatile and it will continue to be. They’ve maximized the risk that goes to the consumer for price changes by putting it all month to month. And so when you have minor changes in the supply-demand relationship you get major changes in pricing.”
Another news story warned consumers that, as bad as the price hikes may be, they shouldn’t let that panic them into signing contracts with (literal) power brokers because those are sure to turn into an even bigger rip-off.
This issue has tended to be a good one for Alberta’s opposition parties — although, counter-intuitively, it’s been the far-right, market-fundamentalist Wildrose Alliance that has made the most of the situation.
The Alliance says they’ll build new natural-gas electricity generating plants where they’re needed, and since insufficient numbers of plants are part of the problem, they’ve hit on a partial solution. Given their bias in favour of privatization, after taxpayers had paid to build them, they’d probably hand the new plants over to the private sector.
Pretty obviously — well, obvious anywhere but here in the New West, anyway — what’s really needed is some good old-fashioned government regulation of this essential service, right through the supply chain. But it’s doubtful that a hard right party like the Alliance would do that, even if they suspected it was what’s actually needed to fix this serious problem.
The Alberta New Democrats have a plan that makes more sense, but in the Bizarro World of Alberta politics, it can barely be spoken aloud. To wit: “Re-regulate Alberta’s power market to protect consumers.”
“This hike is the result of the Tories’ choice to deregulate the province’s electricity market,” said Alberta NDP leader Brian Mason in an April 4 statement. “Consumers have no choice now but to pay so the power companies can play the market. The NDP would re-regulate the market to protect Albertan pocketbooks while assuring a reliable and sustainable electricity system.”
“A responsible NDP government would step in to stop this sort of gouging,” Mr. Mason added. “The Tories, on the other hand, chose to let it all slide.”
Well, true enough, but things are likely to get bad enough fast enough that something will have to be done, and since they are going to all this effort to try to get re-elected, it’s probably the Tories that are going to end up fixing it, or slapping a band-aid on it, anyway.
Either that, or just like the rest of us chickens looking at our April power bills, they’re going to have to pay the price.
This post also appears on David Climenhaga’s blog, Alberta Diary.
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