Alberta regulated electricity rates going up
Posted July 5, 2022 5:36 pm.
Your electricity rates may start to go up again as utility providers are increasing their regulated rate option (RRO) to around 15 cent per kWh.
RRO is available for electricity users who use fewer than 250,000 kWh/year and want to be on a plan where prices have to be approved by government.
Enmax was given approval to increase its RRO to 14.777¢ per kWh, while Epcor is increasing its RRO to 14.916¢ per kWh.
“It definitely indicates that the Alberta Utilities commission is seeing that the prices are already higher than anticipated, so they’re having to make some real-time adjustments to match what’s already happening,” explained Kristen van de Biezenbos, Associate Professor of law at the University of Calgary.
“I don’t think that there’s a lot of good news in the immediate future when it comes to electricity prices.”
To put the price increases into perspective, if you were paying last month’s Enmax regulated rate of 11.84¢ per kWh, on the assumed average of 600 kWh used in the month, you would’ve been charged around $70 not including riders or admin fees.
However, this month, your bill would be closer to $90 under those same parameters.
“Regular Albertans are having a really tough time right now — we’ve been seeing that for months and months going back to even the beginning of the pandemic — and I think even if it is a few dollars here and there on bills that people are falling further and further behind,” said Bradley Lafortune, Executive Director of Public Interest Alberta.
“When it comes to electricity, prices are out of control, they’re through the roof, and people who are paying their bills have been saying to government for weeks and weeks now, we need to see real action.”
Van de Biezenbos’ advice is to not stick with an RRO and try to shop around for the lowest fixed rate you can get.
“The difference between opting for that fixed rate with Enmax versus the RRO or the floating rate has become [quite large], there’s really no reason not to choose the fixed right now,” she said.
In statements to CityNews, both Epcor and Enmax explained higher prices are anticipated for electricity across the province through the summer, and an RRO fluctuates with the market price of electricity.
“The market price that is forecasted for the summer months is due to market forces beyond a single energy provider,” read a statement from Enmax. “We generally see higher prices in summer due to increased demand. This summer, there are additional influences including supply-side factors and increases in the cost of natural gas (which is used to generate most of the electricity in Alberta).”
“If you are an RRO customer, the rate you pay for electricity changes from month to month based on the costs to purchase energy from the market,” Epcor added in a statement. “We typically see increases in price when usage/demand is predicted to be up – for example, hot days in the summer and cold days in the winter. EPCOR does not own generation. EPCOR – as a local wires company (EPCOR in Edmonton) delivers the energy from the provincial power grid to homes and businesses.”
Economist Moshe Lander says if you don’t want to get off the RRO, then the only way to save money with that plan is to reduce your electricity usage.
He explains global events are also playing a massive part to this increase, as Russia’s invasion of Ukraine continues.
“Alberta is reaping the benefit from the one end on the production side, but it’s reaping the cost from the consumer side in that we’re paying higher prices,” Lander said.
“So, these types of Alberta advantages that the government always touts are usually when oil prices are high, we mean the Alberta advantage is for the producers, not for the consumers. When oil prices are low and we talk about how Alberta is suffering, it’s the producers who are suffering but not the consumers.”
In a statement to CityNews, Associate Minister of Electricity and Natural Gas Dale Nally’s office explains RROs are generally higher in the summer due to higher consumption.
It also took the opportunity to take a shot at the carbon tax, as it always does when asked about electricity or fuel prices.
“High utility bills are being seen across Canada and globally right now, which is impacting many Albertans. This issue is due to many factors including rising natural gas prices worldwide, but has been compounded by policies like the NDP’s hasty coal phase-out, and the federal carbon tax,” Nally said.
“I want to emphasize that consumers do have options to shield themselves from the volatility of the variable RRO, including competitive fixed price contracts. The $50 electricity rebates will apply to fixed rate contracts as well. We encourage anyone interested in a fixed rate contract or other plan to contact the UCA and find out what plan works for them.”