Canoe

Wednesday, October 11, 2000

Alberta electricity users to share rebate By JOHN COTTER-- The Canadian Press

EDMONTON (CP) -- Industrial and commercial electricity consumers in Alberta will share $760 million in rebates in 2001.

The money will be given to consumers every month for one year starting in January in the form of rebates on their electricity bills, Resource Development Minister Mike Cardinal said Wednesday.

"The money will be returned quickly and simply over a 12-month period," he said.

"Qualified recipients ... include everything from seniors' lodges, apartment buildings and farms to municipalities (and) industry."

The amount of each rebate will be based on consumption.

The program will be funded by $1.18 billion in proceeds from a government auction earlier this year of rights to sell electrical power generated by 10 plants. The sell-off is part of the government's plan to deregulate the electricity generation industry.

Reaction to the province's move was mixed.

Lorne Olsvik, president of the Alberta Urban Municipalities Association, said while the rebates will be welcome next year, consumers could be in for a rough ride after the money is gone.

"The verdict is out," said Olsvik. "I believe in deregulation. This amount of money is going to be good. But there is going to be some short-term pain here."

The problem is that industrial growth is expected to outstrip Alberta's electricity supply until new generation plants come on stream later this decade. The province is already importing power from British Columbia to meet its needs.

Municipalities have already starting paying industries to shut down for brief periods to ensure there is enough power for residential customers, he said. The bill was $28 million in 1999 and is expected to be higher this year.

"They (industry) are going to have to halt their activities to ensure Albertans are going to have power into their homes and into their communities," Olsvik said. "That's how critical it is."

The industrial sector -- represented by the Industrial Power Consumers and Co-Generators Association of Alberta -- supported the rebates but wanted more details on the program from the government.

Association chairman Ron Steffan said the rebates will help cushion some of the price shock deregulation may cause.

"The first year of deregulation is always a very difficult one," he said. "We think the biggest shock is going to be in the first year."

Steffan said industry hopes an expected increase in the natural gas supply and new electricity generating plants will moderate power prices after the rebate program is finished.

The Liberal Opposition said the government is rushing deregulation for political reasons.

While consumers will welcome the rebates in what is expected to be an election year, they should realize the money will be gone by 2002.

"Once one year is over, we get back to looking at some substantially higher electricity rates costs," said Liberal House Leader Gary Dickson. "There is everything political about this."

Last month the province announced that residential electricity consumers will begin receiving rebates of $20 a month starting in January -- a program worth $240 million in total.

The remaining $100 million of the auction proceeds will be spent sometime in the future, Cardinal said.

The government has said such rebates are a one-time thing, although the program could be reviewed down the road if electricity prices remain high.

Premier Ralph Klein has rejected suggestions that such payouts amount to vote-buying for a provincial election expected next spring.

-- Rachel Gibson (rgibson@hotmail.com), October 11, 2000