Thursday, January 17, 2008

Alberta electricity an empire built on lies and misdirection

The deregulation of Alberta’s power grid and the subsequent mess was not an accident. It was in fact the plan from the start.

Paying friends hundreds of thousand of dollars to “fix” an electrical system that is going precisely the way they had hoped is nothing but another act of misdirection and still another lie.

They find it more convenient and easier to sell an error in judgment than to admit they embarked on what amounts to a royal rip off.

As a plus it puts more coin into the pocket of friends.

John Clark

Wednesday, January 16, 2008

Alberta electricty pressures.

Following my lead-in there is an excellent evaluation of Alberta's electrical power situation. The web link to the journal article has been taken down so I have copied here.

Not covered in the Article by Joseph Doucetis is the Fording Coal dilemma which is huge and should get some air.

1. Fording was purchased by Sherritt (Ontario teachers assn pension)
2. Fording kept title to the Anthracite (tool) coal.
3. Sherritt took the title to all the lower quality heating coal.
4. Fording is presently completing or has completed the environmental studies for the Genesee like generating unit at Brooks AB. (4000 mv, half of the present generation capacity of Alberta)
5. Fording will buy coal from Sherritt for the generation at prices that Sherrit set as a seperate entity.

Depending on the price the Ontario Teachers assn charges Fording for the coal, the prices of electricity should come down!

The Government has allowed the prices to escalate by constricting growth forcing gas generation on line in the meantime.

When Fording comes on they will peg their prices at the "market" which will allow them huge, unprecedented profits.

The environmental studies should be complete. That means an announcement will be made shortly after an election.

Consider: When Fording owned all the coal they tried to build the plant and got shut down by what appears to be government sponsored environmental complaints allowed by a Government who had every interest in killing the project. Fording was prepared to build the power lines to Calgary and South to Southern Alberta. Trans Alta fought this. (who would have guessed?)

On a different line the City of Edmonton fought the Province for permission to build the expansion of Genesse and were like Fording, denied permission until the scalping PPA agreements were in place.

In short the Conservatives again have autored a rip off situation for Albertans.

John Clark

Wednesday » January 16 » 2008

Alberta's power play difficult to assess
Government's electricity restructuring results can't be measured simply by comparing prices

Joseph Doucet


Saturday, January 12, 2008 - Edmonton Journal

In a letter to the Journal, "6 years later, deregulation hasn't lived up to the promises" (Jan. 10), a former provincial electricity planner suggested that the restructuring of Alberta's electricity industry and markets has not delivered on its "promises." Of particular interest to consumers is Keith Provost's statement that "Albertans have paid more than $16 billion more for their electricity needs than if the system had not been deregulated."

Despite his contention that "the cost can be easily calculated by anyone with a cursory knowledge of the economics of electricity generation," I would suggest that calculating the costs and benefits of restructuring is anything but an easy exercise.

One of the all-too-common mistakes made in this type of discussion is to simply compare prices today with prices in previous years. Electricity prices in Alberta, as in almost every other jurisdiction, are higher today than they were in 1995, the year in which Alberta's first piece of restructuring legislation, the Electric Utilities Act, was passed.

Why can't we simply compare 2008 with 1995? Well, the makeup of the industry is actually quite different today. For instance, in the mid-1990s about 75 per cent of Alberta electricity was generated with coal. Today the figure is a little under 50 per cent. Natural gas, on the other hand, makes up about 40 per cent of today's generation capacity; in 1995 it accounted for less than 15 per cent. Thus we can't expect underlying costs, and the resulting prices, to be directly comparable.

Informed readers will point out, quite correctly, that coal prices are both lower and less volatile than natural gas prices. Thus, the greater reliance on natural gas is bound to have had an impact on electricity prices. This is certainly true. But is the increased use of natural gas in Alberta attributable to restructuring? I'm not so sure. In the 1990s North American electricity planners believed that natural gas was going to remain cheap for a long time. We were wrong.

But I don't believe that a regulated generation sector in Alberta would have seen things any differently.

The real question to ask in order to begin to understand the price impact of restructuring is this: What would our electricity industry look like today had the Government of Alberta NOT embarked on the restructuring exercise? What fuels and technologies would have been chosen in a regulated system? What types of plants would have been built, and where? What research and development would have been undertaken? Which risks would have been allocated to electricity consumers and which to the regulated firms?

There are no straightforward answers to these questions, despite the best intentions of Monday morning quarterbacks. In truth it is impossible to know exactly what our electricity industry would look like today had the government not introduced restructuring. As a result it is very difficult to say what price we would be paying under the "old" system.

