The fine line between climate change initiatives and energy poverty

Small business is the heart of our province. The entrepreneurial spirit of Alberta is part of what has made this province great. Now more than ever, at a time when Albertans have been hard hit, it is important for our government to help these businesses thrive.

Unfortunately, as we are about to embark on a bold initiative to redesign the power grid, we fear that the government may forget that they are entrusted to represent the interest of all residents of the province (both business and consumers), and may be working towards leaving independent small business retailers behind.

Revitalizing Alberta's Economy

On the weekend, we attended a thought provoking Vision & Leadership convention hosted by Alberta Council of Technologies which represents Alberta's technology leaders and entrepreneurs. Kim Campbell and Dona Kennedy-Glans were two of the many speakers who challenged the attendees to focus their minds and conversations on the importance of engaging new technologies and management processes to help diversify Alberta's economy

Here are 3 of the Big Ideas presented that day from 20 industry sectors:

  • The Alberta-Alaska pipeline offers a whopping $650 billion potential for the province, advised the Van Horne Institute. You can also think about a growing drone industry that makes commercial deliveries to remote locations; plants seeds for large-scale farms; monitors border security instead of building walls. Hear that Donald Trump?
  • FPInnovations on wood products. These innovators want the province to plant more healthy trees for bioenergy fuels and to replace concrete for construction. Look at this 6-story modern architecture.

  • How about planting agricultural gardens on the top floor of commercial buildings in Alberta, asked Paul Price. We also can explore growing plant-based protein.
We all need to work together, regardless of political affiliations, if we are going to ride out this economic storm.

The biggest thing we took from this conference? Economic and intellectual leadership is required to diversify our economy. Our MLAs should have made the effort to attend, but even though the meeting was on a Saturday, they were too busy.

Call it what it is: we are living under a cloud of negativism and polarized ideologies. You must be blind not to see it. This needs to change and we all need to work together, regardless of political affiliations, if we are going to ride out this economic storm.

Look at the numbers: the resilience of our economy today is measured at 1.97 out of an index of 5. The empirical data tells the truth. Virtually every industry sector declined in resilience (2016 over 2015). This index can only be improved if the province can create a diversified market. This in turn requires investment in innovation and technology, small business growth, value-added manufacturing, and exports.

Today, Albertans are struggling. Some are still feeling the economic pain from the past flood in Southern Alberta. The fire that devastated and ravished the north this year cost billions and was the largest natural disaster in Canadian history. Additionally, the decline of the Oil and Gas sector, which will spill over into 2017 and beyond, has crippled the province. We are facing a provincial budget deficit of over $10 Billion this year. With our carbon-based resource economy in stress we are seeing record high unemployment numbers, and more and more people are living pay-check to pay-check.

How much more can we take?

Is there enough money to fund restructuring energy initiatives?

In the news, almost daily last week, the government announced several re-structuring energy initiatives. They announced a + $25 Billion massive investment in carbon free generation technologies, closing down coal plants will cost another couple of billion. Changes in the electricity industry with the introduction of Capacity Payments will add a new line item to the consumer's monthly invoice. Plus, we are a month away from implementation of new taxes under the banner of a Carbon Levy to fight Climate Change.

We think the Carbon Levy is too high. Our fear is that it will have a negative impact on our local economy. But we wonder if it is actually high enough to pay for everything that the government wants to fund out of this new revenue source.

History will prove if the NDP is to be measured in a positive light by their signature achievement in fighting climate change and restructuring the energy industry.

We accept the fact that clean energy and energy efficiency are critically important goals that will positively impact our health and lives. We support this viewpoint, not only from a philosophical perspective, but we invested our own money in this belief.

We made a decision to invest in the vision of 'greening the grid' and founded Green Alberta Energy in an effort to help consumers offset their energy use. Many of our Energy Marketers voluntarily discount their electricity prices to make the process of helping to 'green the grid' affordable.

