Alberta Government Unveils Plan to Combat Electricity Price Spikes with New Legislation and Regulations

by MorinvilleNews.com Staff

The Government of Alberta says it will combat electricity price spikes by introducing legislation and new regulations to reduce volatility and increase competition in the electricity market. The government plans to set default electricity rates for each provider every two years, a move the UCP say will “significantly reduce spikes in prices” for Albertans unable to sign a competitive contract.

“Albertans should not dread opening their bill each month. Unpredictable power costs make it hard for families to plan their household budgets and we simply cannot allow confusion about electricity billing to cause Albertans financial hardship,” said Premier Danielle Smith in a media release Thursday. “We promised we would address rising unaffordability in utility bills and we’re taking the first steps to do just that, with more to come.”

The previous NDP government had capped the kilowatt per hour price at 6.8 cents, a move overturned by the UCP government in November of 2019.

The current government is taking a different approach, stating the default electricity rate’s name, Regulated Rate Option (RRO), is misleading as the term ‘regulated’ is confusing to consumers, giving them a “false sense of protection” that rates are government protected. The province plans to rename the default electricity rate to the Rate of Last Resort through legislation so consumers better understand the rate they are paying. The government believes this will encourage Albertans to find their best option.

“Knowledge is power, and Albertans need to know their options. Utility bills can make or break a tight budget where every penny counts, which is why we’re protecting those with limited options from sudden spikes in electricity prices,” said Minister of Affordability and Utilities Nathan Neudorf in the same release. “This will also make life more affordable for all Albertans as it puts downward pressure the price of utilities.”

Albertans who are not on a competitive rate contract automatically pay the default electricity rate through their local provider. New legislation and regulations will require providers to confirm with their customers whether they’re choosing to sign a competitive rate contract or stay on the default electricity rate within 90 days of service sign-up.

In Alberta, electricity consumers have three options: default RRO, competitive contracts for variable rates, or competitive contracts for fixed rates.

NDP Leader Rachel Notley said the proposal was “no more than a plan to make a plan” and that Alberta’s most vulnerable low-income families won’t see immediate relief.

“Danielle Smith and the UCP made a decision to abandon families when they eliminated the cap on electricity rates. This caused utility prices to explode. Now, Alberta has the highest utility rates in the country,” Notley said. “There was nothing in today’s announcement to protect Albertans this summer from the record-breaking rate spikes like we saw last year. The UCP should not have taken the cap off before they had a plan to ensure utility prices wouldn’t spike.”