That being said, the retail price is just one measure of the efficiency of the electricity industry. It is certainly an important one and understandably the main focus of attention of residential consumers. But retail prices can be deceiving, such as in Ontario where retail prices have been regulated to artificially low levels well below the wholesale prices. This hides the true costs of electricity and shifts the burden to taxpayers. This doesn't happen here.

To suggest that prices in some non-restructured jurisdictions have risen less than in restructured jurisdictions misses the important point that the underlying costs and technologies differ a great deal between different provinces and states and that, for the most part, low-cost North American jurisdictions did not embark on restructuring.

Many very-low-cost jurisdictions, notably those with large hydroelectric capacity, continue to benefit from their low-cost technologies despite the fact that they have not changed the structure of their industry. Relatively low prices in these areas for the most part reflect the low costs of generation, not the benefits of the regulated system.

On the other hand, many high-cost jurisdictions saw costs rising, principally because of the need to build more generation, and moved to restructuring in part because of the desire to introduce competition in the generation investment and operation decisions.

In the last 10 years close to 4,500 megawatts of new generation capacity has been built in Alberta. This is one reason that there is less danger of the lights going out in Alberta than in Ontario - proportionally more capacity has been built here than in Ontario. Has more capacity been built than would have been the case without restructuring? This again is hard to say, because we simply don't have the crystal ball that answers the "what if" questions about the past.

More significantly than the amount of generation, though, is the fact that the new electricity generation plants in Alberta have been built without any price or profit guarantee from the government or the regulator as was the case in the "good old days." This is a comparison that we can make. Alberta ratepayers no longer carry the risk of construction-cost overruns, plant operation or fuel prices via a regulated system. This is a very real benefit to Albertans. Of course, Alberta electricity consumers do bear some risk with respect to fuel price increases. There is no way around this.

Was the government's plan perfect? Of course it wasn't, as I have often written. There were errors in planning and in implementation. The lessons of history cannot be ignored. But let's move on and make our electricity sector as productive, efficient and environmentally responsible as possible.

Is Alberta's electricity model today a panacea? Of course it isn't. I would like to see more competition in the retail sector, but fear that won't happen because of our small market size, and because electricity prices really are, relatively speaking, low. However, lack of competition on the retail side should not be mistaken for, or confused with, lack of competition in the wholesale and investment market.

It is also true that we have major challenges ahead in co-ordinating the development of regulated transmission in sync with our competitive generation market. This challenge is not unique to Alberta and will take a lot of effort and smart people to solve. It isn't an easy problem.
And clearly the newly created Alberta Utilities Commission has to regain public trust in its regulation of the electricity industry.

This exercise will take time, commitment and leadership.
So are there challenges ahead? Most definitely. But this is not a simple industry and the questions to be asked are complex. Suggesting otherwise does a disservice to the debate.
Joseph Doucet is professor of energy policy and director of the Centre for Applied Business Research in Energy and the Environment at the U of A's School of Business.

Tuesday, January 15, 2008

Alberta Heritage Trust Funding is a farce!

The Conservatives have raped the Heritage Trust fund as with every other resource we have!

The Conservatives claim they are being more open but in doing so they have to change history and misrepresent figures and the truth.

The short truth being that the Heritage Trust Fund should have been 40 billions of dollars by this time is only sitting at a very small 1.6 billion.

The balance whisked away unaccounted for by this Government. It would still be going on if the Liberals had not busted them.

After finally admitting they were fleecing the Heritage Trust fund they come up with a one liner they hope to cover their pillage as in “The net income earned from the Fund’s investments, less the amount retained for inflation-proofing, is transferred to the Province’s main operating fund, the General Revenue Fund (the GRF), to help pay for government programs.” This was written by spin doctors!

Outright lies, and misdirection are the hallmark of this Government! They are trying very hard to spin this misappropriation of funds off with the repeated lines “Of the total realized net income during the past six months, $662 million is transferred to the GRF and $248 million is retained in the Fund for inflation-proofing.”

In this bit of chicanery they have invented a term that never existed prior to their web page “inflation-proofing the Heritage Trust” Such crap!

When the Heritage Trust Fund was set up the moneys made by the Heritage trust fund were to be reinvested in that Fund. This Government robbed the Heritage Trust fund of all its dividend earnings preventing the compounding of investment. The purpose of this was to debilitate the Heritage Trust Fund in order to privatize it. And that is a very bad move.

