Online petition over Alberta’s high utility rates exceeds 82,000 signatures

“Electricity rates in Alberta are at very high historic levels. Natural gas rates are at high levels but not historically high levels,” said Geoff Scotton, Senior Communications Advisor for the Alberta Utilities Commission (AUC).

“For example, the regulated rate option price for electricity in January and February was the highest it’s ever been. That reflects unprecedented demand for electricity.”

Energy consumers not on a contract will pay using a Regulated Rate Option (RRO), which fluctuates monthly. In Red Deer, small businesses or residential properties that use less than 250,000 kilowatt-hours (kWh) per year for electricity are supplied by Enmax Energy with monthly rates approved by city council which currently sit at 14.418-cents /kWh. For those that use more kWh and are not under a contract will be under Enmax’s Default Supplier Rate Schedule.

For the rest of Alberta, in Jan. 2021, the RRO of electricity for small businesses and residential homes using less than 250,000 kWh with Enmax was 7.981-cents. In Jan. 2022, it was 15.876-cents.

The RRO in Jan. 2021, including Red Deer, for natural gas using Direct Energy for small businesses and residential homes using less than 2,500 gigajoules (GJ) per year was 2.784-cents. In Jan. 2022, it rose to 3.893-cents.

Scotton described multiple factors affecting the significant increase. Along with supply and demand, the recent cold snap increased already higher than usual consumption. As well, taxes such as the carbon tax have added to overall bill prices.

However, residents like Jonasson claim that consumption rates are not the problem.

“We have changed everything we can to LED. Turn lights down, heating on low when we’re not at home or when we are asleep. The problem isn’t in the usage. We managed to get that number down. The issue is in the fees. Delivery fee, carbon fees, admin fees. Those keep rising,” she said.

She claims, while previously living in a two-bedroom apartment, she used to pay just $7 per month for electricity as she was rarely home. After the introduction of the carbon tax, her bill jumped gradually to $50 per month in delivery and administrative fees.

As those fees are set by either the federal government or energy provider, Scotton also explained another factor in rising costs: transmission and distribution.

Transmission charges cover the moving of electric energy from generating facilities, the first step in electricity production, to transformers through high-voltage transmission lines. Distribution charges cover the cost of moving the electric energy from transformers to local, lower-voltage lines to consumers.

According to the Utilities Consumer Advocate (UCA), transmission and distribution charges account for approximately 17 and 33 per cent respectively of one’s utility bill.

Jonasson also believes the rates began to increase when the Alberta Government removed the price cap program from RRO payers in late 2019.

This program was brought in by the NDP government in 2017 to reduce the risk of price fluctuations as the province was to transition from an energy-only market to a capacity market. With an energy-only market, generators are paid based on the fluctuating wholesale price of electricity. Capacity markets would have energy companies auction contracts to the government, where a newly appointed entity would choose the contract that best meets the needs of the province.

When the decision was cancelled to move to a capacity market, the price cap of 6.8-cents per kilowatt-hour for electricity was removed as well.

“Albertans are opening monthly electricity bills right now as high as two-to-three times what they were a year ago at this time,” said NDP Leader Rachel Notley. “This massive price surge comes as a direct result of decisions made by the UCP government.”

Notley said the UCP has been slow to support new technologies like energy storage that would reduce bills and should either reinstate the price cap, apply a temporary reverse rate rider, or implement an electricity rebate.

Alberta Energy says there are better solutions than the price cap, such as fixed-price contracts, equalized payment plans, or the floating regulated rate, which can be compared on the UCA website using a comparison tool.

“Unlike a program like a rate cap – which merely masks the cost of electricity and transfers the burden from ratepayers to taxpayers – these price protection options do not create unnecessary public debt,” said Associate Minister of Natural Gas and Electricity Dale Nally.

The provincial government also says the removal of lower-priced coal options affected supply.

“The energy-only market is responding with approximately 40 generation projects underway offering 4,000 MW of new supply to the grid in the coming months and years. This increase in supply can help bring costs down over time and is due to the investor-friendly environment encouraged by the energy-only market,” he said.

For Albertans like Jonasson, she thinks the government should either reintroduce the cap or offer a rebate for families.

“It just means we will really have to tighten the reins. We already avoid doing take out or delivery. All meals are made at home. I may have to find overnight work as my husbands schedule during the day, and the cost of childcare would cancel out me even working,” she said. “But that’s not an option for many families. Some don’t have credit they can access. They are living pay check to paycheck. I am fortunate because we will be okay. Other families won’t.”

The Alberta Government has stated in their budget they will be creating an energy rebate and consumer protection program but has not given a date or mentioned electricity rebate programs.

by Alessia Proietti

Online petition over Alberta’s high utility rates exceeds 82,000 signatures

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