Friday 26 January 2001 Calgarians pine for Epcor's gas prices

Don Braid, Calgary Herald

The hottest phone number in Calgary these days belongs to Epcor, Edmonton's power company, as thousands of Calgary homeowners beg the Edmontonians to supply them with natural gas.

They have a good reason -- after ATCO Gas's latest rate increase, Epcor now sells gas to Calgary homeowners for $1.32 per gigajoule less than ATCO.

Calgarians and other southern Albertans can lock in a one-year contract with Epcor at $8.49.

The rate from ATCO Gas is now $9.814 per gigajoule and it's likely to be in effect for a year, pending further hearings in February.

Epcor's prices are even lower for those who sign for longer terms -- $7.49 for a three-year contract, and $7.25 for five years.

"We are getting lots and lots of calls from Calgary," says Lynn Hutchins-Mah, Epcor's communications manager in Edmonton.

"Calgary is one of the top areas we've been getting interest from since we began the contracts last September.

"There are many, many people who want the certainty of a fixed contract, knowing exactly how much they will pay while rates are rising."

An Epcor service agent said she'd had more than 70 calls waiting in her phone queue at any moment between 9 a.m. and noon Thursday. "And there are quite a few of us here to deal with calls," she added.

Epcor's fax line for receiving applications was also busy for most of the day.

The Epcor offer expires Jan. 31 or when there's no gas left to sell at the offered price.

ATCO Gas doesn't provide such residential contracts. This means customers are subject to interim rate changes like those approved Wednesday by the Alberta Energy and Utilities Board.

Hutchins-Mah won't reveal how many Calgary customers have switched to Epcor, but they clearly number in the thousands.

A one-year contract looked very good to Calgary lawyer Clint Docken, who signed with Epcor last week.

"I thought it made economic sense to lock in for the next year at a fixed rate," he says. "I'm saving myself a bunch of money. I was kicking myself for not signing up sooner."

Customers who switch to Epcor continue to pay ATCO's fixed and variable delivery charges, as well as the City of Calgary's franchise fee, because ATCO lines still carry the gas.

Changing suppliers affects only the "cost of gas" portion of bills. But a family that uses 25 gigajoules per month in winter would save $33 on each bill.

Those who signed contracts with Epcor last December did even better by locking in at $5.69 per gigajoule, more than $4 below ATCO's current price.

A good number of Calgarians took advantage of that early offer, especially oil and gas experts who knew that rising profits for their companies spelled trouble for homeowners.

Now, even Calgary customers who sign with Epcor will pay more than they have been, because ATCO's previous rate was $6.496 per gigajoule.

The entire situation is fraught with ironies -- including the fact that ATCO Gas, the Calgary-born company, charges Edmonton customers much less than Calgarians pay.

ATCO's new Edmonton rate is $8.772 -- $1.04 per gigajoule less than the $9.814 charged in southern Alberta.

ATCO charges less in the north because north and south are separated for regulatory purposes, and the company owns some northern producing wells.

Epcor contracts, meanwhile, offer the same prices all over the province.

Epcor, owned by the City of Edmonton but run by a board of business people, has been aggressively competing in the deregulated natural gas market.

The company mainly generates and supplies electricity but hasn't been a natural gas player until recently. It's strictly a marketer, with no gas wells or transmission lines of its own.

Epcor has successfully "hedged" -- bought volumes of gas at a fixed price in a rising market -- while ATCO Gas has been widely criticized for failing to protect against natural gas price increases.

ATCO was granted the rate hikes to pay for a $110-million deficit caused by the difference in the cost of gas and the price it could charge consumers.

Calgary Ald. Dale Hodges, who's often critical of ATCO Gas, says "the company has always made it clear that its main concern is its own corporate well-being. It doesn't want to take the risks of hedging."

ATCO Gas spokeswoman Carol Benoit said the company is refusing all comment until the EUB hearings are over next month.

Call 235-7236 or e-mail dbraid@nucleus.com

http://www.calgaryherald.com/opinion/stories/010126/5067556.html

-- Martin Thompson (mthom1927@aol.com), January 27, 2001