Author of the article: Lisa Johnson
Publishing date:Jul 17, 2021
The sun sets as the sky gives off a redish glow behind power lines along the Anthony Henday Dr. in Edmonton, May 5, 2021. Ed Kaiser/Postmedia
Alberta energy consumers will pay back, with small increases to their utility bills, the outstanding debt from a government pandemic deferral program.
The extra charges to come in the fall are meant to cover outstanding debt owed to gas and electricity providers resulting from the government utility deferral program. That operation was aimed at helping those who struggled to pay bills last year during the first wave of the COVID-19 pandemic.
More than 245,000 electricity customers and 181,000 natural gas customers — about 16 per cent of each customer base — took advantage of the program first announced in March last year. Of approximately $92 million in deferred payments, $13 million to $16 million remain outstanding, based on early estimates from the government.
Natural gas and electricity associate minister Dale Nally said in a statement this week the small, temporary rate rider will ensure the debt will be repaid “in the most transparent and straightforward manner.”
It’s up to the Alberta Utility Commission to now calculate the exact amount of the rate rider and when it will be added to electricity and natural gas bills. But Nally noted that the rate rider could begin in the fall and is expected to be only a fraction of a dollar for a few months for the average household.
“The program’s intention was to provide relief to those hardest hit by the pandemic while having a minimal impact on utility bills for consumers as a whole,” said Nally.
In a Saturday statement in response to questions from Postmedia, he said outstanding debt like this is often dealt with through a rate rider.
“Ultimately when it comes to the method of repayment, taxpayers and rate payers are the same people and this is the most transparent and straightforward way to cover the debt.
The Utility Payment Deferral Program Act, passed in the legislature last May, allowed for the introduction of rate riders to recover outstanding debt, but the announcement still surprised one energy expert.
Joel MacDonald at Energyrates.ca, which compares energy rates across provinces, said he has not seen a utility-related government program funded in this way in a mandatory, regulated industry.
“It’s really being forced upon Albertans,” said MacDonald, who noted the price tag could be higher than a fraction of a dollar for some industrial sites that did not qualify for the deferral but still have to pay.
He added the biggest concern is that the move could open the door for similar ratepayer-funded programs in the future.
“Are they opening up Pandora’s box?” he said, adding rate riders are normally used to pay for things like regional infrastructure upgrades.
NDP energy critic Kathleen Ganley said in a statement the UCP government needs to cover the costs of the utility deferral program and bring back the price cap.
“Downloading more costs on to Albertans and asking them to reach further into their pocket as they struggle to make ends meet is unfair and will only hurt our recovery. Albertans deserve stable and affordable electricity, not unpredictable punishing spikes,” said Ganley.
The deferral was available to electricity consumers who use less than 250,000 kilowatt hours of electricity per year and natural gas consumers, who consume less than 2,500 gigajoules per year.
Alberta energy consumers will pay back, with small increases to their utility bills, the outstanding debt from a government pandemic deferral program.
The extra charges to come in the fall are meant to cover outstanding debt owed to gas and electricity providers resulting from the government utility deferral program. That operation was aimed at helping those who struggled to pay bills last year during the first wave of the COVID-19 pandemic.
More than 245,000 electricity customers and 181,000 natural gas customers — about 16 per cent of each customer base — took advantage of the program first announced in March last year. Of approximately $92 million in deferred payments, $13 million to $16 million remain outstanding, based on early estimates from the government.
Natural gas and electricity associate minister Dale Nally said in a statement this week the small, temporary rate rider will ensure the debt will be repaid “in the most transparent and straightforward manner.”
It’s up to the Alberta Utility Commission to now calculate the exact amount of the rate rider and when it will be added to electricity and natural gas bills. But Nally noted that the rate rider could begin in the fall and is expected to be only a fraction of a dollar for a few months for the average household.
“The program’s intention was to provide relief to those hardest hit by the pandemic while having a minimal impact on utility bills for consumers as a whole,” said Nally.
In a Saturday statement in response to questions from Postmedia, he said outstanding debt like this is often dealt with through a rate rider.
“Ultimately when it comes to the method of repayment, taxpayers and rate payers are the same people and this is the most transparent and straightforward way to cover the debt.
The Utility Payment Deferral Program Act, passed in the legislature last May, allowed for the introduction of rate riders to recover outstanding debt, but the announcement still surprised one energy expert.
Joel MacDonald at Energyrates.ca, which compares energy rates across provinces, said he has not seen a utility-related government program funded in this way in a mandatory, regulated industry.
“It’s really being forced upon Albertans,” said MacDonald, who noted the price tag could be higher than a fraction of a dollar for some industrial sites that did not qualify for the deferral but still have to pay.
He added the biggest concern is that the move could open the door for similar ratepayer-funded programs in the future.
“Are they opening up Pandora’s box?” he said, adding rate riders are normally used to pay for things like regional infrastructure upgrades.
NDP energy critic Kathleen Ganley said in a statement the UCP government needs to cover the costs of the utility deferral program and bring back the price cap.
“Downloading more costs on to Albertans and asking them to reach further into their pocket as they struggle to make ends meet is unfair and will only hurt our recovery. Albertans deserve stable and affordable electricity, not unpredictable punishing spikes,” said Ganley.
The deferral was available to electricity consumers who use less than 250,000 kilowatt hours of electricity per year and natural gas consumers, who consume less than 2,500 gigajoules per year.
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