Is The Yoke On You?

By: Darren Chu

RRO prices are up for October.

For reference, in October 2021, the RRO price for electricity was 10.6 cents per kWh. This October, RRO prices have peaked at 19.5 cents per kWh - the highest RRO rates ever charged to consumers! This means that a homeowner consuming 750 kWh per month will pay an extra $57 this October compared to last year for the exact same amount of electricity.

The solution is easy, head over to SpotPower.net and switch to a lower rate. For seniors, the rate is discounted to 9.15 cents per kWh. 19.5 cents vs 9.15 cents. The choice is yours.

Helping Alberta’s Energy Consumers Prepare for Winter

Regulated Rate Option (RRO) providers’ (ENMAX, EPCOR, and Direct) October rates have increased to the 19 cents per kWh range, the highest prices in the history of Alberta’s RRO. Over the last decade, the average October RRO price paid by consumers was 7 cents per kWh. The rate increase between September and October is almost 20%. If you crunch the numbers, it’s no joke.

Last winter, many Albertans experienced price spikes for electricity and natural gas due to seasonal and market factors. As a result, the government is compensating consumers with almost $600 million in rebates. This program provides $300 to more than 1.9 million homes, farms, and small businesses by rebating $50 per month for six months.

But rebates aren’t the only solution. Albertans wishing to protect themselves from price volatility can also enter into a competitive guaranteed-rate contract with any of the 50+ retailers in Alberta.

Nate Glubish, Minister of Service Alberta, advises “Albertans looking for ways they can save money on their electricity should check out the UCA as the best place to go for tips and advice on energy choices to find the right plan for their family. The UCA’s website, ucahelps.alberta.ca, contains tips and information on energy choices.”

Dale Nally, Associate Minister of Natural Gas and Electricity added, “Right now, the default regulated electricity and natural gas rates are more expensive than those offered through fixed-rate contracts. Combined with energy rebates from Alberta’s government, a fixed-rate contract, and smart energy use can help keep bills lower for Albertans. We’re doing the long-term work to tackle the root cause of high energy costs – but in the short term, competitive retail products can shield you from high energy prices.”

Consumers on the variable rate or RRO should seriously consider switching to a lower guaranteed fixed rate. We urge all customers to check out the Utility Consumer’s Advocate website.

Affordable Options are Available

In Alberta, energy consumers can purchase electricity and natural gas on fixed-rate contracts from a competitive retailer or choose the Regulated Rate Option (RRO) for electricity and a default plan for natural gas. Competitive retail contracts are easy to enter and easy to cancel should regulated rates drop below contract rates in the future. Albertans who choose fixed-rate contracts will still be eligible for the electricity and natural gas rebates.

Quick facts

  • In 2001, under a Ministerial Order, the RRO was set at 11 cents per kWh. The rate fell slightly during the subsequent years and bounced back to 10 cents per kWh in 2011. 
  • The average RRO price in 2020 was 7 cents per kWh. It increased to 9 cents in 2021, and today is 18 cents. The highest average price in the history of Alberta’s deregulated market. 
  • Roughly 40% of Alberta’s residential power and natural gas customers use the RRO for electricity and default rates for natural gas. The remainder are on fixed and variable rate contracts. 
  • 3-year guaranteed prices for seniors in the province can be obtained from Spot Power at 9.15 cents per kWh. Compared to the RRO, which is 18 cents, the average homeowner will save more than a further $50 per month in addition to the $50 rebate from the government.
  • Current fixed contract rates today are lower (or about the same) than what consumers were paying for electricity during the period from 2006 to 2013. During that time frame, most people were paying between 9 to 10 cents per kWh – which are the same rates being charged by Spot Power today. 
  • Looking back at the history of the RRO: The 10-month average RRO price in 2022 is now at 14 cents per kWh (October’s average price increased to 18 cents). New generation facilities were added to the Alberta fleet, which resulted in a drop in prices during the period 2014 to 2018. Over the course of the NDP’s time in government, they put in motion the closure of coal plants and the subsidized cap on RRO rates for the benefit of only 40% of consumers on the RRO. It was known that the closure of plants would result in a supply shortage; subsequently, power prices increased. 
  • 60% of consumers in the province are not suffering from high rates and are signed up for lower rates, in addition to the $50 monthly rebate. 
  • All Energy Marketers under the UTILITYnet umbrella offer significant savings to consumers in their local community. Shop local and save money each day.
Back