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By Christian Oldale, Eli J. Ridder

UPDATED

New Alberta rules mandate set two-year rates by electricity providers to stabilize costs

Apr 18, 2024 | 1:37 PM

The Alberta government revealed Thursday that it will mandate each electricity provider set two-year default rates as a way to increase affordability, reduce volatility and increase market competition.

The province said the new regulations coming this spring will reduce spikes in prices for Albertans unable to sign a competitive contract.

That will help rural Albertans who may not have other options available, and those who have poor credit or other financial difficulties, officials said.

Nathan Neudorf, minister of affordability and utilities, said the regulations will protect communities from sudden rate spikes.

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“Utility bills can make or break a tight budget where every penny counts, which is why we’re protecting those with limited options from sudden spikes in electricity prices,” Nuedorf said.

“This will also make life more affordable for all Albertans as it puts downward pressure the price of utilities.”

The Alberta government intends to introduce legislation this spring to rename the default electricity rate to the Rate of Last Resort. It is currently named the Regulated Rate Option, which the province says misleads consumers into a false sense of protection.

They add that by changing the name to the Rate of Last Resort, consumers will be able to better understand the rate they are paying and encourage them to find the best option for them.

Medicine Hat since October 2023 has used a single best-of-market electricity rate for residential, farm, small and medium commercial, unmetered services and rental lighting customers.

The rate is not allowed to exceed 11 cents per kilowatt hour or dip below a minimum rate of seven cents.

The Medicine Hat Utilities Ratepayer Association, a resident advocacy organization, hailed the new rules as a positive development.

“This sounds like good news for more stable rates provincially,” association president Sounantha Boss told CHAT News on Thursday.

“If the citizens of Medicine hat did not raise our voices after last summer’s utility blowup, and as a result, Premier Danielle Smith stating the City of Medicine Hat was a ‘benchmark’ for utility rates, none of this would have come to fruition,” Boss added.

“This is democracy at work and this shows that normal citizens can make a difference to change policy to benefit the people.”

A City of Medicine Hat energy manager is scheduled to speak to CHAT News on Friday.