Electrical System: Who Should Pay?

Grande Prairie residents pay an unfair amount for electricity. Last night, Council discussed our advocacy efforts surrounding electricity transmission and distribution charges.

In Alberta, costs are shared across the electrical service area. It costs a lot of money to service northern and rural areas. But all users, regardless of where they live, have equalized rates for transmission and distribution. Urban and southern residents pay more than the “real” cost of their service to subsidize other areas.

And this is a good thing! Urban residents (like me) benefit from the economic activity that happens outside our towns and cities. Our quality of life relies on vibrant rural areas. It makes sense that we help share the cost of electrifying the areas where our food is grown, our wood is cut, our energy is generated, our camping is awesome, and our economy is developed.

However: in most of Canada, urban residents across the province share the costs of electrifying the entire province. Which is fair.

But that isn’t the case in Alberta.

Alberta’s electricity grid is split into distinct service areas served by different companies. Costs are equalized across each service area, not across the province.

Grande Prairie is in the ATCO service area. The ATCO area has most of Alberta’s geographic area. But most of Alberta’s population lives outside it. Which means our distribution and transmission costs are HUGE. Our residents pay 2-4 times as much as residents in other service areas.

This isn’t fair. ALL Albertans, no matter where they live, benefit from what happens out in the country and way up in the north. So ALL Albertans should share the costs of electrifying our entire province. It doesn’t make sense to force a Grande Prairie family to help pay for what happens in Fort Chipewyan while not requiring the same of other urban families.

However, this isn’t just about fairness. It is also about what is good for ALL Albertans. Including those who live outside of ATCO areas.

Most of Alberta’s resource development happens in ATCO areas. When companies decide whether to invest in Alberta or elsewhere, electric costs are a major part of their decision. Having higher rates in Alberta’s North drives investment out of our province. That means that ALL Albertans lose out under our current arrangement.

There is also an environmental cost. Renewable micro-generation is a key part of Alberta reducing carbon intensity. But for many people in ATCO service areas, transmission/distribution costs prevent investment in micro-generation from making fiscal sense. We need to get those costs down.

Grande Prairie City Council believes that Alberta should adopt an approach similar to other provinces, including British Columbia and Saskatchewan. All communities should pay an equitable portion of province wide transmission and distribution costs.

We have advocated for this to provincial MLAs and Cabinet Ministers.

However, last night, Council also approved a Resolution that we will bring forward to the fall Alberta Municipalities conference. We’ll be asking other municipal Councils across the province to support it. If a majority do, then advocating for equitable electric costs will continue to be a priority for Alberta Municipalities. You can read the Resolution here.

I’m thankful for the work of Mayor Clayton and my Council colleagues for their work on this file.