History will prove if the NDP is to be measured in a positive light by their signature achievement in fighting climate change and restructuring the energy industry. It truly is a bold initiative. It is a forward-thinking strategy: but can we afford it? Are they attempting to do too much too quickly in one term of governance?

  • Closing coal plants
  • Cancellation of PPAs
  • Implementing Capacity Payments design
  • Building a new hydro infrastructure
  • Subsidizing Solar and Wind

With these goals, there will undoubtedly be a need to expand Transmission services, and to soften the impact of the new tax, the government will be rebating the carbon tax to low income consumers. Add it all up, what is the total cost? It is a major commitment that all voters should be given the chance of participating in the decision.

We need to avoid moving too far too fast

At the same time, it is important to recognize that the generation wholesale market is very stable and retail prices for electricity are at record lows. With this said, Dear Premier, don't try to tell us that you are making these changes because the market needs to be restructured to protect us from volatility and high prices.

There is a fine line between the positive benefits of climate change initiatives and energy poverty.

Consumers paid 6 cents per kWh in 2014, 4 cents in 2015 and 3 cents this year for electricity. There are currently 5,000 MWs of surplus capacity today. Given the current tough economic times, we caution the government to be careful in pushing too hard and too fast, or you might end up being the cause of a tragic mistake.

As Senator Doug Black most recently cautioned, the momentum behind carbon pricing initiatives in Canada needs to be slowed – not stopped - but slowed. He urges governments to exercise caution to prevent from getting too far ahead of other competitive energy nations - such as the U.S. - in imposing taxes on carbon.

The fight to keep jobs in Alberta

Governments should be cautious of companies moving jobs and investment in technologies out of the province. It has and will continue to happen. Here are a few examples in our energy industry:

  1. EPCOR sold its commercial book of customers to Just Energy and all customer care services today for these clients are managed in Ontario and the States.
  2. ENMAX outsourced their Information Technology services to the Tata Group from India in an effort to remain competitive with other utilities.
  3. Direct Energy's call center is in Guatemala and billing services are managed by HCL, which is also domiciled in India.
  4. ATCO, once the entrepreneurial statue of pride in Alberta, sold ATCO iTek to Wipro from India and signed a $1.2 Billion 10-year outsourcing customer care, systems and billing service agreement. The jobs are gone.

It bears repeating: While we support the carbon tax, we ask you to respectfully move forward with caution.

Our government should represent ALL Albertans not just big business

We are asking the government to remember that they represent ALL Albertans.

Will the government's activism on Climate Change cause the energy prices to increase? They themselves believe it will. Otherwise, why would they have put a 6.8 cent per kWh cap on the regulated rate option prices (RRO). The RRO is provided by the big utilities such as Direct Energy that shipped jobs out of province. So why is the government trying to protect the market dominance of RRO providers by ensuring ENMAX, Direct, EPCOR, and the alike are protected (by subsidizing their RRO customers). What about the rest of the consumers in Alberta? Hopefully our politicians will respect the rights of ALL Albertans.

The government's newest policy is designed to tilt the playing field in favour of the big utilities.

45% of the rest of us in Alberta opted to move away from the RRO. Why? For a variety of reasons which include Local Customer Care services, and more competitive prices. Today, a consumer buying electricity from a competitive independent retailer is paying 3 center per kWh. A consumer buying electricity on the RRO is paying over 30% more. The government's newest policy is designed to tilt the playing field in favour of the big utilities.

We fear that the NDP will do whatever is necessary to close the competitive electricity market. The fear is real, as they have threatened to re-regulate the system. We have proven the benefits of a de-regulated market, as we have outperformed many of the big utilities in terms of both customer care and lower consumer prices. Why destroy something that is working?

We remind our government that they are the stewards of the money that is collected from the population at large and ask that they do not use subsidies to artificially promote the regulated retailers at the expense of small independent businesses.

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Nick Clark | Nov 30, 2016