Proposed legislation introduced this week would cap electricity prices and protect the pocketbooks of Albertans.
If passed, An Act to Cap Regulated Electricity Rates would ensure Alberta families, farms and small businesses on the Regulated Rate Option would not pay more than 6.8 cents per kilowatt hour over a four-year period from June 1, 2017 to May 31, 2021. The Regulated Rate Option is the default electricity contract for the vast majority of Alberta consumers.
“With this bill, we’re following through on the promise we made last fall to protect Albertans from electricity price spikes. Volatility and uncertainty have been hallmarks of our electricity system for years. Electricity is a basic necessity and Albertans shouldn’t have to worry about their power bills spiking from one month to the next. This cap would help make life more affordable by ensuring Albertans aren’t burdened with price volatility as we transition to a cleaner electricity grid and a more stable electricity market.”
While electricity rates are currently low, they have a history of being volatile. In the past six years, the Regulated Rate Option has:
- been as high as 15.3 cents per kilowatt hour and as low as 2.7 cents
- increased month-over-month by as much as 65 per cent, or $28 for the average residential bill
- depending on the month, resulted in the average residential consumer paying as little as $20 for their electricity or as high as $90
During the four-year period the rate cap would be in effect, consumers on the Regulated Rate Option would pay the lower of the market rate or the government’s rate of 6.8 cents per kilowatt hour. The government will work to keep rates below 6.8 cents through a variety of market and other tools, including the transition to a capacity electricity market. Should rates rise above 6.8 cents, the rate cap would be automatically applied to the bills of consumers on the regulated rate.
Full details about how the legislation would be implemented, including how payments would be made should rates exceed 6.8 cents per kilowatt hour, will be outlined in regulations.