Albertans risk higher electricity bills if we fail to develop new transmission lines



    CALGARY, Sept. 10 /CNW/ - Alberta's Market Surveillance Administrator
(MSA), Martin Merritt, argued in a public address today that Albertans will
face higher electricity bills if the province does not find fair and timely
ways to develop new transmission infrastructure.
    "I am concerned that electrical transmission projects in this province
may not be keeping up with our economic growth," he told a downtown Calgary
Rotary Club. "We need more than the supply necessary to meet Alberta's needs.
We need a system that allows electricity to flow freely around the province.
That requires adequate transmission capacity."
    According to Mr. Merritt, Alberta's electricity market provides consumers
with secure supplies and competitive pricing, but the transmission system is
becoming "undersized for the job in some places. Whether for home appliances
or running business operations, consumers will only get the best deal on power
when the transmission system can transport electricity from (almost) any
generator in Alberta to (almost) any consumer in Alberta."
    According to the MSA, in the five years from 2002-2007, Albertans paid
almost $300 million in subsidies to electricity generators to get around
transmission bottlenecks. The subsidization rate is presently $40-$50 million
annually. "This amounts to renting band-aids rather than fixing the root
problem," said Mr. Merritt.
    An independent agency developed to ensure that the province's electric
markets operate in a fair, efficient and competitive fashion, the MSA says
that much of the gridlock lies in the transmission system. "In southern
Alberta, we have great sites for generating electricity from the wind.
Investors are willing to build there, but we have a shortage of transmission.
Similarly, northern Alberta is the logical place to locate fossil fuel
generators, which are best located at low altitude, in cooler temperatures and
near a substantial supply of water. There, too, we have a shortage of
transmission. By bringing all electricity supply sources to all consumers
across the province, transmission provides us with choice and forces suppliers
to compete with each other. Subsidizing higher cost, less efficient generators
to locate in the middle does neither."
    "In constrained areas of our grid, congestion has dramatically pushed up
the energy losses from transportation. For example, between the Lake Wabamun
area where about 40% of Alberta's generation is located and the Calgary area,
losses average over 10%. According to the Alberta Electric System Operator,
additional transmission capacity in that corridor would save enough energy to
power half the City of Red Deer. Losses on that scale are pure economic and
environmental waste," Mr. Merritt said.
    "Albertans benefit the most from the most competitive market possible,"
he added. "We need more transmission capacity because that -- not subsidized
generators -- is the best way to assure the competitive market that Albertans
have come to expect."

    Alberta's Market Surveillance Administrator, Martin Merritt is head of an
independent agency developed to ensure that the province's electric markets
operate in a fair, efficient and competitive fashion. The MSA also monitors
the retail natural gas market.




For further information:

For further information: Martin Merritt, Market Surveillance
Administrator, (403) 233-4682, martin.merritt@albertamsa.ca

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MARKET SURVEILLANCE ADMINISTRATOR

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