Alberta: Cold snap puts heat on power use

greenspun.com : LUSENET : Unk's Wild Wild West : One Thread

http://www.calgaryherald.com/business/stories/001216/5029049.html

Saturday 16 December 2000

Cold snap puts heat on power use

Province to launch conservation campaign as electricity consumption and prices peak

Grant Robertson, Calgary Herald

Alberta's appetite for electricity continued to reach unprecedented levels

Friday as a provincewide cold snap had generators working overtime and consumers paying the price.

The power drain sent electricity spot market prices skyrocketing to more than $650 a kilowatt-hour -- six times the average level for the year, and 15 times the average cost of power in 1999.

A record was set for electricity consumption earlier this week, when power demand hit 7,800 megawatts at dinnertime Tuesday.

Grappling with the skyrocketing electricity prices and staring down a provincewide supply crisis, the

Alberta government is preparing to launch a massive conservation campaign urging homeowners, businesses and institutional consumers to reduce power use.

"We're going to be getting the word out. You're going to be seeing a lot more of that message pretty soon," said Alberta Resource Development spokeswoman Donna Babchishin.

With two weeks until the province deregulates the electricity market Jan. 1, the conservation campaign has large businesses and institutional power users fuming.

Homeowners have been shielded from high power prices by a one-year rate cap imposed by the government. But industrial consumers will be left to buy power at deregulated prices -- a move that will see their power bills at least double.

Major electricity consumers say they have been cutting back on power usage for years and conservation is not the answer to the province's woes. With massive energy efficiency programs already in place, there is simply no room to cut further.

"We are about as efficient as we can be," said Andrew Moor, president of Smed International Inc., one of Calgary's largest employers and a major power consumer.

The international furniture manufacturer uses 3.5 megawatts of power during peak consumption times and is facing a tripling of its power bills once deregulation takes effect.

Though Smed hasn't been as vocal in its opposition to the soaring rates as many large businesses, the conservation message is a strange one for the company, renowned for its energy efficiency.

Motion sensors inside the Smed building turn off lights when areas, such as bathrooms, are not in use.

The company begins manufacturing at 6 a.m. and finishes before 6 p.m. to avoid most of the peak electricity consumption times.

"It's not like we were wasting power before," Moor said.

The conservation idea is also nothing new to large institutional power consumers, such as Calgary schools.

A spokesman for the Calgary Board of Education said it is examining power consumption, but there are not many reductions that haven't already been addressed. Unnecessary lights, for example, are already turned off at night.

"We're having one-on-one discussions with our caretakers to ensure that things like computers are turned off at night," said Pommer.

"We are already conscious of the need to conserve power."

The CBE and the Calgary Catholic School District both face huge electricity costs next year.

While the CBE is in the process of negotiating contract for the 2001-2002 school year and hasn't forecasted the impact of higher electricity prices, the Catholic district figures it will face as much as $3 million in additional costs.

The operators of Calgary's downtown core are considering dimming -- or extinguishing -- the city skyline at night. But with electricity at its cheapest between supper time and breakfast, there are only limited gains to be made.

Across the city, there is the same situation with industrial consumers. The Calgary Airport Authority is facing a tripling of its bills. Like Smed and Calgary-based fertilizer giant Agrium Inc., the airport bought electricity in the province's recent auction of power supply in an attempt to stabilize costs.

In a similar move, the University of Calgary and the Calgary Regional Health Authority have banded together to purchase bulk power. The university's power budget will jump from $6 million in 1999 to $12.7 in 2001.

"There is no way to make up for it. It just becomes another budgetary pressure," said Steve Dantzer, director of facilities management for the U of C.

Like many large-scale power consumers, Agrium president John Van Brunt said his company is considering building its own power generation, believed by some to be the only alternative to high prices.

"But that is going to take some time."

Industry and institutional power users are calling on the government to offer up some sort of relief for 2001.

Resource Development Minister Mike Cardinal is expected to make an announcement Tuesday.



-- (in@energy.news), December 18, 2000

Answers

http://www.canoe.ca/CNEWSPolitics0012/19_alta-cp.html

Tuesday, December 19, 2000

Alta. announces natural gas subsidy

Given as attempt to shield consumers from rising prices

By JOHN COTTER-- The Canadian Press

EDMONTON (CP) -- While unprecedented prices for natural gas are pumping millions of dollars into the Alberta treasury, they're also causing unprecedented increases in heating bills.

In another pre-election subsidy announcement, Premier Ralph Klein outlined help for consumers Tuesday with a $275-million rebate program.

"The natural gas price is set by supply and demand in the North American market," Klein said.

"Thanks to the province's solid fiscal position and the high revenues from natural gas, the government is able to return some of these revenues directly to Albertans, who are the owners of the province's resources."

The program will involve a $50 per month per household rebate for the first four months of 2001. Landlords can apply for the rebate but will be encouraged to pass the savings on to renters.

