McNamara: How Much Will It Cost?

[Oscar]

How Much Will It Cost Us?

November 30, 2009

Alberta Conservative MLAs and several electricity generators and distributors are openly implementing a wealth transfer from Albertans to large energy companies. They want to turn Alberta into an electricity generating hub to supply the United States, while passing all the costs onto taxpayers.

TRANSMISSION LINES – The Alberta Government passed Bill-50 which allows them to order construction of a $20 billion transmission line system. We pay all the bills so AltaLink, TransCanada Corp, TransAlta and Capital Power can reap all the profits.

HIGHER TRANSMISSION BILLS - Energy Minister Mel Knight said the 15% share of the price increase paid by residential customers would amount to $8 per month ($96 per year). Gary Holden from Enmax in Calgary said the increase would be three times that much. Though commercial and industrial users will pay the other 85%, the consumer will end up paying that share as well. We always do.

HIGHER ELECTRICITY BILLS – The North American Free Trade Agreement (NAFTA) mandates that a supplier must charge the same rates in its domestic market as it does for export. California is paying 16.4 cents per kwh while Albertans pay about 8 cents per kwh. The cost of the electricity we use will double as soon as exports to the United States begin.

SUBSIDIES TO BUILD REACTORS - In their 2008 Economic Impact Report, Bruce Power claimed that four reactors would cost $12 billion while Atomic Energy of Canada Limited quoted Ontario a price of $13 billion for each reactor. Four reactors would cost $52 billion or $40 billion more than Bruce Power’s estimate. When asked who would pay the cost overruns, Judi Chambers from Bruce Power responded in writing: “The Alberta Government will examine this issue, should it apply.” Who else besides taxpayers will pay this $40 billion subsidy?

LIABILITY INSURANCE – No company will insure the nuclear industry. Liability to the nuclear owners is currently capped at $75 million by the Canadian Government while the cost of a large nuclear accident is estimated over $500 billion. In other words, if your $250,000 house was lost in an accident, the owner of the nuclear facility would only have to pay $37.50. If Canada raises the liability level to $650 million, the nuclear owners would still only be paying $325 toward replacing the cost of your $250,000 house.

ADDITIONAL DAMAGE – Any further costs for damages will be at the sole discretion of a Tribunal set up by the Canadian Government as laid out in the Nuclear Liability Act. Any damages awarded will be paid by taxpayers. The Act also protects the contractors and suppliers from prosecution, even if they are at fault.

INFRASTRUCTURE COSTS – The construction and operation of the nuclear reactors will double the size of Peace River. Taxpayers will be on the hook for the infrastructure that has to be built. This in itself would be several billion dollars. You just have to look at Fort McMurray for proof. Taxpayers get to pay all the costs of transmission lines, infrastructure, higher electricity rates and nuclear subsidies to allow the companies to generate and sell electricity to the Americans.

Do We Need The Electricity?

Alberta has 12,500 megawatts (MW) of electricity generating capacity (EGC) to service a peak-demand day of 9806 MW (August 2008). This 25% excess EGC is three times as much as the province had in 2006. Alberta has reciprocity agreements with Saskatchewan and BC for an additional 900 MW of electricity.

The Alberta Electric Systems Operator (AESO) estimates we will need an additional 4000 MW of EGC by 2017. The AESO has received proposals for 26,000 MW of new EGC. Alberta requires less than 20% of this amount in the next ten years; the other 80% is being planned for export to the United States.

A handful of Alberta-based energy companies want to build large coal, gas and nuclear generating plants in remote areas and ship the electricity thousands of kilometres to the end-user. The rest of the world is realizing that electricity must be generated as close to its end-use as possible to be efficient. 65% of the energy of coal, gas, oil, biomass, bio-fuels or nuclear is LOST as heat when used to generate electricity. Only 35% of the energy from these fuels gets into the transmission lines and up to 20% of this amount disappears through line losses. Barely a quarter (28%) of the energy in the fuel gets to the customer.

This is the reason TransCanada Energy, TransAlta, Capital Power and ATCO are going to court to try to stop ENMAX of Calgary from building a natural gas fired co-generation facility near the city. Proximity to end-user will allow ENMAX to get over 60% of the energy from the fuel to the end-user instead of 28%. If all EGC in Alberta was built close to the customer, we would only require half of our current capacity.

The companies that will benefit are replete with former conservative MLAs and party insiders. AltaLink, anointed by Energy Minister Mel Knight to build one of the lines without having to bid on the project, is a case in point. Board Chair David Tuer was the “Tory budget guru and former Calgary Health Region chairman” (Rick Bell, Sept. 5, 2009). He is joined on the Board by former Finance Minister Pat Nelson and former Chairman of the Alberta Economic Development Authority, Doug Mitchell. All were prominent members of Ralph Klein’s era that hatched this electricity-exporting scheme. They were in office when the laws were changed to make taxpayers responsible for the cost of transmission lines. Now, they’re on the Board of Directors of the companies that stand to make the most money from it.

In the past 6 months, our MLAs have taken away our property rights with Bill-19 and saddled us with a $20 billion debt for transmission lines with Bill-50. Nuclear reactors in Peace River would require a $4 billion transmission line to connect them to Edmonton and $3 billion for infrastructure for Peace River. Alberta does not need the electricity. Why should Albertans pay $7 billion in costs to enable a nuclear company from Ontario to sell electricity to the United States?

There is no panic to rush forward, as we use less electricity now than we did in 2006 (AESO Website). We didn’t have blackouts then; we won’t have them now.

Call or write MLA Frank Oberle (780) 624-5400 or peace.river@assembly.ab.ca. Tell him to do what’s best for Albertans, not Californians and Bruce Power.

Weberville Area Connection
entwork@hotmail.com