Alberta taking steps to make electricity affordable, dropping Regulated Rate Option title

Like everything, the soaring cost of electricity has been hitting Albertans hard, but the province says relief could be on the way.

“It’s hard to believe that middle class families might struggle to afford household basics like heat and power, but that’s the situation for millions of Canadians in 2024,” Premier Danielle Smith said at the Alberta Legislature Thursday.

She adds the UCP are taking steps to make electricity more affordable and protect Albertans from future spikes in price.

They’re starting with tweaking the name of Alberta’s default rate, which Smith says is misleading.

“It makes it sound stable and predictable, when the truth is, it’s exactly the opposite,” she said. “The power rate swings wildly from month-to-month depending on the weather, and what’s going on in the world.”

Moving forward, the Regulated Rate Option (RRO) will be known as the Rate of Last Resort, and will be set every two years for each provider to ensure more certainty. The province says this will significantly reduce rates for Albertans who are unable to sign a competitive contract.

This includes people in rural Alberta who don’t have other provider options, as well people with bad credit and seniors.

“We will be renaming the Regulated Rate Option to the Rate of Last Resort,” Smith explained. “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.”

Smith says tens of thousands of Albertans have switched to more competitive rates, and she’s encouraging more people to follow suit.

Notley not impressed by UCP plan

Opposition leader Rachel Notley calls the move “a plan to make a plan,” and says low-income families won’t see immediate relief.

In a statement, the NDP leader blames the price spike on the UCP government’s decision a few years ago to eliminate the cap on electricity rates that her government had put in place.

“The UCP should not have taken the cap off before they had a plan to ensure utility prices wouldn’t spike,” reads Notley’s statement.

Last August, rates in Alberta reached record highs, with Calgarians the RRO paying 31.9 cents per kilowatt hour.

Minister of Affordability and Utilities Nathan Neudorf was directed to make a plan to address this issue as part of his mandate letter from the premier.

Earlier this month, the chief executive of the Alberta Electric System Operator (AESO) told an industry conference the UCP government is aiming to have new electricity market rules by 2027, and AESO is drafting designs for that.