Chamber: The cost of electricity reform continues to add up
It’s of surprise to few that after following our provincial government’s announcement they would force the early retirement of coal-powered electricity generators that electricity prices would take a significant jump. However, the speed and rate in which they have increased are coming as a surprise to many.
According to the July TransCanada power update, Alberta electricity prices are up an average of 300% from the year prior to $63.44/MWH (mega watt hour) from just $16.78/MWH in June 2017. This massive jump in electricity prices will take its toll on the pocket books of consumers and businesses paying to operate electrical equipment, for their lights, refrigerators, and if they’re lucky, air conditioning.
For many businesses electricity represents one of their largest input costs, especially those in the accommodation, retail, and manufacturing sectors. For example, a company utilizing a few dozen arc welders would easily see power bills in the tens of thousands. As would large commercial or industrial spaces requiring heating and cooling would see similarly large power bills.
In comparison to most of the world and excluding the odd spike, inexpensive electricity has been a staple of the “Alberta Advantage” thanks to a competitive generation market and an abundance of (relatively) clean coal power and cogeneration facilities. The infamous Climate Leadership Plan (CLP) will see the phase out and early retirement of the Alberta coal plants representing nearly 40% of Alberta’s total capacity to generate electricity. In turn, the CLP sets a goal of having 30% of our electricity come from renewables. Unfortunately, and as all know, the sun doesn’t always shine and the wind doesn’t always blow meaning the 6,000 MW in renewables require backup generation capacity be built.