Province to limit electricity rate increases for Albertans not on contracts

By Al Beeber - Lethbridge Herald on September 26, 2024.

LETHBRIDGE HERALDabeeber@lethbridgeherald.com

The province of Alberta starting on Jan. 1 will be protecting Albertans who must use what will now be called the “Rate of Last Resort” for electricity.

The province will be setting the ROLR every two years, that rate which will can only be changed by a maximum of 10 per cent between two-year terms.

Albertans who don’t – or can’t – sign a contract with one of 50 some energy providers in the province are automatically enrolled on what is currently known as the Regulated Rate Option. But in January, the province is changing the RRO officially to Rate of Last Resort which the government said in a release on Wednesday more accurately reflects the nature of the rate consumers are paying.

The province has also introduced a rate confirmation requirement which calls on the Utilities Consumer Advocate, working under the Minister of Affordability and Utilities – Lethbridge East MLA Nathan Neudorf – to contact customers on the ROLR every 90 days to confirm whether they want to stay on it and encourage them to explore options.

Because of poor credit or other factors some Albertans including seniors and members of the vulnerable population often can’t sign a competitive contract. And the province says in some rural areas, the ROLR may be a consumer’s only option.

But that rate presently varies monthly depending upon market prices and is approved by the Alberta Utilities Commission, rather than government.

“Through these new regulations, Alberta’s government is making the Rate of Last Resort more stable and predictable for Albertans unable to sign a competitive contract,” says the province.

According to Neudorf, “utility bills can make or break a tight budget when every nickel and dime counts. Our government is giving Albertans the tools needed to help save more their hard-earned dollars and make their monthly costs more predictable, while protecting the most vulnerable from sudden price spikes.”

When purchasing electricity and natural gas, Albertans have three options including a competitive contract for a variable rate, a competitive contract for a fixed rate of the ROLR. About 26 per cent of Alberta’s residential customers buy electricity through the ROLR, says the province. About 29 per cent of eligible commercial customers and 40 per cent of farm customers also buy power through the ROLR.

In the summer, the Alberta government initiated the Market Power Mitigation Regulation which is designed to prevent power price spikes for customers on variable rate contracts. The regulation is expected save Albertans more than $80 billion on their electricity prices over the next 10 years.

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