Alberta's Gas Bills to Skyrocket : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread


Friday, January 19, 2001

Alberta's gas bills to skyrocket By CAROL HARRINGTON-- The Canadian Press

CALGARY (CP) -- Gas pains for Alberta residents are about to get worse, with an announcement Friday that natural gas bills will more than double this year.

"This is a time of great turmoil in energy prices," said Dick Frey, managing director of utilities for ATCO Gas.

"It's not just here, it's everywhere."

The gas company is increasing its winter rate by about 125 per cent to 810,000 Alberta customers, saying the hike is necessary to recover skyrocketing costs of buying the fuel.

The average February gas bill is expected to rise to $275 from $125, but the bill for a detached home would be substantially higher.

Consumer groups say the rate increase presents a significant burden, especially to seniors and others on fixed incomes.

"It's going to create hardships for them," said Jeff Jodoin of the Consumers Coalition of Alberta. "We would hope the government will provide greater rebates to ease this burden."

Huge increases in natural gas bills have become common across North America in past months.

ATCO employees have been busy fielding thousands of daily phone calls from frustrated customers who want either an explanation for the soaring bills or simply can't pay them. One Calgary radio station recently started a popular raffle that offers to pay the winner's monthly gas bills.

"At times one wonders whether anyone knows what's going on," Frey told a news conference. "Our customers are confused and concerned, and we share that concern."

The utility company stressed it wouldn't make money from the price hikes. ATCO profits by delivering natural gas -- an amount regulated by the Alberta Energy and Utility Board.

To help cushion consumers from the price hikes the Alberta government has announced homeowners will receive a $50 rebate on each gas bill between January and April and two $150 cheques to those who file income taxes.

ATCO officials also announced a credit crunch because it is owed $200 million by Albertans who have opted to have their bills averaged over a one-year period so that they pay the same each month -- even during the winter when bills have become exorbitant. In total, 233,000 Albertans -- that's 25 per cent of ATCO customers -- have their gas bills amortized over a one-year period.

"ATCO Gas does not have the financing strength to support the annualized rate," said chief financial officer Jim Campbell.

To ease ATCO's credit burden and to give Albertans a break on monthly pocketbooks, the gas company has applied to the provincial energy board for all gas bills to be amortized throughout 2001. If the plan is approved, Albertans will receive a minimum of a 50 per cent increase on monthly gas bills for the remaining year.

"But it comes at a price," Jerome Engler, ATCO executive vice-president, said of the plan. ATCO Gas has to take on more debt to carry the unpaid winter gas costs for the remainder of the year, and we have to borrow money from the banks."

ATCO officials believe they will have to borrow at least $500 million to cover the proposed annualized rate. The interest from that loan will be paid by Alberta customers.

Some consumer groups are pointing out the irony that people in Alberta, where natural gas is a plentiful resource, will be paying bills twice as high as consumers in Ontario.

"That is a pretty bitter pill to swallow," said Dan Kelly of the Canadian Federation of Independent Business.

Most of Ontario's natural gas is from Alberta, but the central Canadian province bought much of its energy last summer when prices were far lower.

Engler believes Ontario's gas bills will soon skyrocket.

"If you look at it at the end of 2001, I suspect that the prices in Alberta that consumers pay here will look reasonable and maybe even lower than the prices consumers pay in Ontario," he said.

-- Rachel Gibson (, January 19, 2001

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