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.

Price cap

As Alberta’s economy continues to stabilize, we’re taking action to protect families, farms and businesses from electricity price volatility by implementing a four-year cap on power prices.

This price cap will ensure Albertans pay no more than 6.8 cents per kilowatt hour for electricity - the same as current long-term retail prices.

The price cap applies to the Regulated Rate Option (RRO) for electricity. From June 1, 2017 to May 31, 2021, consumers on the RRO plan (the majority of Albertans) will pay the market rate or the government's cap rate, whichever is lower.
 

Table 1: Regulated electricity rate volatility in Alberta

Average Regulated Rate Option: 2002-Present (C/KWH)

A graph shows the month-to-month electricity rate spikes and crashes between Jan 2002 and Sept 2016 between 3.5 cents and 15 cents. The graph also shows the new rate cap at 6.8 cents per kilowatt hour.

 

Historically, regulated electricity rates have been extremely volatile – increasing by as much as 65% (or 4.66 cents/kwh) in a single month (April 2011) and crashing by as much as 42% (or 4.14 cents/kwh) in a single month (June 2014).

 

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 cap, the government will pay the RRO provider the difference between the actual price and the cap.

If you’re an RRO customer, like the majority of Albertans, you don’t have to do anything. This price cap will be automatically applied to your bill.

The price cap applies only to the energy portion of a bill. Distribution and transmission charges are not covered by the cap. These charges will be examined as we move forward on improvements to Alberta’s electricity system.

News

Taking action to protect electricity consumers (May 23, 2017)