It’s a chicken and egg situation for the UCP government on electricity regulations.On Monday, Alberta Premier Danielle Smith surprised no one by invoking the Sovereignty Act in response to Ottawa’s continued constitutional overreach on electricity regulations.After all, she’d basically been promising to pull the trigger for months, ever since she was crowned UCP leader last fall. The Sovereignty Act was the first order of business before she called last spring’s general election. No surprise it would finally be dragged out into the light of dawn days ahead of the United Nations’ climate confab in Dubai this week..After all, what’s the point of having a chamber full of silver bullets if you’re not prepared to use it? And yes, she admitted as much in a press briefing with reporters on Monday morning that a good part of the purpose of invoking it was to send a strong, highly symbolic message that "enough is enough."But make no mistake, the Sovereignty Act isn’t a silver bullet. It’s more like a Sword of Damocles. That’s because of what that actually entails — specifically with respect to electricity — is the creation of a new Alberta-owned electric utility. It’s almost 1978 all over again, when former premier Peter Lougheed went on a shopping spree of setting up Crown corporations to achieve Alberta’s economic goals, including — but not restricted to — its own airline..Although Lougheed — ‘Citizen Pete’ — remains a revered figure in Conservative circles, his direct approach to intervention in the economy is not..Although Lougheed — ‘Citizen Pete’ — remains a revered figure in Conservative circles, his direct approach to intervention in the economy is not. "Being in the business of business" was thoroughly debunked by his successor, Ralph Klein who sold off nearly all of Lougheed’s pet enterprises, starting with the electric company in the down and dirty crash of the early 1990s.Much of it was ideologically driven. Free markets, blah blah. Most of it was purely practical — Alberta couldn’t afford to invest and maintain a properly operating system while it was drowning in debt, jeopardizing the reliability of the system. Then, as now.The end result was that Alberta has had the only deregulated power market in the country for nearly two decades. And it’s served fairly well, until it hits this particular wall..Ralph used to tell a joke about what happens when you get stuck in ‘Castor.’.That’s because Smith has essentially been powerless to do anything about Ottawa’s ‘clean energy' assault on the power grid. And that extends not just to the idea of regulating natural gas plants, but the free-for-all taking shape in the hills with a blitz of renewable energy projects in the unlikeliest of places. Hairy Hills. Vulcan. Ralph used to tell a joke about what happens when you get stuck in ‘Castor.’But that’s where the ‘renewable revolution’ is happening. On private land. Basically to eat up emissions credits than to provide any real energy security for Albertans. In other words, a fake boom.What’s a freewheeling, free enterprise premier to do? Why, start her own electric company. Why? To fight fire with fire.Because it’s the only way to provide the base load backstop power that’s needed to support it all. It’s a recipe for disaster that’s been played out in California, Germany, Ontario — even Texas — and if left unchecked, will almost certainly happen here. It almost has, 10 times since last winter..Compare to provinces such as Saskatchewan that can defer any headlong rush with its own SaskPower monopoly. In that regard, Smith has her hands tied. The only way a 'free market' can work in Alberta under the circumstances is to guarantee that base load gets built.Smith took pains to stress Alberta wasn’t “nationalizing” the power grid — any more than the Alberta Treasury Branches seek to monopolize the banking sector.But it is absolutely essential if it is to direct the ebb and flow of power in the region as a sort of traffic cop, without fear of blackouts or brownouts in January. More important, the threat of prosecution for doing so..Forget about an emissions cap for now, because that is indeed coming. It’s likely to result in a second, and likely even more consequential, can of worms. And a second Sovereignty Act challenge.So now Alberta "reluctantly finds itself back in the power business," in the words of Premier Smith. Because she really didn’t have much other choice. And that’s what the Sovereignty Act is really all about — the power to control the market. Without re-regulating the whole thing. The ultimate contradiction in terms.
It’s a chicken and egg situation for the UCP government on electricity regulations.On Monday, Alberta Premier Danielle Smith surprised no one by invoking the Sovereignty Act in response to Ottawa’s continued constitutional overreach on electricity regulations.After all, she’d basically been promising to pull the trigger for months, ever since she was crowned UCP leader last fall. The Sovereignty Act was the first order of business before she called last spring’s general election. No surprise it would finally be dragged out into the light of dawn days ahead of the United Nations’ climate confab in Dubai this week..After all, what’s the point of having a chamber full of silver bullets if you’re not prepared to use it? And yes, she admitted as much in a press briefing with reporters on Monday morning that a good part of the purpose of invoking it was to send a strong, highly symbolic message that "enough is enough."But make no mistake, the Sovereignty Act isn’t a silver bullet. It’s more like a Sword of Damocles. That’s because of what that actually entails — specifically with respect to electricity — is the creation of a new Alberta-owned electric utility. It’s almost 1978 all over again, when former premier Peter Lougheed went on a shopping spree of setting up Crown corporations to achieve Alberta’s economic goals, including — but not restricted to — its own airline..Although Lougheed — ‘Citizen Pete’ — remains a revered figure in Conservative circles, his direct approach to intervention in the economy is not..Although Lougheed — ‘Citizen Pete’ — remains a revered figure in Conservative circles, his direct approach to intervention in the economy is not. "Being in the business of business" was thoroughly debunked by his successor, Ralph Klein who sold off nearly all of Lougheed’s pet enterprises, starting with the electric company in the down and dirty crash of the early 1990s.Much of it was ideologically driven. Free markets, blah blah. Most of it was purely practical — Alberta couldn’t afford to invest and maintain a properly operating system while it was drowning in debt, jeopardizing the reliability of the system. Then, as now.The end result was that Alberta has had the only deregulated power market in the country for nearly two decades. And it’s served fairly well, until it hits this particular wall..Ralph used to tell a joke about what happens when you get stuck in ‘Castor.’.That’s because Smith has essentially been powerless to do anything about Ottawa’s ‘clean energy' assault on the power grid. And that extends not just to the idea of regulating natural gas plants, but the free-for-all taking shape in the hills with a blitz of renewable energy projects in the unlikeliest of places. Hairy Hills. Vulcan. Ralph used to tell a joke about what happens when you get stuck in ‘Castor.’But that’s where the ‘renewable revolution’ is happening. On private land. Basically to eat up emissions credits than to provide any real energy security for Albertans. In other words, a fake boom.What’s a freewheeling, free enterprise premier to do? Why, start her own electric company. Why? To fight fire with fire.Because it’s the only way to provide the base load backstop power that’s needed to support it all. It’s a recipe for disaster that’s been played out in California, Germany, Ontario — even Texas — and if left unchecked, will almost certainly happen here. It almost has, 10 times since last winter..Compare to provinces such as Saskatchewan that can defer any headlong rush with its own SaskPower monopoly. In that regard, Smith has her hands tied. The only way a 'free market' can work in Alberta under the circumstances is to guarantee that base load gets built.Smith took pains to stress Alberta wasn’t “nationalizing” the power grid — any more than the Alberta Treasury Branches seek to monopolize the banking sector.But it is absolutely essential if it is to direct the ebb and flow of power in the region as a sort of traffic cop, without fear of blackouts or brownouts in January. More important, the threat of prosecution for doing so..Forget about an emissions cap for now, because that is indeed coming. It’s likely to result in a second, and likely even more consequential, can of worms. And a second Sovereignty Act challenge.So now Alberta "reluctantly finds itself back in the power business," in the words of Premier Smith. Because she really didn’t have much other choice. And that’s what the Sovereignty Act is really all about — the power to control the market. Without re-regulating the whole thing. The ultimate contradiction in terms.
