As of the new year, a monster from the Ralph Klein era will be dead. The Alberta Energy Utilities Board will no longer exist, replaced by the Alberta Utilities Commission and Energy Resources Conservation Board. This was necessary, but few seem happy.
Created in the early 1990s, the EUB was a body with extraordinary power over the Alberta economy and the lives of ordinary Albertans — almost a government, by default. To save money, the Klein regime merged the regulators governing electrical and fossil-fuel developments. That was when oil prices were a fraction of current levels and the oilsands were a money-losing curiosity with just two active players.
That, of course, changed. So did the electrical power market, which Klein substantially deregulated. But it wasn’t just the regulator’s workload that grew. So did the scope of what the EUB was being asked to decide.
Once oil shot past its old high-water mark of US$40 a barrel in 2004 (and aided by a royalty and tax-relief program instituted by the federal and provincial governments in 1997), investment started piling into the oilsands and other “unconventional” resources. More projects were planned than could be realistically built on time or even remotely close to budget. Still, the Klein government steered clear of an overall energy policy that might control the pace of development.
So the EUB became the primary public forum for dissent. Its hearings turned into passionate battlegrounds and the board itself became the arbiter of Alberta’s economic direction. In one bit of street theatre in 2006, country music legend Ian Tyson rode to the EUB’s headquarters in Calgary on horseback to deliver a petition on behalf of foothills ranchers like himself opposed to shallow gas drilling on sensitive wild grasslands.
Still, the results of the EUB’s determinations were typically project approvals, albeit with modifications here and there. To be fair, the board’s mandate was not to control the pace of development but to vet proposals within an appropriately narrow set of parameters.
More troubling was the misuse of the EUB’s power that came to light this past spring. Two private investigators hired by the board’s security unit were unmasked while spying on a meeting of landowners opposed to a high-voltage power line proposed by Altalink LP to deliver electricity from power plants west of Edmonton to power-hungry Calgary. This appeared to confirm the conspiracy theories of the energy industry’s critics: that the EUB was a kangaroo court in bed with the interests it was regulating. The rookie government of Ed Stelmach ordered a house-cleaning.
But Bill 46, which cleaved the regulator in two, was a hastily drafted document that angered the very interests it was meant to appease. Landowners and consumer groups were horrified at its “streamlining” provisions, which allow regulators to rule on applications without public hearings. Environmentalists derided what they saw as loosened safeguards. Moreover, the energy industry was outraged over penalties for violations far in excess of those in other jurisdictions — and applicable to company directors and officers. The Stelmach government was once again on the defensive, furiously applying patches to the law.
The creation of a dedicated electrical utilities commission — the focus of the conflict — shouldn’t be this hard. Unlike the oil and gas regulator, such bodies exist in almost every democratic jurisdiction.
The EUB is dead. But the ideal of accountable, transparent, fair and cost-effective regulation in Canada’s energy powerhouse remains elusive. IE
New energy scheme still troublesome
- By: Michael McCullough
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