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By rdnewsNOW staff

Power Options

Alberta government introducing the “Rate of Last Resort”

Sep 29, 2024 | 12:16 PM

The provincial government has announced it is trying to help Albertans take control of their electricity options and protect ratepayers from power price spikes.

“Alberta has a unique competitive electricity market, which gives Albertans the power to choose the best energy provider, plan, and payment option to fit their needs,” explains Nathan Neudorf, Minister of Affordability and Utilities. “Consumers can purchase their power from over 50 competitive retailers, with the choice of either fixed or variable rate contracts.

“Albertans who don’t sign a competitive contract are automatically enrolled on the Rate of Last Resort from their local provider, which in the past has tended to be more expensive and volatile than competitive options.

“Alberta’s government is taking action to protect Alberta’s ratepayers and lower utility bills by helping consumers be better informed of their energy options.

“New regulations and legislation are set to come into effect on January 1, 2025, to help Albertans better understand their energy options and encourage them to find the rate best-suited to meet their needs.

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“Following the Utilities Affordability Statutes Amendment Act, 2024, the default electricity rate is being renamed from the Regulated Rate Option (RRO) to the Rate of Last Resort (ROLR). The name change better reflects the nature of the rate consumers are paying and is part of ongoing consumer awareness initiatives.

“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 of their hard-earned dollars and make their monthly costs more predictable, while protecting the most vulnerable from sudden price spikes.”

To ensure Albertans are better informed about their electricity rate options, Alberta’s government says it has also introduced a rate confirmation requirement. The Utilities Consumer Advocate, under the Ministry of Affordability and Utilities, will contact all customers on the Rate of Last Resort every 90 days to confirm whether they would like to stay on the Rate of Last Resort and encourage them to explore their options.

Rate of Last Resort providers will also be required to clearly indicate on customer bills that they are on the Rate of Last Resort, inform customers of their options in the competitive retail market, and update the terms and conditions of their service agreements.

“Alberta’s unique electricity market gives consumers choice in their energy providers and plans,” adds Chantelle de Jonge, parliamentary secretary, Affordability and Utilities. “These new regulations bring more clarity and stability to default electricity rates so that Albertans can choose with confidence.”

However, not all Albertans are able to sign a competitive contract, officials point out. In some rural areas, the Rate of Last Resort may be a consumer’s only option to receive power. According to the government, poor credit or other financial difficulties also may prohibit Albertans, often seniors and other vulnerable populations, from signing a competitive contract.

Currently, the Rate of Last Resort varies month-to-month based on market prices and is approved by the Alberta Utilities Commission, not the government, say provincial officials. To protect these customers from sudden and volatile price spikes, the government says the Rate of Last Resort will be set every two years and can only be changed by a maximum of 10 per cent between the 2-year terms starting January 1, 2025.

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

“The team at the Utilities Consumer Advocate is available to help consumers understand Alberta’s retail energy market, including these changes, and help them identify options that will work best for their household, farm, or small business,” says Chris Hunt, Utilities Consumer Advocate.

Albertans are encouraged to explore their options and find the competitive rate best-suited to their needs. Last year, according to the government, tens of thousands of households moved off the Rate of Last Resort to competitive contracts for a more affordable option.

Albertans looking for help with their utility bills or are experiencing a dispute with their provider should contact the Utilities Consumer Advocate at 310-4855 or through their website.

Alberta government quick facts

• Albertans have three options when purchasing their electricity and natural gas utilities: the Rate of Last Resort, a competitive contract for a variable rate, or a competitive contract for a fixed rate.
  • The Rate of Last Resort is approved by the Alberta Utilities Commission (AUC) and is not determined by the government. Learn more about the rate setting process and current rates on the AUC’s website.
• Approximately 26 per cent of residential customers purchase electricity through the Rate of Last Resort.
• Approximately 29 per cent of eligible commercial customers and 40 per cent of farm customers purchase electricity through the Rate of Last Resort.

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