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The Alberta Utilities Commission recently turned down an application filed by the Central Alberta Rural Electrification Association , in which the electricity provider was seeking to become the primary service provider in some rural areas.

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Status quo for rural electricity customers

Rural residents around Airdrie will still have a choice of which utilities provider they use after a recent decision by the Alberta Utilities Commission.

The Alberta Utilities Commission (AUC) turned down an application filed by the Central Alberta Rural Electrification Association (CAREA) seeking clarification on which company is the primary electrical service provider in an area that spans from north of Airdrie to Westlock, located about 85 kilometres north of Edmonton.

CAREA has customers in Rocky View’s rural communities near Beiseker, Irricana, Crossfield and Airdrie.

Rural Albertans generally get their electricity from public utility companies FortisAlberta or ATCO Electric. However, rural electrification associations (REAs), such as CAREA, provide electricity to some rural residents.

Because portions of CAREA’s service area overlap with Fortis’, the company filed the application to the AUC on Sept. 30, 2010.

The application requested the AUC issue a declaration that “entitles CAREA to serve any person in the CAREA service area wishing to obtain electricity for use on property,” restricts FortisAlberta to provide electricity “in the CAREA service area only to a consumer in that service area who is not being provided service by CAREA.”

“In essence, CAREA seeks a declaration that it is the monopoly service provider within its approved geographic service area,” stated the AUC report, which was released on July 4 after the decision to turn down the application.

CAREA is the largest self-operating REA in the province. The company, originated from the amalgamation of 14 smaller REAs between 1992 and 2005. In 2011, CAREA had more than 8,300 members and covered a territory of 8,300 kilometres spanning 16 counties.

Following AUC’s decision, FortisAlberta issued a press release stating the decision confirms it is the primary electricity distribution service provider within CAREA’s service territory. The release went on to state the AUC found, as a publicly regulated utility, FortisAlberta’s obligation to serve customers clearly distinguished it from the self-regulated REAs.

“The AUC’s decision brings clarity for customers within our service territory, particularly for those customers in overlapping areas,” said Karl Smith, president and CEO of FortisAlberta in the release.

“It reinforces for customers that FortisAlberta is the primary electricity distribution service provider and that the REA is entitled to serve only those eligible consumers who voluntarily accept membership in the REA.”

“We are pleased with this decision because is reaffirms for us our role of the primary service provider,” said FortisAlberta’s Director of Corporate Communications Jennifer MacGowan. “This decision is about servicing customers with safe and reliable electricity. (A different decision) would definitely impact our ability to serve customers.”

The CAREA has a different take on the decision.

In a press release, CAREA Chairman Jim Towle expressed his disappointment in what he calls FortisAlberta’s misrepresentation of the AUC decision.

“Obviously this is one more example of an arrogant giant utility company, accustomed to bullying rural based competition, using their own interpretation to mislead the public,” said Towle.

Towle said the CAREA will continue operations as usual and is seeking legal advice to determine if the decision should be appealed to the courts.

“The fact that REAs operate a transparent business model delivering electricity at cost to rural Albertans and setting a benchmark for the actual cost of that electricity delivery in the province seems to go unrecognized,” he said. “CAREA is, and will continue to be, the first choice rural electricity distributor within our service area and will offer at-cost services to rural Albertans.”

Towle added he hopes the Province isn’t intending to “hand over a protected area to a giant utility company.”

For more information on the decision, visit AUC’s website at www.auc.ab.ca