Alberta Premier Rachel Notley comments on the election of Donald Trump in Edmonton Alta, on Wednesday November 9, 2016. THE CANADIAN PRESS/Jason Franson

Alberta moves to cap power prices for consumers ahead of system revamp

Alberta Premier Rachel Notley says the province is capping electricity prices as part of a broader plan tomove towards a more regulated industry.

EDMONTON — Alberta Premier Rachel Notley says the province is capping electricity prices as part of a broader plan to move towards a more regulated industry.

“Today we begin … bringing Alberta back into the mainstream of how jurisdictions across North America run their electricity systems,” Notley said Tuesday at a news conference in a south Edmonton home.

Notley said Alberta’s electricity market is broken.

“It will not bring in the kind of investment that will be needed to power Alberta’s future, so we’re taking steps to get ahead of all of this.”

The cap will come into effect by June and will ensure Albertans pay no more than 6.8 cents per kilowatt hour.

That’s about twice what most Albertans pay now, but there have been multiple price spikes above that level in the last decade.

The ceiling is to be in effect until 2021. The government says it will work with stakeholders in the coming months to determine the best way to roll out the cap.

“The policy mechanism to deliver the price ceiling is up for consultations, but the idea of a price ceiling isn’t,” said Notley.

The premier said the government has ways of dealing with price spikes above the 6.8-cent ceiling. She said the province will ensure power distributors don’t have to bear any losses because of the cap, perhaps through payments from a carbon tax which takes effect Jan. 1.

Notley’s NDP government, under its climate-change plan, hopes to phase out coal-fired electricity by 2030 and replace it with a mix of renewable energy such as wind, solar, and hydro.

The federal government on Monday announced the same target nationwide.

Notley said there will be further announcements this week on the direction of the overall power plan. On Thursday, the province is to release a report from retired U.S. power executive Terry Boston on ways to manage electricity during the coal phase-out.

Notley said action is critical because Alberta’s current deregulated market is an increasingly uncompetitive outlier.

“Most investors are wary of the volatility in Alberta’s unique system.”

While Notley said moving to clean energy is the prudent way to go, she said her hand was forced by the previous Progressive Conservative government’s failure to plan for the future, especially given some coal-fired electricity plants were already due to shut down in the coming years.

Opposition critics said the cap means the government knows price spikes are coming as Alberta diversifies the industry and the plan to cover losses from power providers means taxpayers lose one way or another.

“This is their attempt to cover themselves and prevent a situation like what’s happening in Ontario where rates have sky-rocketed,” said PC critic Rick Fraser.

In Ontario, electricity rates for homes and small businesses jumped an estimated 70 per cent between 2006 and 2014 as coal was being phased out.

Opposition Wildrose critic Don MacIntyre said the 6.8-cent ceiling means that “the NDP government has essentially admitted that their policy changes mean Albertans should expect nearly a doubling of current electricity costs.”

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