11/28/2012 07:56 EST | Updated 01/28/2013 05:12 EST

Rural electric service accuses Fortis of causing static in upcoming merger vote

MEDICINE HAT, Alta. - An ad campaign by a southern Alberta electrical association accuses power provider Fortis Alberta of trying to “undermine rural Alberta growth” by casting doubt on a merger vote this week between two rural electrical co-ops.

The South Alta Rural Electrification Association provides distribution and retail power service for 2,700 rural homes, farms and irrigation projects in several areas of southern Alberta, including Cypress County near Medicine Hat and Redcliff, around Bow Island, Claresholm, Taber and Nanton.

On Thursday, its members will vote on whether to join forces with the Central Alberta REA — a move the group says will reduce costs and improve service.

Advertisements appeared in the 40 Mile (County) Commentator and the Medicine Hat News this week stating that Fortis is misrepresenting the merger and interfering in an internal matter.

Baynish Bassett, the general manager of the South Alta REA, says that Fortis mailouts characterize the deal as a desperate measure that will put members’ investment at risk, and that’s not the case.

Fortis Alberta spokeswoman Jennifer MacGowan said the company held drop-in sessions for REA members to speak with officials on Wednesday in Taber and Claresholm to give them information on different options.

“We simply want to ensure the members are making an informed decision,” said MacGowan. “We’re providing the option to operate their systems, and we have the capacity to make that happen.

“We would be operating the system at cost. Where we make our money as a company is on the infrastructure side, the investment in infrastructure and how that works over time.”

But Bassett says it's an internal REA affair and Fortis should not be sending out notices to its members.

“There have been radio ads and now people are telling us Fortis is going door to door.”

The biggest benefit of the merger, he said, is that the new 11,500-member REA would be able find internal financing for new construction and therefore offer members a better rate than Fortis can provide for building lines to new members.

A vote was scheduled for the Central Alberta REA in Innisfail on Wednesday night, and the southern REA will hold its meeting on Thursday afternoon in Lethbridge.

Bassett said that the impetus for the Fortis campaign is to try to convince REA members to contract out line maintenance and construction services to Fortis.

He says the issue boils down to Fortis, as a for-profit company, can’t offer the same return to co-op members.

The Fortis literature says that the company has taken over maintenance contracts for 15 of the 21 smaller REAs in Alberta — a rate that Bassett calls “alarming.”

“Increasingly the smaller REAs across the province are selling out to either ATCO or Fortis, depending which territory they are in,” said Bassett. “The bigger, stronger REAs aren’t selling out. And yet Fortis is encouraging us to go the other way.”

The South Alta REA operates in a block of southeastern Alberta that stretches from Bow Island to Redcliff and south to include Seven Persons and a large swath of the County of 40 Mile.

The association also operates north of Taber, near Claresholm and from Nanton to the Siksika Nation Reserve near Gleichen.

(Medicine Hat News)