The Balancing Pool was set up as an independent government agency meant to backstop power purchase arrangements (PPAs) that were created when Alberta’s electricity industry was deregulated in the late 1990s
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Amid heavy criticism over soaring utility costs, Alberta’s UCP government is using a more-than-year-old report to lay the blame at the feet of the NDP opposition.
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On Thursday, Electricity and Natural Gas Associate Minister Dale Nally released a review done by consulting firm Deloitte, in March 2021. The report draws from already publicly available financial information, concluding that the province’s Balancing Pool lost $1.34 billion between 2015 and 2019 due to the termination of electricity agreements.
The Balancing Pool was set up as an independent government agency meant to backstop power purchase arrangements (PPAs) that were created when Alberta’s electricity industry was deregulated in the late 1990s.
It’s been politically controversial since it began suffering big financial losses in 2016, after the former NDP government raised the province’s carbon levy on coal-fired power plants, which triggered some companies to return their agreements.
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To help recover the losses, electricity consumers were hit with a surcharge on their monthly bills, which are expected to last until 2030. Now, Nally estimates the Balancing Pool still owes nearly $700 million to the government. All remaining PPAs expired in 2020.
Nally said Thursday he wanted to draw attention to the exact costs of “ideological efforts” to decarbonize the electricity system, and the review provides confirmation of the “boondoggle” created by the NDP when PPAs were ended.
“It was a mistake purely driven by their leftist friends and ideological extremists,” said Nally, who reiterated that the government plans to dissolve the Balancing Pool with legislation in “the coming months.”
“Albertans deserved power, and should not be tricked by promises to decrease utility bills with taxpayer-funded rate caps or other short-sighted policies that both contribute to inflation and do nothing to enhance future capacity or foster competition,” said Nally.
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Nally’s office did not immediately respond to questions from Postmedia, including for the cost of the Deloitte review and why it was being released now.
The news conference comes after a University of Calgary study found markups from producers have been the biggest factor contributing to high power prices over the past year.
The UCP has promised to provide rebates on electricity bills and potentially natural gas bills, but those are still months away. The government did enact a gas tax holiday, saving Albertans approximately 13 cents per liter beginning April 1.
Opposition NDP energy critic Kathleen Ganley called the release of the review Thursday a distraction.
“This for the UCP has been an entirely political exercise … they basically sat on the report and released it now to try to distract Albertans from their inability to get anything done with respect to utility rebates,” said Ganley, who said long-term solutions are also needed for the energy grid, including added extra electricity storage.
“Our concern is for the people of this province who are struggling to pay their bills,” said Ganley, who accused the UCP of being more concerned about corporate profits.
In its campaign platform, the UCP promised to ask the auditor general, who is an independent officer of the legislature, to conduct “a special duty audit” of the pool’s losses.
However, when asked Thursday why the government commissioned a review from Deloitte instead, Nally said it wanted to be transparent.
