Over the last six months, Alberta's electricity regulated rate option (RRO) has increased by 53%* due to changes in market conditions and global events. In the past, when the RRO was lower than fixed rate electricity plans, RRO customers like you saw significant savings by taking advantage of low market pricing during that time.
Remember when electricity prices hit a historic low of 2.9¢/kWh in May 2017? That was the best time to be on the RRO!
However, a lot has changed in the last two years, and we want to ensure that you understand your energy options to decide what’s right for you.
From supply chain issues to commodity shortages and higher production costs, consumers have been facing higher prices and bigger bills since the start of the pandemic. Unfortunately, electricity rates are no different as the cost of generating electricity has also hit all-time highs this year.
In November, the average RRO was 17.85¢/kWh (not including transmission and distribution charges), dropping only 4% from the previous month which was the highest it has ever been in the last 3 years. You can track the changes in the monthly regulated rate.
Why are electricity rates in Alberta higher than ever?
As Alberta phases out coal power by the end of 2023, natural gas is now our main fuel source for electricity generation. Natural gas prices worldwide have hit a 14-year high and increased by more than 200%, which has led to a higher cost of generating electricity.
During the hotter summer months and colder winter months, the increased energy demand and usage further drives up the price of electricity.
Based on current market information, our experts at Direct Energy Regulated Services expect electricity rates to remain high through the first quarter of 2023 and begin to taper off in the second quarter.
What is the difference between a regulated rate and fixed rate options?
In Alberta, you can choose a regulated or competitive retailer to energize your home or business.
The key differences between regulated and competitive energy services are the rates charged and the need for a contract.
Regulated rates are based on market prices and are reviewed and approved by the Alberta Utilities Commission (AUC) each month to ensure they are fair and accurate.
Customers can choose regulated rates without the need for a contract.
Competitive retailers offer stable fixed rate plans for various contract lengths such as 1, 3 or 5 years.
Competitive providers like our sister company, Direct Energy, can provide you with fixed prices with no early exit fees, bundled rates, green energy, and other promotions.**
What can I do to manage my energy bill and usage?
By switching to our Budget Payment Plan, you can spread out your energy costs throughout the year into equal monthly payments, making budgeting and planning easier. When you choose our Budget Payment Plan, we'll calculate your monthly payments based on the estimated cost of your energy consumption based on past usage and bills. Sign up for Budget Payment Plan.***
Bring down the energy charges on your bill by reducing your energy consumption and making your home more energy efficient. Increasing insulation, installing LED bulbs, switching to energy- efficient appliances, and using a smart thermostat are some of the best ways to lower your energy usage at home. Reducing your energy consumption will also help reduce the variable part of your distribution and transmission charges. Find more seasonal energy savings tips.
Here are some helpful articles that explain the different types of electricity plans available:
- What is the Difference Between Direct Energy and Direct Energy Regulated Services?
- How to Choose Your Natural Gas & Electricity Provider
*Based on the average monthly regulated rate option (RRO) for electricity by Enmax (Calgary), Epcor (Edmonton) and Direct Energy Regulated Services.
**Customers are free to purchase natural gas services or electricity services from a retailer of their choice. For a list of retailers, visit ucahelps.alberta.ca or call 310-4822 (toll free in Alberta).
***To qualify for our Budget Payment Plan, you must have received a minimum of three bills, and your account must be up to date.