Premier Danielle Smith says her government will be introducing legislation and new regulations to give consumers more electricity rate options.
One of the changes will be allowing default electricity rates to be set every two years, which the government says aims to provide stability to the market.
“This will significantly reduce spikes in prices for Albertans unable to sign a competitive contract, including rural Albertans who may not have other options available, and those who have poor credit or other financial difficulties,” a government news release said.
The province will also be changing the name of the default electricity rate, which is currently dubbed the “regulated rate option” or RRO.
Ms. Smith said that more often than not when Albertans sign up for electricity service, they are automatically enrolled in this rate option.
“We think this will send the right message to Albertans that this is the rate to sign up for only when there are no other options available because everyone in our province could use some clarity and certainty about cost rate right now.”
She said the RRO term was misleading and legislation will be introduced this spring to change the name to “rate of last resort.”
“The rate of last resort will be set every two years for each provider so customers have far fewer price spikes and far more certainty about the cost that they'll have to pay,” Ms. Smith said.
Minister of Affordability and Utilities, Nathan Neudorf, said the changes aim to help people make the best available choice for electricity service.
“Knowledge is power, and Albertans need to know their options,” he said. “This will also make life more affordable for all Albertans as it puts downward pressure the price of utilities.”
According to government statistics, 29 percent of residential customers use the default electricity rate, while 32 percent of commercial customers and 46 percent of farmers purchase electricity through the default rate.
The province also plans to introduce new requirements for utility providers, including the need to contact customers within 90 days of purchase to ask if they’re looking to sign a competitive rate contract or stay with the default rate.
Utility companies will also need to offer information to customers about accessing the government’s Utilities Consumer Advocate resources.
In addition, providers will need to remind consumers of their rate options on monthly bills.
There are currently 50 competitive price retailers that provide fixed and variable rate contracts in Alberta, according to the release.
The changes were based on recommendations from the RRO Working Group, the government said.
Other Measures
The announcement was made weeks after the province said it would be adjusting electricity market rules to bring down costs by targeting the practice by power generators of withholding some energy from the grid in an effort to score a higher rate.Alberta allows electricity suppliers to submit offers into the energy market, called the power pool, every hour. The Alberta Electric System Operator dispatches the electricity, starting with the lowest price offers and moving higher until the power needs for that hour are met.
Some producers have been intentionally withholding some supply and offering it at a higher price, which can provide more revenue if the province’s power pool needs the extra supply.
The practice is not illegal but has been criticized by the provincial government, saying it has contributed to higher costs for consumers.
The new rules, announced in March, will limit the offer price of natural gas-generating units from large providers if net revenues are over a certain threshold.
