A cap on electricity prices has been introduced by the provincial government to protect families, farms and small business.
When fully implemented in June 2017, the government’s rate ceiling will ensure that Albertans pay no more than 6.8 cents per kilowatt hour, an available long-term contract rate for electricity over four years.“This rate ceiling, along with other electricity system reforms will ensure stable and affordable electricity prices going forward,” Premier Rachel Notley states in a government news release.
“Alberta’s economy is stabilizing and this government won’t put Alberta families, jobs or the economic gains we are beginning to see at risk in a volatile electricity market.”
While electricity prices are currently low, the current oversupply won’t last forever, she says.
During the period from June 2017 to June 2021 that the rate ceiling is in effect, consumers on the Regulated Rate Option (RRO) will pay the lower of the market rate or the government’s ceiling rate.
The rate ceiling will be automatically applied to the bills of consumers on the regulated rate.
Consumers may also choose to continue to take advantage of an offer from any private supplier they believe better suits their needs. Public consultation will start in December and be led by Energy Minister and Dunvegan – Central Peace – Notley MLA Margaret McCuaig-Boyd.
The government will consult with distributors, RRO providers, retailers and consumers.
Historically, regulated electricity rates have been extremely volatile – increasing by as much as 65 per cent (or 4.66 cents per kilowatt hour) in a single month (April 2011) and crashing by as much as 42 per cent (or 4.14 cents per kilowatt hour) in a single month (June 2014).
“Previous Alberta governments experimented with a risky and volatile form of electricity deregulation,” Notley says.
Further measures to address that ongoing volatility will include a series of reforms that will:
-Enhance Alberta’s market framework to create the conditions for private investment affordability, reliability and price stability; and
-Provide more detail on the phase-out of toxic emissions from burning coal by moving to a healthier mix of electricity generation sources.