Achi news desk-
The Alberta government is proposing measures, to take effect in January 2025, aimed at protecting power consumers from wild price swings.
Albertans have three options when purchasing their electricity and natural gas utilities: the default power rate – currently known as the Regulated Rate Option (RRO) – a competitive contract for a variable (floating) rate, or a competitive contract for a fixed rate .
Premier Danielle Smith says the RRO is misleadingly named because it can vary monthly according to weather and global events.
She says her United Conservative Party government plans to introduce legislation this spring to rename it the Final Failure Rate so consumers can better understand what they are signing up for.
Smith says her government also plans to set the Rate of Last Resort every two years for all providers so there is not as much volatility.
The government would also require providers to confirm with customers, within 90 days of providing their services, whether they want to sign up at a competitive rate or stick to the default.
It would also have providers share with customers how to access Utilities Consumer Advocate resources and remind them of their options on their monthly bills.
Alberta’s for-profit retail electricity market is home to over 50 power retailers that provide fixed and variable rate contracts.
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The province said tens of thousands of Albertans have moved off the default rate in 2023, and said those still on the rate should consider their options.
Previous updates to the electricity market rules
The province began unveiling changes last month in a series of significant changes to Alberta’s electricity market.
The rules governing the province’s current system were designed at a time when the majority of Alberta’s power needs came from coal, and they don’t necessarily work for a system now driven by natural gas and renewable energy.
In March, the province said it was updating its electricity market rules with new temporary measures it says will help lower consumers’ utility bills.
The new measures are aimed at the practice of “economic holdback,” a strategy routinely used by power producers in Alberta’s unique free-market electricity system to Canada.
Under Alberta’s competitive market plan, electricity suppliers submit bids to the energy market known as the power pool every hour. The Alberta Electric System Operator then dispatches the suppliers’ electricity, starting with the lowest price bids and moving higher until the province’s power needs for that hour are met.
Economic curtailment is when power producers deliberately hold back some of their supply, offering it at a higher price. It’s a gamble that can pay off if the operator needs that power, as the producer makes more money, but it backfires if the province’s power needs are met before it arrives the higher price offer.
The practice is not illegal, but has recently come under heavy criticism as one of the factors contributing to large increases in consumer power bills in the province, as well as an increasing number of incidents where prices power in the province has been higher during off-peak periods than during periods of peak demand.
– More to come…
& copy 2024 The Canadian Press
