Alberta Government to Address Volatility, Cost of Regulated Rate Option

Alberta Premier Alison Redford has introduced a plan to help address, "both the volatility and costs associated with electricity," and to improve access to fixed-rate contracts.

Although Alberta's default service, the regulated rate option, has been based 100% on projected month-ahead market pricing since July 2010, recent price spikes (as high as 15 cents per kWh, Canadian) have prompted customer anger.

The Premier has ordered an independent panel review to regulated variable rate option to consider the ability to reduce volatility and costs. The Premier will also direct the Utilities Consumer Advocate to represent consumers' interests to the independent panel.

"The advocate's mandate in this process is to ensure the costs associated with electricity are just and reasonable for consumers," a news release from the Premier's office said.

In addition to a review of the variable rate, the government will ask the Alberta Utilities Commission to freeze ancillary costs included on Albertans' power bills including distribution, transmission, rider and administration charges until the completion of the review.

The release also said that the review will ensure more options for consumers who need them by having Service Alberta amend regulations affecting deposits for energy marketers and fixed-rate contracts.

"I understand volatile electricity prices are a hardship to many Albertans," said Premier Redford. "The regulated rate in March will be an estimated 8 cents resulting in significantly lower bills in the month of April; however, the promise of a lower regulated rate, which to consumers is really a variable rate, is not enough."