As to adding to community projects from the billions they have taken from the Heritage Trust Fund is simply another aspect of a large and thinly veiled misrepresentation by spin doctors!

When the money goes into the General Operating Revenues it is more than likely spent on paying for Government Aircraft, paying the Elected Members expense accounts and quick flights to the Orient or Washington and possibly the cafeteria bills. It is after all, General Revenue.

The citizens of this province have suffered through 14 years of outright lies and misdirection watching the money and resources go to a very short list of Tory friends. This line of Heritage Trust stuff is no exception.

It was a year ago now when they first announced the privatization of the Heritage
Trust Fund saying it had to be privatized because "it was preforming very poorly"

John Clark

Monday, January 14, 2008

The Scale of Alberta Power

Alberta’s power runs close to 9000 megawatts

If there is an increase of 1 cent anywhere in the system, it means a 90,000 dollars exchange in every hour that .01 is in effect.

That is 2.16 million dollars a day that some one gains and some one looses.

1 cent increase in the power rate means 10 dollars increase in your power based on a 1000 kwh consumption. This makes it easy for power companies to increase their rates. Ater all, who reads their light bill?

One cent increases are impossibly high and there is no protection from this Government.

John Clark

Thursday, January 10, 2008

Daycare crippled to fund Oil Stock profits

No, the lead in is not a large leap of imagination!

The Edmonton Sun is clearly the best "News" Newspaper in town!

Daycare owners, Grits slam funding methods

Shortage of quality, qualified caregivers continues

A decision to fund 81 separate Alberta daycare centres through grants last year proves the province made a big mistake when it eliminated operating grants a decade ago, say operators.
And according to the Opposition, the nature of those grants - which are ostensibly to ensure centres can achieve accreditation under the province's new quality standards program - is such that much of what they'll be spent on would have been covered under the old grant system.
"In many cases, when I'm talking to owners or operators, they're telling me they don't have the time or resources to wade through these grant applications again and again," said Liberal critic Weslyn Mather. "Where we're at right now is that this does not solve the ongoing operating cost issue, which is leading to such a shortage of qualified staff that some daycare centres are closing."

Operating grants were eliminated when Alberta privatized the industry in the early 1990s. Soon after, a glut of private daycares that tried to compete using bottom-line staff costs sprung up, leading to a scarcity of qualified workers.

That's led to parents complaining of shortages for years now in quality, qualified daycares, even as 60% of Alberta daycares have vacancies.

One prominent operator, who requested anonymity due to an ongoing working relationship with government, said the government's carrot-and-stick approach to quality control is unnecessary.
"This problem only exists because they allowed so many under-qualified operations in the first place," she said. "None of these operators, in my experience, have poor intentions. They're trying hard to provide good service to children. They simply can't afford to hire qualified staff on what parents can afford to pay each month."

The operator said the government seems to be "genuinely trying" to fix the industry but doesn't have the humility to simply admit deregulation was a failure and reinstate the grants.
But a spokesman for Alberta Children's Services said the grant structure - which unlike operating grants does not allow the operator to use public money for staff wages (although top-ups are part of it) or rent, among other items - is what the public has indicated it wants.
"The public has consistently told us that we should be focusing funding on increased wages for staff and for supporting middle-income families," said Cathy Ducharme "And we know that this grant structure is working, because it is opening up new spaces."

Space isn't the problem, said Mather. Quality is.
"Alberta has regulated child care for only 10% of our children and that's terrible," she said, noting more than 70% of two-parent homes feature both parents working.
"Only Newfoundland and Saskatchewan are worse. What a record for us. What a record of failure for a province as wealthy as Alberta."

Wednesday, January 09, 2008

Alberta Conservatives give lists of favors bought.

The release of the document “Alberta Blue Book of expenditures shows just how this Government pays and pays their friends as in dropping cash into their pockets with no other reason than they are perceived as being a “voting block”

$24.5 billion of the $35 billion dollar budget was handed out with no explanation.

I have said before and will continue to say “It is difficult to tell the difference between the Alberta Conservative Government and Organized Crime”

Meanwhile seniors and thoes less privilaged live in degredation and hard ship and ordinary citizens cannot keep up to their electricity and fuel bills.

Scott Hennig, of the Canadian Taxpayers Federation, was reacting to the release of the government 2007 Blue Books on Monday, a 1,000 page line-by-line account of all capital spending and operating grants. The list, although online for the first time, is virtually useless to the pubic, said Hennig. Unlike its federal counterpart, the government doesn’t link the list to explanations of why spending was necessary.

