Alberta Considering Reform of Regulated Electricity Pricing Option

About 37% of Alberta electricity utility customers pay list price.

The Alberta government has launched an evaluation of the regulated electricity pricing option, commonly referred to as RRO, the base rate model tied to the list price that sometimes causes the monthly bill to jump by inhabitants of the province.

The RRO is the default pricing method for any Albertan who does not want to sign a contract with a supplier in order to obtain a fixed price or who cannot sign such a contract because of certain constraints, for example a bad rating. credit.

In December, the price of electricity for this model exceeded 20 cents per kilowatt hour and peaked even higher at the start of the year. The provincial government stepped in to ensure Albertans don't pay more than 13.5 cents per kilowatt-hour by forcing suppliers to defer billing the excess, meaning customers will still have to pay the difference later.

By comparison, the residential rate in British Columbia is 9.5 cents per kilowatt hour for the average equivalent of the first 22 kilowatt hours consumed daily and 14.08 cents for the subsequent ones. In Quebec, the residential rate is 6.319 cents per kilowatt hour for the average equivalent of the first 40 kilowatt hours per day and 9.749 cents for the following ones.

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According to Assistant Professor of Economics Blake Shaffer of the University of Calgary, the reassessment of this pricing model is not surprising given the highs that current prices have reached in recent months, but it remains to be seen why this model would be replaced if challenged.

If we get rid of RRO, what will be the default pricing mode and will it be reasonable? he asks.

In a statement, the province confirms that the regulated pricing option is being evaluated and that the Ministry of Affordability and Utilities is working with various stakeholders to find ways to give Albertans more affordable and stable rates.

Ministry spokesperson Andrea Farmer, however, notes that no decision has been made. has been taken regarding the future of the RRO. According to the province's latest figures, 37% of utility customers in Alberta receive an electricity bill under this rate model, while the remaining 63% of customers have a rate contract.

With information from Paula Duhatschek