The rebates will also flow to hospitals, schools boards and post- secondary institutions. Businesses and industry will not be covered.

Klein's announcement followed word that some consumers in Ontario may pay almost half as much for natural gas this winter as Albertans even though much of the gas comes from Alberta.

Union Gas of Chatham, Ont., said Tuesday its customers will pay $5.42 per gigajoule starting in January.

That compares with rates of between $9.97 gigajoule and $11.58 being sought by Atco in Alberta under a rate rider proposal for the period between Jan. 15 and March 31. That rate has yet to be approved by the Alberta Energy and Utilities Board.

The price difference stems from how companies buy natural gas. Atco buys on the spot market while Union Gas buys long term contracts to help protect consumers.

Klein was asked if his government would have to pay out such subsidies if Alberta gas companies sought cheaper gas in long term contracts similar to Ontario firms.

"We don't know that for sure . . . If you want to take a silk purse and make a sow's ear out of it that is entirely up to you."

The new rebate is a good first step but won't be enough to cover the full hit residential consumers will face this winter when they get their natural gas bills, said Jeff Jodoin, energy analyst for the Consumers Coalition of Alberta.

"It is good news but it is not enough," he said. "A residential customer can expect to see their bill be well over $200 this January and February per month, probably closer to $250."

Two Alberta gas utilities, including Atco, praised the government's subsidy announcement.

However, Mike Heck, president of the Federation of Alberta Gas Co-Ops Ltd., a company that supplies 100,000 customers in rural areas, said it won't apply to hard pressed small businesses and farmers.

"Agriculture, greenhouse house operators, Hutterite colonies, turkey and poultry producers need the relief," he said. "They aren't going to see any under this. They are hurting now."

The province can't subsidize businesses because the province could be challenged under the North American Free Trade Agreement, Treasurer Steve West said.

The Opposition dismissed the rebate as temporary election time relief that is based on crisis management instead of sound planning.

"The government is making this up in the dark, with the pilot light having gone out in the furnace," said Liberal energy critic Lance White.

Last September the Klein government announced an energy tax rebate of $300 for every Albertan over the age of 16 who filed a tax return last year in a program that cost $690 million.

The first $150 cheque was mailed out in November, with the second $150 cheque to be mailed in April.

Klein has suggested he expects to call an election in February or March.

It's estimated that over a one-year period, for every 10-cent increase in the price of a thousand cubic feet of gas, the government collects an extra $154 million.

Klein acknowledged energy issues such as natural gas prices and electricity deregulation could become election issues.

"Do you think I like gas prices and high electricity prices? I don't like them anymore than you. I don't like them from a political point of view and I don't like it from a personal point of view."

The province will make another subsidy announcement to cover skyrocketing electricity prices on Wednesday, Klein said.

-- (in@energy.news), December 20, 2000.


http://www.southam.com/ottawacitizen/newsnow/cpfs/national/001220/n122 023.html

Wednesday December 20, 2000

Alberta's boom has dark side for residents, workers, cities and businesses

DARCY HENTON

EDMONTON (CP) - When people ask Deana Shorten about Alberta's booming economy, she grimaces in dismay. "Is it a boom?" she asks. "For whom?" While Alberta rockets into 2001, powered by multibillion- dollar surpluses as a result of spiralling natural gas prices and $30 US per barrel crude oil, Shorten warns that the streets are not paved with gold for middle- and low-income earners.

Despite Alberta's prosperity and thousands of new jobs, the 35-year- old Edmonton mother of four is struggling to make ends meet.

"Don't come here until you have a guaranteed job and a place to live," said Shorten, who is back combing the want ads after her $14 an hour contract job expired.

"Good, decent jobs are hard to find.

"If I took a job at $6 an hour, I might as well just put my kids in the government's hands and say: 'You take care of them because I can't.' "

While revenue is rising rapidly in Alberta, so too is the cost of doing business and the cost of just getting by.

Edmonton and Calgary inflation rates are leading the country and skyrocketing energy prices, which are helping to fill provincial coffers, threaten to boost the cost of living even higher over the cold winter months.

The cost of heating a home with natural gas in Alberta is expected to be twice as high as in Ontario in 2001.

While the Alberta government is attempting to soften the blow by subsidizing homeowners $50 a month for the first four months of the year, landlords can't be forced to pass the subsidy on to tenants.

Another $300 energy rebate to Albertans over age 16 along with a monthly $40 credit on residential electricity bills beginning in January won't do much to ease the pain for many Albertans, said Brian Bechtel, an Edmonton social activist.

Provincial social assistance levels have not changed since the early 1990s despite a cost of living that is increasing at an alarming rate.

Add to that the fact that while Alberta is Canada's only province without a provincial sales tax, it is also one of two provinces that charges an annual health insurance premium of more than $800 per family.

Bechtel said many tenants will be forced to move from place to place as energy costs drive up rents.

