Did Alberta overbuild its energy infrastructure? This critic thinks so, and it affects what you pay

The increasing fees on your utility bill are covering billions of dollars invested to upgrade the electricity grid over the past decade, and some question whether that was needed.

Fees charged to Calgary residents for electrical transmission and distribution more than doubled since 2010 — when Alberta embarked on a decade of upgrades.  

Consumer advocate Jim Wachowich says that's because it's overbuilt.

Wachowich is a lawyer for the independent Consumers' Coalition of Alberta, which argues on behalf of regular Albertans when companies pitch new projects and customer fees to the Alberta Utilities Commission (AUC).

He's been doing that job for almost 30 years, and says in his view, Alberta made predictions on energy demand that never panned out. So it built more than it had to. 

"Alberta went from a low-cost jurisdiction with a reliable but old system to a high-cost jurisdiction with a very new, very costly and hopefully very reliable system — but we really won't know," he said.

Power companies spent $13.5 billion in last 20 years upgrading the transmission network of large power lines and related infrastructure across the province, according to the Alberta Electric Systems Operator (AESO). That includes projects quite contentious when first proposed — the twin, 500-megawatt Western Alberta Transmission Line and Eastern Alberta Transmission Line each cost nearly $2 billion.

Both the former Enmax chief executive and Calgary's mayor of the day, Dave Bronconnier, warned these projects would pass on high costs to consumers. Now, more than a decade later, high fees are a common gripe among customers.

Other investments were made to upgrade natural gas infrastructure and power lines within municipalities. Alberta's system is set up so that companies can claim back all the construction and maintenance costs through charging fees to consumers.

Wachowich says many actors in the system have an interest in building more capacity, perhaps more than Albertans need.

For the power line companies, large capital projects create work and look good on the balance sheet. And for the electrical generators in the system — the large coal and natural gas plants — they prefer a grid with more capacity, an uncongested system where they can add power at any time. 

Alberta tried to control those interests by setting up the Alberta Utilities Commission and a provincially appointed consumer advocate. But Wachowich says he doesn't believe that's working as well as it could. 

"We lost some of the checks and balances that we thought were there," he said. "We tended to, over the last 20 years or so, overbuild the transmission system. It's overbuilt and arguably underutilized."

Back in 2009, the electricity system co-ordinators predicted Alberta's demand would take off. When that's compared to actual demand, it shows a very different picture. Wachowich shows that graph to the commission when arguing for a more conservative approach.