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Ottawa Citizen

Electrical deregulation continues to haunt Tories in Alta election campaign


EDMONTON (CP) - Ralph Klein's drive for a third straight term as Alberta's premier skidded over a rough patch Saturday when Alberta businesses expressed fears over his government's electrical deregulation program. A survey undertaken by the Alberta Chambers of Commerce has revealed that nearly 100 businesses plan to curtail expansion or research because of soaring electricity rates.

Many fear they will have to lay off employees because of high power bills and most blamed the Klein government for the situation.

Klein initially refused to believe that survey was conducted by the Chambers, which represents more than 20,000 Alberta businesses.

He said he is a victim of a propaganda war being waged by opposition Liberals and New Democrats.

"We're doing all we can to shield as best as we possibly can the small and medium-sized businesses," he said.

He added that some business operators don't understand the deregulation process.

"I can understand the concerns," he said. "It's very difficult to explain the whole situation in a 15-second sound bite."

Klein did concede, however, that uncertainty over deregulation caused power companies to hold off on plans to build new plants that are now desperately need to meet burgeoning demand.

"I am going to admit that part of the problem . . . was the uncertainty that was brought about by the change," he said.

New Democrat Brian Mason said the business community is drawing a bleak picture of the future under deregulation.

"People are actually going to lose jobs," he said. "(Businesses) are going to be cancelling new expansions. They are going to be cancelling all kinds of research and development in Alberta and some plants are even going to shut down and move to other provinces."

He said businesses that have traditionally supported the Progressive Conservatives are saying they don't believe he is telling the truth about electrical deregulation.

"Here it is from the horse's mouth," he said. "Alberta businesses surveyed by the Alberta Chambers of Commerce are saying that deregulation is killing jobs in Alberta; that it is hurting the economy of the province, contrary to Premier Klein's assertions."

Liberal leader Nancy MacBeth said the survey results are further evidence the electrical deregulation program is a disaster.

"This is just further proof of how disruptive electricity deregulation has been on the Alberta economy and on Alberta families."

She said the Liberals have a plan to lower electricity prices for consumers and to "clean up the mess that's been created by the Klein administration."

More than 150 businesses participated in the survey by faxing the chamber answers to six questions on electricity deregulation.

When asked if they agreed with the Alberta government's assertion that current high electricity costs are more a function of high energy costs in the marketplace than deregulation itself, 117 responded no.

About a third of respondents said power accounts for 10 to 50 per cent of their costs. Another third said they plan to raise product prices as a result. About half said they didn't expect the situation to change after the election on March 12.

Twenty-one companies said they will have to lay off employees and 92 companies said they will divert money for expansion and research to pay their electrical bills.

About 40 per cent of the respondents called for Klein to move back to a regulated electrical industry.

The survey questions were mailed out in January. Businesses had until Feb. 7 to respond.

Alberta industries have seen their costs rise as high as 29 cents per kilowatt hour this year compared to four cents per kilowatt hour in Manitoba.

The Liberals plan to set lower rates for consumers and small power consumers in a regulated market but to continue a deregulated market for large-scale users.

The Klein government promised last week a consumer rebate program that would kick in automatically "like a thermostat" when natural gas prices hit a certain level.

But just as Klein was hitting the doorsteps of Albertans with his rebate plan, Lamb-Weston Inc. postponed a major upgrade of its french-fry plant in Taber, Alta. due to unpredictable energy costs.

The planned expansion would have added 55 jobs to the workforce of 175 at the plant.

-- Rachel Gibson (, February 18, 2001

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