In the current electricity market, Alberta power consumers are vulnerable to sudden price spikes like we've seen and need to protect against in the future.
While electricity prices are currently at historic lows, the current oversupply won't last forever.
As Alberta’s economy continues to stabilize, we’re taking action to protect families, farms and businesses from electricity price volatility by implementing four-year ceiling on power prices.
The price ceiling, which comes into effect June 2017, will ensure that Albertans pay no more than 6.8 cents per kilowatt hour for electricity - the same as current long-term retail prices.
The price ceiling applies to the Regulated Rate Option (RRO) for electricity. From June 2017 to June 2021, consumers on the RRO plan (the majority of Albertans) will pay the market rate or the government's ceiling rate, whichever is lower.
Table 1: Regulated electricity rate volatility in Alberta
Average Regulated Rate Option: 2002-Present (C/KWH)
How it works
Regulated Rate Option providers cannot bill customers more than 6.8 cents per kilowatt hour for the electricity component of their bill. If the rate exceeds the ceiling, the government will pay the RRO provider the difference between the actual price and the ceiling.
If you’re an RRO customer, like the majority of Albertans, you don’t have to do anything. This price ceiling will be automatically applied to your bill.
The price ceiling applies only to the energy portion of a bill. Distribution and transmission charges are not covered by the ceiling. These charges will be examined as we move forward on improvements to Alberta’s electricity system.
The government will consult with distributors, RRO providers, retailers and consumers about how to best implement the price ceiling. More information on the consultation will be provided in the new year.