Further details in the Edmonton Sun which, is putting out some really good news now-days.

John Clark

Tuesday, January 08, 2008

Alberta Liberals on top of Electrical Sham

Sent: Tuesday, January 08, 2008 2:07 PM

Alberta Liberals Raise Questions about Department of Energy’s Million Dollar Man

Edmonton – Hugh MacDonald, Alberta Liberal Shadow Minister of Energy, says government documents show one of the architects of Bill 46 received almost $1.4 million from the provincial government over the last four years.

The provincial Blue Book, or list of provincial grants and payments, shows a numbered company owned by Kellan Fluckiger received $354,807 in the last year. Combined with the previous three years, the contracts add up to $1,358,645.

“The government isn’t sending Albertans a very good message about accountability and priorities,” says MacDonald. “Just recently, they attempted to reduce the Auditor General’s budget by $20,000. In the same fiscal year, they handed out a six figure contract to the architect of a democratically damaging piece of legislation.”

Fluckiger was one of those responsible for the government’s flawed Bill 46, which split the Energy and Utilities Board into two separate entities while failing to offer adequate protections for landowners. The bill was forced through the Legislature last fall. The government evoked closure on all three stages of the bill.

MacDonald notes that Fluckiger was originally hired by the Department of Energy to fix electricity deregulation, yet the system has reached a crisis since his hiring.

“Electricity deregulation has been one of the most expensive failures in Alberta’s history,” says MacDonald. “Alberta consumers continue to struggle to pay their monthly power bills, while the government is very generous to Mr. Fluckiger, paying him almost $1.4 million.”

Fluckiger is currently under a conflict of interest investigation by the Auditor General of Alberta. Fluckiger resigned from his position at Alberta Energy in October of 2007.

“Mr. Fluckiger has been collecting a very generous paycheque for years, for what results?” asks MacDonald. “The Minister of Energy owes it to Alberta taxpayers to immediately release the details of his role, his recent resignation, and whether he was paid a severance package on top of these expensive annual contracts.”


For more information contact:
Hugh MacDonald or Yolande Cole
Shadow Energy Minister Media Liaison
(780) 914-5270 (780) 446-6868

Alberta rejects carbon tax


Carbon Tax a no Starter in Alberta reads the headline.

A carbon tax would be returned to the provincial coffer. That is totally against the Conservative mantra!

Instead, The Alberta Conservatives have been on a path of allowing huge increase in electricity and gas charges to heat our homes. These windfall profits go to ENMAX and EPCOR. We presently pay the highest prices in the Americas!

Following the trickle down policy of Conservatives in General, some of these funds will go to the cities of Edmonton (EPCOR) and Calgary (ENMAX) and the very limited return will be added to the city surplus quietly and without fan fair.

More reasons to get this government out of office come Election Day.

John Clark

Saturday, January 05, 2008

Alberta Royalty losses or something else?

Calgary Herald and Edmonton Journal report multi billions of dollars lost to Albertans from Royalties.

Alberta’s Auditor General has yet to report on Conservative Members padding their own pockets through royalty “losses”

The Auditor General will not report until March. The Conservatives want an Election in February
. I think this is blatant!

John Clark

Alberta Budget Feb 14-08

Consider first, in the past 14 years the Conservatives have never followed a budget! The Budget has been a piece of useless paper as far as the general public is concerned. It simply meets a legal requirement.

This will take some effort but, in the near future I will map out the lay of the financial land and leave you with a guide by which you can view the Budget when it comes.

Most of the budget by its nature will deal with "projected revenues" based on "projected figures" which in this case will be absolutely nothing.

The production is flat. The royalties are down. The Lease purchase is down. The expenses are up.

Will make an effort to organize for you.

John Clark

Wednesday, January 02, 2008

Alberta oil hits 100.00

And, Alberta is broke so, no budget before election.

The Conservatives figure Alberta is making too much so they have reduced Alberta Royalties to 19%. Conventional oil is now priced in Canadian dollars and not at the US equivalent. Still more losses. Their philosophy is “How much does Alberta need?” as opposed to “What is Alberta’s entitlement?”

Meanwhile they are blowing money like there is no tomorrow and for them, this may be the case.

Word has it that Stelmach will go into an election before he presents a budget to Alberta. This is because the lease money is down; the energy royalties are down at every level and he is still spending to get elected.

If elected again you can be sure that Albertans will be asked to dig into their pockets to pay off the big deficit these guys are creating. There is no way he will dig into the resources for the money he has already short changed us.

John Clark
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