Albertans overpaid on electricity bills for decades: report

Consumers overpaying for electricity: report Alberta's electricity rates are under the microscope, as a new report claims consumers have overpaid by billions.

A new report says when the province deregulated electricity generation in 2001, it forced Albertans to pay billions more for their power.

The Alberta Federation of Labour (AFL) says its report, called Power in the Public Interest, "lays bare the failures of the current system."

"The change to deregulated electricity generation was an ideological leap of faith," said AFL president Gil McGowan.

"Returning to a regulated system is the opposite of that – it's a return to the tried, tested, and true."

In its report, the AFL said Albertans are currently paying "the highest consumer electricity prices in the country."

"Since the province deregulated power generation in 2001, Alberta's electricity consumer price index increased by an average of 1.8 per cent per year higher than that of Canada as a whole, or double the difference prior to deregulation," the AFL said.

That's equivalent to $24 billion more for electricity in Alberta than in other Canadian provinces.

The AFL says electricity also "needs to be treated differently" as a commodity.

"Regulated markets don't allow companies to exercise their market power at the expense of consumers, like what occurred with the price spikes in Alberta in 2021-2023 that was facilitated by Alberta's energy-only market," the group said.

McGowan says recent efforts from the provincial government to help have resulted in lower prices, but says there is "way more volatility" in Alberta.

"We used to be regulated, we used to have predictable prices, and they were lower," McGowan said.

"The act that the government has introduced has maintained the de-regulated power market, so prices are down now but they are probably going to be up again."

He says Alberta needs to re-regulate power generation to do away with price gouging and ensure reliability.

AFL also suggests the creation of a Crown corporation, Alberta Power, to restore control over the province's power system and take it away from a small group of private companies that currently own 54 per cent of the province's power generation.

"This isn't just about lower bills – it's about creating good jobs, ensuring a stable grid, and accelerating our transition to clean energy. As workers and as citizens, we have the right to demand better," he said.

Province responds

Alberta’s minister of affordability and utilities says a regulation change is not coming under a UCP government.

He says that would cost Alberta taxpayers billions of dollars and push away investors.

“We are proud that Alberta is the only province free from debt on power generation projects, which frees up public dollars to directly support Albertans,” he said.

“We have work to do to make sure our grid is stable, but we think it can provide — and it does often provide — the lowest cost of electricity available.”

Somewhere in the middle

Experts say the truth about our power bills likely falls somewhere in the middle of what the AFL report claims and what the minister says.

“The past three years have been extreme, and so Albertans have every right to be upset, especially those who have been on floating rates and exposed to that volatility,” University of Calgary Associate Professor Blake Shaffer said.

“(The provincial government) certainly weren’t the reason prices came down — that was supply. But I also wouldn’t blame them for prices going up.”

Shaffer says the issue was the ending of power purchase agreements in 2021.

“What happened was power reverted to a few companies or power plant control, and you had a tightening of concentration, and that just led to offer prices rising,” he told CTV News.

“But of course, the cure for high prices is high prices, and that’s what we saw in Alberta‘s open market: a flood of investment coming in. So, now we’re to the point where we’re kind of in a glut of electricity.”

Shaffer believes that all leads to an evening out of sorts.

“If we were to redo that same analysis, incorporating all of 2024 and 2025 and maybe even 2026 and 2027, we’d start to say maybe we’re benefitting on the energy front.”