Achi news desk-
Alberta is introducing new legislation aimed at curbing electricity price increases.
Default electricity rates will be set for each provider every two years.
The province says this will significantly reduce rates for people who can’t sign a competitive contract, including people with bad credit, seniors, or people in rural Alberta who don’t have other provider options.
“Albertans should not be afraid to open their bill each month. Unpredictable power costs make it difficult for families to plan their household budgets, which makes it difficult to secure the future,” said Premier Danielle Smith to reporters on Thursday.
In addition to the new fixed rates, the Regulated Rate Option (RRO), which is provided to customers who cannot sign up to a competitive contract, will be renamed the Last Failed Rate.
The province says this will help consumers better understand the rate they are paying, and encourage them to find another option if they can.
“When Albertans go to sign up for their electricity, more often than not, they’re automatically enrolled in this option,” Smith said.
“But calling it a regulated rate option is misleading. It makes it sound fixed and predictable. When the truth is just the opposite. The power rate changes wildly from month to month month, depending on the weather and what’s going on in the world.”
Retailers will also be required to inform customers on the Regional Returning Officer about which scheme they are following.
“After a certain period of time, 90 days, if you sign up anew, or if you’re currently on it, they have to go back to every user and say, ‘Are you know what rate you are on? Do you Do you know what that means?
Neudorf said the changes would be implemented on January 1, 2025.
The province says around 29 per cent of residential customers are currently on the RRO, and 32 per cent of commercial customers and 46 per cent of farm customers also use the RRO.
According to the Alberta Utilities Commission, the current rate for electricity is about 15 cents/kWh as of April 18.
Last August, rates in Alberta reached record levels, with Edmonton RRO customers paying 32.5 cents per kilowatt hour and those in Calgary 31.9 cents per kilowatt hour.
Before the province lifted the cap on regulated rates as part of its Affordability Action Plan, the regulated rate was capped at 13.5 cents/kWh.
Alberta has a unique competitive market design for power, where electricity suppliers submit bids to the energy market known as the hourly power pool.
In March, Alberta announced new rules capping the bid price of natural gas generating units in hopes of eliminating the issue of “economic withholding,” where providers hold back supply to raise the price.
The changes were just the beginning of what could be a series of significant changes to Alberta’s electricity market.
Experts say the rules governing the province’s current system were designed when the majority of Alberta’s power needs came from coal and don’t necessarily work for a system now powered by natural gas and renewables.
There are currently over 50 price competitive retailers in Alberta.
With files from The Canadian Press
