Albertans to repay energy bill rebate: Report

It was meant to help Albertans struggling to make ends meet — the UCP government put a temporary cap on electricity for customers who are on the regulated rate option (RRO).

That’s now coming to an end on April 1, and customers will have to pay back any energy usage beyond that 13.5 cents per kilowatt hour cap.

This has some across the province calling the UCP government’s gap on the RRO a “trap.”

“That will actually have to be paid back over time. It wasn’t a forgiveness thing,” said Lianne Redmond, director of Encor by EPCOR.

According to a report by the School of Public Policy at the University of Calgary, it will now leave them out on the cold, as the $200 million will have to be paid by those “on the rate.”

But a loophole means Albertans who change from RRO to a fixed rate can avoid paying the deferral.

“And this is a big concern,” explained Joel MacDonald, founder of EnergyRates.ca.

Nearly half of Edmonton homes are on the RRO. It’s estimated each household will have to pay back $220 over a 21-month period. However, the more people who opt out of the regulated rate option, the higher the cost will be for those who remain on it.

“What if half of those people leave? Now, those who remain on the RRO, instead of paying $220 per person, they will be paying $440 per person,” said McDonald.

An assistant professor at the University of Calgary, Sarah Hastings-Simon, says to make matters worse, there are limitations on who can leave the RRO.

“That requires a certain level of credit or security deposit which is simply unaffordable for some Albertans,” Hastings-Simon said.

While the deferral program was intended to protect Albertans from high power bills, Hastings-Simon worried it’ll hurt many still suffering.

“It is set up to be paid back over the next year and a half through to December 2024. But the challenge really is that it will be paid back through the regulated rate,” she explained.

“Those who are least able to afford it, are on the hook to pay that cap. And the more people that end up leaving the regulated rate, the larger the monthly charge for those remain will get.

“And so for those people that stay on the regular rate, they’re paying that loan back, but of course people have the option to leave the regulated rate, in which case they’re leaving that bill behind.”

Hastings-Simon says one thing the government could do to fix this is to step up and pay the bill.

Stability Regulation in place

In a statement, the UCP tells CityNews there are regulations in place to make sure the repayment is recovered fairly over the 21 months.

“Families, farms, and small businesses on the Regulated Rate Option (RRO) are being protected from high electricity bills this winter as part of the Affordability Action Plan,” reads the statement.

“Roughly 700,000-800,000 consumers on the RRO will not be charged more than 13.5 cents per kilowatt hour in January, February, and March of 2023. Deferred electricity costs will be recovered over a 21 month period, from April 2023 to December 2024, to ensure that electricity costs remain stable and affordable for Albertans.

“To ensure that this protection could be provided at no interest to Albertans, the government extended no-interest loans to RRO providers as part of this program. While exact figures are not yet finalized, the Regulated Rate Option Stability Regulation requires all repayment plans to first be approved by the AUC or the MSA to ensure that repayments are recovered fairly and consistently over the 21 months.”

Albertans have also benefitted from an additional $200 in electricity rebates in 2023 including $75 rebates in January and February and $25 rebates in March and April. This brings the total electricity rebates provided to 1.9 million homes, farms and small businesses to up to $500 since July, 2022.”

The NDP criticized the energy rebate in a statement in December 2022, saying electricity prices are expected to reach a record high in January.

“New figures released Thursday estimate the Regulated Rate Option (RRO) will be between 26-29 cents per-kilowatt-hour in January.” read the statement.

“Albertans are already struggling during the affordability crisis,” said NDP Energy Critic Kathleen Ganley.

The NDP also said this program will make people pay higher prices next summer.

— With files from Laura Krause and Lisa Grant