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Independent committee to review electricity retail market

Purpose, structure and delivery of the default rate will be discussed.

The Alberta government has appointed an independent committee to review the electricity retail market to help address the volatility and costs associated with the variable, or default, rate in Alberta’s competitive market.

“Albertans pay, on average, about the same for electricity as people in most other provinces,” said Ted Morton, Minister of Energy. “However, our prices do fluctuate from month-to-month for those who are not on a fixed-rate contract, and sometimes quite significantly. We recognize the volatility of the variable rate is a concern for many families, and it is a concern for government.”

As part of its review, the four-person committee will examine how the default rate is calculated and determine ways to mitigate price fluctuations. The committee will also review whether we need a default rate, and if needed, discuss ways it could be better designed and delivered. The committee will also look at the all-in cost of electricity, and consider how charges other than energy use are determined and approved for payment by consumers.

“The current system has been in place for more than a dozen years and has worked well,” said Morton.  “But like with any long-running program, we believe there is room for improvement, and we want to find it.”

The committee will be chaired by Ted Pound, current member and former chair of the Utilities Consumer Advocate Advisory Board, and will also include Dr. C.R. (Sid) Carlson, Rick Cowburn and Nat Treadway.

“Every family, business and industry in our province relies on electricity to meet their daily needs,” said Pound. “We will carefully consider each group’s concerns to ensure we are making the right recommendations for all Albertans.”

The committee members will consider expert advice from several regulating bodies, including the Alberta Utilities Commission (AUC) and the Market Surveillance Administrator (MSA). Electric distribution owners, electric retailers, and associations representing municipalities, power producers and consumers will be invited to present to the committee.

The Utilities Consumer Advocate (UCA) will represent consumers' interests to the committee including issues around pricing and procurement of electricity.  Individual consumers will also have an opportunity to provide input directly through an online survey, details of which will be made public in May.

Approximately 70 per cent of consumers pay the variable (default) rate, an indication that many Albertans are not comfortable signing a contract for their electricity usage. Currently, consumers who prefer stable electricity rates have the option of signing a contract with one of 11 service providers or requesting an equalized, monthly payment plan. Information on these companies is available on the Utilities Consumer Advocate’s website at www.ucahelps.alberta.ca.

The review is part of the four-point plan announced by Premier Alison Redford. Other measures include:

  • requesting the AUC to freeze ancillary costs included on Albertans' power bills including distribution, transmission, rider and administration charges  until the completion of the review;
  • amending a regulation affecting deposits for energy marketers and fixed-rate contracts to ensure more options are available for consumers who need them; and
  • supporting the AUC in its efforts on performance based rates, which will serve as an incentive for industry to find efficiencies with electricity distribution.

The committee will make recommendations to government by early summer of this year.

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Backgrounder: Retail market review committee members and responsibilities

Media inquiries may be directed to:

Bart Johnson
Director of Communications
Alberta Energy
780-427-0265

To call toll free within Alberta dial 310-0000.

Backgrounder

Retail market review committee members and responsibilities

Committee members

Ted Pound, Chair

Mr. Pound, former Chair of the Utilities Consumer Advocate (UCA) Advisory Board, continues to serve on the UCA Board. He is the owner of McArthur Fine Furniture in Calgary and the President of Sun Country Cablevision, operating cablevision and radio broadcast properties in British Columbia. Mr. Pound was a former partner with the Osborne Group, a Canadian national management consulting company. In addition to his executive management skills, Mr. Pound has over 26 years of media experience.

Dr. C. R. (Sid) Carlson

Dr. Carlson has been providing consulting service on energy and environmental policy issues since 2001. Prior to that, she provided economic analysis leading to the development of the Alberta Power Pool.  As an adjunct professor at the University of Alberta’s School of Business, she conducted research on energy and environmental issues and provided input on policy discussions via papers, lectures, and workshops. 

Rick Cowburn

Mr. Cowburn has over 25 years of experience in the electric and water industries. His experience includes serving on the ten member technical team that created Alberta’s competitive market design.
He has frequently appeared before the Alberta Utilities Commission on a broad range of matters, including forecasting, utility costs, depreciation, transmission need and rates, wholesale billing and settlement, cost allocation and rate design. In addition, Mr. Cowburn provides independent consulting services on a broad range of regulatory issues, including transmission tariffs, routing and forecasting.
He is currently the principal of Vidya Knowledge Systems Corp.

Nat Treadway

Nat Treadway is a founding member of Distributed Energy Financial Group LLC, a management consulting firm focused on aligning consumer behaviour and the business objectives of its clients with the future of energy and environment. From 1995 to 1999, he was a policy advisor with the Public Utility Commission of Texas and helped prepare biennial reports to the Texas Legislature on the Scope of Competition in Electric Markets in Texas.

Responsibilities of the Retail Market Review Committee

  • The committee will:
    • examine how the default rate is calculated and determine ways to mitigate price fluctuations;
    • review whether we need a default rate, and if needed, discuss ways it could be better designed and delivered; and,
    • look at the all-in cost of electricity, and consider how charges other than energy use are determined and approved for payment by consumers.

The committee is expected to submit a written report detailing the results of its review to the Minister of Energy by early summer.

Organizations that will be invited to present to the committee

  • Associations:
    • the Alberta Association of Municipal Districts and Counties,
    • the Alberta Chambers of Commerce
    • the Alberta Federation of Rural Electrification Associations,
    • the Alberta Urban Municipalities Association,
    • the Consumers’ Coalition of Alberta,
    • the Canadian Federation of Independent Business,
    • the Independent Power Producers Society of Alberta,
    • the Industrial Power Consumers Association of Alberta,
  • Electric distribution owners and their designated regulated rate provider:
    • ATCO Electric
    • City of Red Deer
    • City of Lethbridge
    • ENMAX Power
    • EPCOR Distribution
    • FortisAlberta
    • Municipality of Crowsnest Pass
    • Rural electrification associations (REAs)
    • Town of Ponoka
    • Town of Cardston
    • Town of Fort McLeod
  • Electric retailers in the Province of Alberta
  • Alberta Utilities Commission  (AUC)
  • Market Surveillance Administrator
  • Utilities Consumer Advocate (UCA)
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Media inquiries may be directed to:

Bart Johnson
Director of Communications
Alberta Energy
780-427-0265

To call toll free within Alberta dial 310-0000.