Deregulation – it’s time to fix it or forget it

Energy consumers are reeling after taking a nasty one-two punch on the price they’re paying for electricity and natural gas.

For the second year in a row, Alberta cities have the most expensive electricity prices in Canada, according to an annual Manitoba Hydro survey of utilities. It looked at the monthly cost of 750 kilowatt hours and 2,000 kWh of power in 17 communities across the country as of May 1.

For 750 kWh of power, Grande Prairie consumers paid the highest bill in Canada – $110.33 a month. Edmonton was third highest at $90.52, while Calgary was fifth at $75.92.

Two thousand kWh a month also cost Grande Prairie the most, with Edmonton being second and Calgary seventh.

Alberta’s deregulation of the electricity industry was supposed to increase competition and give consumers the lowest power prices in North America.

But in another sign of fading competition, EPCOR Utilities Inc. has announced it’s not making enough profit to continue offering natural gas and electricity fixed-term contracts to homeowners and small commercial customers.

So until British-owned Direct Energy enters Alberta’s residential utility market – maybe in October – ENMAX Energy Corp. has the field to itself.

The provincial government either needs to quickly fix deregulation or toss it out of the ring.

Albertans will also have to pay more for their natural gas in September – just in time for cooler weather.

The Alberta Energy and Utilities Board has approved monthly net increases in the cost of gas delivered by ATCO Gas and AltaGas Utilities Inc.

Southern Alberta customers of ATCO Gas South will see their bill jump to $6 a gigajoule (GJ, a standard heating unit), up from $4/GJ in August. The increase for ATCO Gas North customers is to $6.3 from $5/GJ, and AltaGas customers will see a jump to $6.4 from $4.87/GJ.

The utilities, which make no profit on the gas itself, say the hike will help them recover the cost of buying gas for customers in August, when market prices were higher than expected.

Meanwhile, Finance Minister Pat Nelson says the province expects to reap an additional $1.7 billion in revenue this year, thanks to soaring oil and gas prices. So the government will consider providing consumers with rebates on their gas bills – like it did prior to the 2001 provincial election.

Let’s see if I’ve got this straight.

Starting Labour Day, Albertans will have to pay more for a publicly owned natural resource produced in our own backyard.

Then the government will use taxpayers’ money to cover some of the costs of Albertans having to pay more for their resource, which leaves less money for things like health care and education.

With oil and gas companies reporting record second-quarter earnings, it’s a great time to be a shareholder in the energy sector. But it’s a lousy time to be a senior or a family on a fixed income trying to keep the house warm and the kids’ clothes washed.

If the ‘Alberta Advantage’ in energy has you tripping a circuit or two, you might want to check out an alternative. Sustainable Calgary is presenting the Eco-Solar Expo on Sept. 6 in the Heart Building at the SAIT campus in northwest Calgary.

The free, all-day event will feature displays of solar, wind and geothermal energy technologies, tips from energy-savvy homeowners, and talks by experts who have installed renewable energy systems. For more information, check out www.sustainablecalgary.ca

Getting tired of reruns of Law and Order on TV? You could always tune in to Law and Disorder in the oilpatch.

In the latest courtroom drama, a consortium of natural gas companies is asking the Court of Queen’s Bench to quash the Alberta Energy and Utilities Board’s (EUB) decision to shut down gas production in the Athabasca oilsands region by Sept. 1.

The EUB says the gas production will hamper the future extraction of much more valuable bitumen reserves.

The companies – including Paramount Energy Trust, whose production will be most curtailed by the EUB’s decision – are also asking the Court of Appeal of Alberta to grant them the right to appeal the regulator’s order.

In another nail-biting episode, Husky Energy Inc. and prominent Alberta oilman Clayton Woitas are suing each other for multi-millions over the information Woitas used to build his private oil and gas startup, Profico Energy Management Ltd.

And in an upcoming Law and Disorder, a cast of thousands is lining up to take a shot at EnCana Corp. and now-defunct WD Energy Services Inc., a Houston-based merchant energy subsidiary of the former PanCanadian Energy Corp., which merged with EnCana in spring 2002.

EnCana, WD Energy Services and other companies have been named in several class-action lawsuits filed in the U.S., over allegations the firms manipulated gas trading. EnCana says it will defend itself vigorously.

Someone call Law and Order’s Assistant DA Jack McCoy to solve this mess.

Husky Energy Inc. last month snapped up the Western Canadian assets of U.S.-based Marathon Oil Corp., in a $588-million US deal that took energy analysts by surprise.

Husky CEO John Lau deserves full credit for the shrewd move.

Spinning off part of the purchase at a premium price to U.S. independent EOG Resources Inc. will give Husky almost three-quarters of Marathon’s 27,000 barrels of oil equivalent a day of Canadian production for less than half the total purchase price.

But the deal also signals the waning interest by American energy giants such as Marathon in the aging Western Canadian Sedimentary Basin, where large oil and gas pools are becoming harder to find and produce.

Marathon will turn its back on the basin and use the proceeds to invest in “high-potential” opportunities, such as its recently acquired Khanty Mansiysk Oil Corp. in Western Siberia.

Oil and gas companies are helping take some of the sting out of the devastating forest fires in British Columbia.

Chevron Canada is pledging $30,000 to the Canadian Red Cross B.C. Forest Fire Response Fund to help people affected by the unprecedented forest fires in the province.

Shell Canada Ltd. is donating $15,000 in Formula Shell gift certificates to the Red Cross campaign to help evacuees buy needed items such as fuel, water and batteries. Shell previously donated $5,000 in certificates to the Kamloops Emergency Social Services.