Grande Prairie scrutinizing electricity costs amid concerns about disparities across Alberta
Story by CBC/Radio-Canada •
For about 30 years, ERCO Worldwide produced sodium chlorate, used to bleach pulp, south of Grande Prairie.© Luke Ettinger/CBC
The City of Grande Prairie plans to gather data on commercial buildings' electricity bills as they raise concerns about disparities in electricity pricing across the province.
The move comes a year after production ceased at a northern Alberta sodium chlorate facility partly because of the cost of electricity in the province.
For about 30 years, ERCO Worldwide produced sodium chlorate, used to bleach pulp, south of Grande Prairie. But last August, the company started shipping the product from B.C. and Manitoba.
John Christie, vice president of operations at ERCO, said production is more viable elsewhere because of current and future electricity costs in Alberta. He said ERCO had to temporarily curtail production when manufacturing costs were too high at the Alberta plant.
"And over the last number of years, we found that we were shutting that plant down more often than we were operating it."
Grande Prairie Mayor Jackie Clayton said the closure of a business like ERCO affects other industries in the region, and that's part of why the city wants to look more closely at how electricity transmission and distribution costs look different across Alberta.
"We know that the disparity [across the province] is significant in residential and we're quite confident that it's significant in commercial too. However, we just need accurate data," Clayton said.
In 2022, the city moved an Alberta Municipalities resolution to more evenly distribute electricity costs around the province.
"The report that's going to come from administration in the next couple of months will focus on any changes that we've seen in [residential] rates, but also a lot of focus on commercial utility rates," Clayton said.
Large consumer lost
ERCO is a member of the Alberta Direct Connect Consumer Association, which represents some of Alberta's largest power users.
Executive director Colette Chekerda said electricity comprises between 25 to 60 per cent of members' operating costs. She said losing a large electricity consumer in the province, like ERCO, increases costs across the grid.
"Those responsible for paying have shrunk, but the costs haven't changed, so everyone picks up a bigger share," she said.
Chekerda said transmission fees, due to overbuilt infrastructure, are just one part of the increased cost of electricity-intensive business in Alberta.
"It doesn't matter whether you're a residential customer or a large industrial customer opening your power bills — the last six months has truly been a shock."
Chekerda said it requires policy change.
Ministry of Affordability and Utilities spokesperson Andrea Farmer said in a statementthat they are "constantly reviewing" the electricity system, and that work includes evaluating the province's existing transmission policy.
Christie said the ERCO facility near Grande Prairie is now acting as a distribution hub for sodium chlorate transported by rail to the region. But ending production contributed to around two dozen jobs lost.
"It's a very sad day when you have to close down a plant, and particularly when you have to release really good operating people and mechanical people and administrative people from a plant site," Christie said.
Christie said the feasibility of electricity-intensive production decreased following deregulation of generation in Alberta. He said the company closed its Bruderheim, Alta., plant in 2006, also due to rising electricity rates.
"Manufacturing costs for electricity began to rise. Transmission costs began to rise. And shortly afterwards, the competitiveness of electricity prices in Alberta began to become such that manufacturing these types of plants just became more and more uneconomical," he said.
Christie added that the loss of ERCO also affects economic diversity, noting the company used to purchase raw materials from the Windsor salt plant near Lindbergh, Alta.
The plant closed in August 2022, "shortly after we announced that we were going to shut down," Christie said.
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