Fathers for Life

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at the website of the Bruderheim REA since March 27, 2002


Still confused by your power bill?


Nobody will blame you if that is the case.

Ralph Klein promised that the deregulation of the energy industry would provide for a more competitive environment and do all of us good, but what has happened is that deregulation cost Albertans a lot, an estimated $20 billion and counting over the four years it has been in place.  Roughly half of those extra costs went to the energy corporations.  The rest went to the provincial treasury.
   Not all of that money is gravy, of course.  A lot of it was used to pay for the cost of an enormously expanded bureaucracy, both in government and in the private sector.  After all, the deregulation of the energy industry is a complicated business, and somebody has to pay for it, with nothing more returned in value than that energy costs increased and a nebulous promise that eventually we will all be better off on account of that.
   The problems created by Ralph Klein's deregulation fiasco are far from over.  At the annual general meeting of the Alberta Federation of the Rural Electrification Associations (AFREAs) in February 2004, the Alberta Government identified that no end to the higher energy costs caused by deregulation is in sight, and that it is hoped that if everyone just hangs in there and does the right thing, eventually the hoped-for benefits of deregulation will materialize.  The government representative did not tell that when or if the promised benefits will eventually arrive is about as certain as that we can convert Alberta agriculture to produce enough plums to satisfy the demands of the world market.
   Although a few people laughed a bit scornfully and shook their heads in disbelief when that was stated, the full import of that may hit home only when the realization sets in that the statement is a self-fulfilling prophesy.  What it means, in essence, is that if the promised consumer benefits never arise, then it must surely be the fault of someone or anyone that didn't to the right thing.  You see, the ideological goal is perfect.  It's just that people don't measure up to Ralph Klein's ideological standards. 
   The energy corporations themselves hardly measure up to the task at hand.  Four years after the fact they still haven't come to terms with what is required to bill consumers accurately for electric energy delivered and consumed.  Last year it emerged that about 22,000 services (about 8,000 of them REA members) in the Aquila service area had not been billed for any of the electric energy they consumed since January 2001.  Retroactive billing can be done only for one year back.  What will happen to the cost of the energy that nobody got or can be billed for?  Well, you and I already covered that little bit, through the cost of unidentified energy that is being incorporated in the price for energy that people do get billed for, and most likely some of that energy will be paid for twice over, to boot.
   But that was not all.  Aquila services that are being billed through EPCOR also had not been billed for more than six months for the recovery of the debts that those services had racked up when Ralph Klein had forced them to rack up that debt by putting an 11/kWh "price ceiling" on electric energy consumed during 2001, when the real price of electric energy delivered to end consumers had more than tripled over night to 18/kWh and many Albertans with fixed incomes in the low-income range found themselves unable to pay their electric energy bills. 
   The "price ceiling" was no such thing.  It was a hidden, cumulative debt that consumers were forced to rack up for energy consumed during 2001; that consumers are still paying back right now and will continue to pay for until December of 2004.
   However, as the two graphs shown in this article identify, the billing problems that arose from deregulation are far from over.
   It boggles the mind to imagine what could possibly have happened to data on energy consumption for individual services on the way to producing bills for energy consumed by those services.  How could it possibly have happened that energy consumption data from a common source, consumption read at the meters, resulted in consumers being billed for two different amounts of energy, one for one amount of energy consumed, and one for another amount of energy delivered.  In case the people that produced the bills containing the conflicting numbers for energy delivered and consumed in each month billed during 2004 don't know, they should have known.  Energy consumed cannot differ from energy delivered.  Energy consumed can neither fall short of nor exceed energy delivered.  If the two numbers don't match exactly, something is seriously amiss.
   Of course, the confusing puzzle is carried over to what consumers are expected to pay, which is: confusing and varying monthly amounts of money that it is impossible to reconcile with the information provided on the bills identifying amounts of money that fluctuate wildly from month to month.
   EPCOR, which does the billing for some of the REAs in the Aquila service area, finally provided an explanation of the puzzle with their bill for April 2004 that points the finger of blame squarely at Aquila:

We have resolved some difficulties we had in processing the delivery charges we receive from your Wire Services Provider.  Unfortunately these difficulties resulted in a delay in applying these charges to your EPCOR statement. (EPCOR's letter to Dear Sir/Madam, dated April 2004, an enclosure in EPCOR's electric energy bill for Apr. 2004)

Nevertheless, one could imagine that, as happened on the February 2004 bills that EPCOR produced, if credits for March are applied to the February bill that result in reducing the amount of energy delivered in February to next to nothing, that alarm bells should have gone off and clanged loudly in the EPCOR Billing Department.  Although EPCOR and Aquila both take in vastly greater amounts of money from consumers of their services than they did before deregulation came into effect, apparently not enough of that money is being devoted to quality control.  It's either that, or even in the electric utility corporations there is by now no-one left that still understands what needs to be done to produce accurate and confidence-inspiring electric energy bills.
   One thing is certain and an absolute reality.  The average monthly amount billed for January through April 2004 (prior to "deregulation") for the service reflected in the two graphs shown in this article was a total of $68.22 for the same amount of electric energy delivered and consumed.  The current average monthly total for the same service is $126.44.  That is an increase of 85 percent in the cost of electric services due to the alleged and non-existent benefits of deregulation.  That is money that came directly out of my pocket and out of those of any other consumers of electric energy.  In addition there are the subsidies that Ralph Klein so generously provided to ease the shock of deregulation, money that came out of taxpayer-provided revenues.

Thank you very much Mr. Klein.  We'll keep in mind what all we could have done with $20 billion that went down the drain, and what all had to be cut back to come up with that kind of money, a total of about $5,700 for every man, woman and child in Alberta.  It appears that with that sort of people around to effect transfer payments to the utility corporations, we hardly need them to make net transfer payments to the federal government — to the tune of about $9 billion/year — for which we receive nothing in return either.

The MS Excel Spreadsheet (28kB) from which the two graphs shown in this article were constructed.

Posted 2004 05 05