EDMONTON — Albertans are about to be whacked in the pocketbook as transmission costs on their monthly electricity bills nearly double over the next decade.
The Alberta Electric System Operator (AESO) is forecasting transmission costs for average residential customers will jump from $19 to $33 per month within 10 years, but the brunt of the hike could come in the next two years.
Consumers are on the hook for the $13-billion cost of new electrical infrastructure, including nearly $3.5 billion for a pair of north-south 500 kilovolt direct current lines and about $3 billion for a pair of 500 kilovolt lines from Edmonton and Genesee to Fort McMurray.
AESO spokesman Mike Deising said the new transmission infrastructure is required to keep up in the fastest growing jurisdiction for electricity demand in North America.
“We have to have a robust transmission system to meet that demand,” he said. “You’re seeing investment being made in transmission to ensure the lights stay on.”
He said it is important for Albertans to realize that the investment in new infrastructure is necessary.
“We think it’s important that Albertans have an understanding that the costs are going up, but equally important is why they’re going up because at the end of the day, Albertans — whether residential or industrial — are going to have to pay for these costs.”
He noted wholesale electricity prices in 2014 were below the five-year historical average due to sufficient generation and efficient transmission.
“That says competition is working and that generators have the ability to get their power to market,” he said. “The greater the flexibility there is in the transmission system for them to actually get their power to the grid, the lower that overall wholesale pool price is going to be.”
But critics say the Alberta government, which still regulates transmission, is building too much, too fast and the cost is far too excessive.
“If you look at it, it’s millions and tens of millions and hundreds of millions and, God forbid, billions of dollars … that will be recovered from all levels of customers in Alberta,” said Jim Wachowich of the Alberta Consumers Coalition.
He noted the cost of the two north-south DC lines has already jumped $400 million above the initial estimates so the cost to consumers could go even higher.
“Worst case scenario it goes up $20 a month,” he said. “That’s an extra $240 a year on your electric bill that you can’t avoid because you can’t go off the grid.”
Liberal critic Kent Hehr said the spike in transmission costs will be a burden to some Alberta consumers on low and fixed incomes.
“There is a significant portion of the population that’s barely getting by as it is and this will no doubt impact their ability to survive and thrive in this province,” he said.
The provincial government initially said the hike on monthly bills to cover the cost of new power lines would be less than the price of a cup of coffee.
“That’s a pretty expensive cup of coffee,” NDP electricity critic Brian Mason remarked Friday.
Mason noted the costs of building transmission lines had previously been evenly split between electricity generators and consumers until the Klein government deregulated the electricity system and changed the policy.
“We think the policy is unfair to consumers and we think the massive transmission projects that are underway in this province are much larger and more expensive than they need to be,” he said. “They may be in fact intended in the future for export of electricity to the United States and it is hardly fair for the average homeowner to have a very, very large increase on their bills in order to pay for this.”
Independent MLA Joe Anglin, who made headlines and a political career out of his fight on behalf of landowners against the power lines, said some new infrastructure is necessary but the governing Tories have approved “an amazing overbuild” that consumers will now be forced to finance.
Anglin said the transmission costs will drive large industrial companies off the grid — either to generate their own power or move out of province — leaving an even larger portion of the cost to be paid by residential customers and small businesses.
“As these big industrial players bow out, consumers won’t see the costs double; they will see them triple and quadruple,” he said.
But Deising said there is a transmission cost monitoring committee reviewing the bills and cost oversight management provided by the Alberta Utilities Commission.
“Cost is top of mind for all of us,” he said. “We’re here to serve the public interest.”
Evan Bahry, executive director of the Independent Power Producers Society of Alberta, said AESO is responding to growth in the province and the fact there’s only been limited infrastructure built the past few decades.
“I don’t think it’s out of line at all with the amount of money we’re putting into schools and hospitals and highways and transit,” he said. “We’re still seeing profound economic growth happening in the province and those wires are a function of that industrial development.”