"These people see themselves falling further and further behind," he said.

Marjorie Bencz of Edmonton's Food Bank said that as many low-income Albertans spend more on shelter and heat, they'll have less for food.

The result, say social agencies, is more families going to food banks and more children going to school hungry.

Locally funded hot lunch and school snack programs feed 7,000 children in 30 Edmonton schools daily and more than 15,000 people rely on Edmonton's food bank for groceries.

"There seems to be this myth that economic growth is good for average people," said Patti Lawrence, a researcher with the South Peace Social Planning Council in the northwestern city of Grande Prairie.

"It's really good for people who own big companies or who are making all the money, but it doesn't trickle down to average families. What we're seeing is people who are not part of the boom are out in the cold."

She said that while Grande Prairie is booming, particularly in the retail sector and in restaurants and bars, most businesses offer only $5.90 per hour minimum-wage jobs.

When the money falls short, people have to turn to charities and churches to get by.

"People working in the volunteer sector are burnt out and there's a big crisis going on that nobody seems to want to talk about," Lawrence said.

In Calgary, the boom is creating traffic gridlock and putting pressure on schools, hospitals and neighbourhoods.

Meanwhile, the oilpatch is seeing a 135 per cent increase in on-the- job accidents as it recruits a younger and less experienced workforce to operate a record number of drilling and servicing rigs.

Don Herring, president of the Canadian Association of Oilwell Drilling Contractors, called the increase in accidents disturbing: "That's clearly the dark side of the boom."

The surge in workplace injuries generally in the province has forced the Workers' Compensation Board to hike its premiums for the first time in several years.

But the boom's most dramatic impact has been felt in the northern oilsands city of Fort McMurray, where oilfield construction projects are proceeding at a frenetic pace.

Guy Boutilier, member of the legislature for Fort McMurray and the city's former mayor, said the $30-billion contruction boom has boosted the area population by 10,000, most of them transient workers.

The influx has put incredible pressure on the housing market and boosted crime rates.

"Money doesn't always bring prosperity; sometimes it brings in evil," said Phil Meagher, a city councillor and high school vice-principal.

Impaired driving offences have nearly doubled over the previous year, and the police and courts are struggling to cope.

When provincial court Judge Stan Peck saw 18 impaired driving cases on his Oct. 25 court docket, he handed out jail sentences to drive the message home.

"It's about time people realize I will use every method I have to keep drinking and driving off the roads," he declared as he sent three first-time offenders to jail.

RCMP are also struggling to address a signifigant increase in illegal drug use and other crimes. Police officers each have about 140 cases annually - about double the workload they should be handling, according to Insp. Paul McLennan.

Housing has become the most critical issue in the city of 42,000. Housing prices have risen dramatically to become the third-highest in Canada. Rents have doubled.

Jean Jensen, a low-cost housing advocate, calls it a crisis.

She said local wage-earners in the retail and hospitality industries cannot compete with the highly paid construction workers for housing.

"The minimum wage earner can no longer survive here," said Jensen, 71, whose own rent for a two-bedroom apartment is jumping to $900 from $470 per month.

Several Fort McMurray businesses, including the Tim Hortons Donuts and Wendy's restaurants, have had to reduce their hours of service because they can't get staff.

Mayor Doug Faulkner said no one is sleeping out in the snow but the municipality needs $60 million in social housing and affordable housing over the next five years.

"We can't wait much longer," he said. "We have a quality of life here that will be affected.

"People think we're at the end of the rainbow here and that we have lots of wealth and lots of jobs. But the reality is: the oil industry has lots of wealth. We don't."

-- (in@energy.news), December 20, 2000.


http://calgary.globaltv.com/cal/news/stories/news-20001221- 181020.html

Soaring Electricity Costs Force Layoffs At Foundry

Foothillls Blames Move On Quintupling Of Electrical Bill In January

CALGARY, Updated 5:27 p.m. MST December 21, 2000 -- The electricity Grinch has stolen Christmas from workers at the Foothills Steel Foundry.

About 25 employees of the plant in southeast Calgary have been served layoff notice, and the company blames the skyrocketing cost of electricity for the move.

The layoff announcement has employees upset and worried -- especially people like Art Nicholson, who's worked there for 30 years.

The layoff notice served Thursday goes into effect on January 2. It affects half the people working in the melting and moulting sections of the foundry, and comes as a result of the shutdown of the plant's arc furnace.

"I never think we are going to be laid off -- suddenly it happens," says Nicholson.

The foundry says it had to make the decision because of soaring costs.

Foothills says its electricity bill is now $15,000 a month, or 5.5 cents per kilowatt hour. In January, its projected monthly bill will be $75,000, or up to 24 cents per kilowatt hour.

The company blames the government's deregulation strategy. It says they were given false assurances that power costs would remain manageable.

With reporting by Louie Koutis, Global News

-- (in@energy.news), December 22, 2000.


Moderation questions? read the FAQ