Making Sense of Energy

Utility Deregulation No Culprit in Alberta’s Rates

Article ran in Real Estate Management Industry (REMI) News

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Recent findings from an industry analyst report argues the case that utility deregulation has had little negative effect on Alberta’s commercial and residential consumers.

On the contrary, energy consulting firm, Solution 105, found that deregulation has lowered electricity costs. When the company compared residential electricity bills from 1994 to current rates, it found that rates have climbed or slowed at the rate of inflation.

Small to medium businesses in the province have benefited from deregulation with savings of 21 to 26 per cent.

On the flipside, regulated rates are believed responsible for cost pressures in the transmission and distribution of electricity. For example, delivery costs accounted for less than two cents per kilowatt-hour for the average Edmonton office tower in Edmonton in 2002; however, by 2013, such costs had tripled.

Chris Vilcsak, president and chief executive officer of Solution 105, contends rates from distribution and transmission companies are out of control. Vilcsak recommends mandating performance-based rates (PBR) and plans to offer future advice on what that would entail.