A new Calgary report on the surging cost of energy names the “aggressive price” on carbon emissions as one factor driving up the prices of electricity and natural gas prices for Albertans. 

The report, an Industry Update on Electricity, Natural Gas, and Telecommunications, was submitted to Calgary’s Apr. 27 Community Development Committee by the City’s Chief Financial Officer.

According to the update, the electricity regulated rate option price hasn’t been this high in nearly 16 years. 

“In 2022 February, the ENMAX residential regulated rate option price (16.52 cents per kilowatt-hour) was at its highest level since the provincial government restructured the regulated rate option in 2006,” the report explained. 

Higher electricity prices in Alberta were driven by “a more aggressive price for carbon,” “increased demand,” and “higher generator offer prices” among other factors. 

In Alberta, the vast majority (91%) of electricity people use is produced from fossil fuels. Alberta was among several provinces that had to submit to a federal carbon tax beginning in 2019. On Apr. 1, the carbon tax saw a scheduled increase by 25% to $50 per tonne. 

Executive Director of Operations for the Canadian Energy Centre Mike Simpson told True North that multiple policies affecting the development of energy projects, along with a lack of market access for pipelines, is also a contributing factor.

“When implemented policies create a shortage of supply, costs of the product will go up,” explained Simpson. “The burden on natural gas consuming Canadians has been steadily increasing for many years.” 

“While natural gas prices are increasing, there are other costs in regards to electricity such as distribution and transmission charges, balancing pool allocations, rate riders and other fees that make up the final bill,” 

Along with the cost of electricity, the price of natural gas has also climbed due to various factors including increased export. 

“Natural gas prices in Alberta have climbed as geopolitical issues in Europe have helped fuel commodity inflation across the globe. Closer to home, below-average inventories and elevated liquefied natural gas export demand have also placed upward pressure on natural gas prices,” wrote staff. 

According to Simpson, Canada is not producing resources fast enough to meet the global demand, and the federal regulatory system could be to blame. 

“Canada is not developing its resources fast enough. But this should not surprise anyone when you have an open ended federal regulatory system that requires companies to risk billions upfront with no guarantees and political interference within,” Simpson told True North. 

“The global marketplace needs our responsibly developed resources, because if not us, the world will get oil and gas from some of the worst players – Qatar, Russia, Iran, Saudi Arabia, and Venezuela to name a few. This should be unacceptable to all Canadians when we stand for the equality of human rights for our global neighbours.”

Last year Prime Minister Justin Trudeau revealed that he wanted to force the oil and gas sector to cut emissions by 40% – a plan which Alberta Premier Jason Kenney blasted as “unrealistic.” 

“Their approach seems to be, well it’s totally unrealistic, and their approach, if they were to actually achieve their targets without using these transition technologies, would be devastating to the entire global economy,” said Kenney in November. 

As reported by True North, the Trudeau government also recently went after the agriculture sector, which it has tasked with reducing emissions from fertilizers by 30%. In a recent report by Agriculture Canada, the Liberals labeled Canadian grain growers as the worst “emissions intensity” offenders in the world. 

Industry leaders including President of the Western Canadian Wheat Growers Gunter Jochum have hit back at the federal government’s assertions. 

“I would like to know where they got their facts from,” Jochum told True North. “I believe those facts were entirely made up because in Canada we don’t even have a baseline as to what the true emissions are.”

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