Nally: Affordability and reliability of energy is priority one

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As our economy recovers from the pandemic, electricity supply is slowly catching up to record-breaking demand. Now, the war in Ukraine is causing more pricing pressure in the market.

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This is a reality check for policymakers: the affordability and reliability of our energy systems must be a priority one as we look to reduce emissions.

I am glad to see our energy-only electricity market respond to the pricing signals of late — with nearly 50 new projects bringing 4,000 megawatts of new generation online, competitive generators see a real opportunity in Alberta and we will all benefit from that increased supply. We need to support market-driven solutions to drive competition among private producers capable of delivering a scalable, low-carbon future in a way that doesn’t bankrupt citizens.

We’ve already seen the impact of a rushed transition on our electricity bills. Love it or hate it, coal allowed us to produce the low-cost, reliable power Albertans have trusted for generations. The pricing impact of eliminating coal was known, yet the NDP irresponsibly continued its ideological market meddling losing $1.3 billion from the Balancing Pool. We’ll all be repaying these losses on bills until 2030.

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Driving up costs even more, the Trudeau carbon tax increases on April 1 — a punishment for heating your homes and running your dishwashers — but it is unlikely to result in a material consumption decreases.

Worst of all, previous governments failed Albertans by allowing for an extensive $7.5-billion build-out of transmission systems when forecasts no longer supported this magnitude of investment. We are cleaning up from an NDP hangover.

Albertans hired us to deliver real fiscal responsibility and we’ve done that. Just $100 million in new, necessary transmission infrastructure was built in 2020, and none over the past year.

As consumer pocketbooks face the realities of a net-zero mandate, the Alberta NDP plan to cleverly hide the true cost of energy with a taxpayer-funded rate cap when competitive, subsidy-free fixed-rate contracts are widely available, offering similar price protections . Remember, everyday Albertans are often both the ratepayer and the taxpayer. This is akin to making our grandchildren pay part of this month’s utility bill. It also does nothing to address the root cause of these problems.

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We’re providing consumer relief now and aggressively pursuing all long-term options to keep utility costs in check. We’ve implemented a natural gas rebate to ensure Albertans never pay European-style highs. Provincial gasoline taxes of 13 cents per liter are being dropped starting April 1. Plus, a $150 electricity bill rebate is coming to nearly all homes, small businesses and farms.

Our core belief is Alberta ratepayers will see the best outcomes with a diverse mix of energy products that drive competition and avoid major reliability issues like California-style brownouts.

Major European governments have classified natural gas as a clean fuel, because it is. Most Liberal politicians ignore this fact.

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Capturing carbon emissions from 7,500 megawatts of natural gas power in Alberta will cost billions per year. The Alberta and federal governments are currently negotiating support for investments to help generate natural gas power with an even lower environmental impact — while cutting emissions in other sectors too.

Adding to the costs, transmission lines will need to connect new renewable projects to the grid, and thanks to the federal zero-emissions car sales target, distribution infrastructure will need to be drastically upgraded to account for home chargers.

If Rachel Notley’s promise of a net-zero grid while decreasing bills seems too good to be true, it’s because it is. This is expensive and complex work that must be carefully managed.

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Our government is taking practical steps to attract a clean energy future — one where private investors have a chance to succeed, where increased competition decreases prices and where greenhouse gas emissions fall to levels we can all be proud of.

You will see this strategy play out as we table electricity legislation this spring aimed to increase competition, enable more clean technologies and address long-term distribution planning needs, so our electricity delivery stays affordable and reliable.

That’s a promise we can stand by.

Dale Nally is Alberta’s associate minister of natural gas and electricity.

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