Power problems: Why Alberta may ditch regulated-rate-option electricity as big bills loom
When it comes to paying for electricity in Alberta, people with little money and/or bad credit have little choice but to go on the regulated-rate-option (RRO).
As part of a plan to help Albertans deal with the rising cost of living, the UCP government says it will put a ceiling on that rate.
But an economist and the NDP are pointing out that their ceiling is more like a deferral.
Albertans have three options for buying electricity: The variable rate fluctuates based on market price, a fixed rate that's predetermined based on contract term and the RRO where the utilities commission sets the price.
Albertans who can't afford a deposit or have low-to-no credit are put on the RRO plan.
The UCP's minister of affordability and utilities says new legislation will help people on the RRO.
"Seniors, vulnerable Albertans, and rural Alberta, they can't handle the bill shock that they may be getting in January and February, so we wanted to provide them some stability," Matt Jones said.
Last March, the RRO was 10.7-cents-per kilowatt hour. It's since jumped up to more than 24 cents. It could reach up to 30 cents per kilowatt hour by March, experts predict.
Alberta is imposing a price ceiling for the RRO, so when the rate goes above 13-and-a-half cents per kilowatt hour, you'll only pay the 13-and-a-half cents, right now.
But any costs above that ceiling will be tacked on to future bills. In other words, instead of paying now, you'll be paying later.
"This program provides stability and manageable bills for customers on the RRO," Jones said.
Economist Blake Shaffer says while he likes the smoothing out of the bills, the province isn't considering which customers are on the RRO.
He believes people who can get off the RRO will do so before the deferred costs need to be paid up, leaving the most vulnerable to pay.
"I'll go get a fixed rate when prices are cheaper so I don't have to pay back that two, two-and-a-half cents for the next 21 months," he explained of how some may react.
"And if you continue that argument into the absurd element of one consumer left, you've got one person paying about $200 million on their bill."
Alberta's NDP called the UCP plan a payday-lending scheme.
"It's not a well-designed program. I think what people could potentially use right now is an actual rate cap or a real rebate or something of that nature," Energy Critic Kathleen Ganley said.
Jones said the province is now examining the future of the RRO and it could be eliminated altogether.
"The reason we're having that discussion is because we're seeing, not just historic prices but extreme volatility, and we know that this would be a complex undertaking to either reconfigure or transition off the RRO," Jones said.
"So, we are having preliminary discussions with RRO providers, with experts, and with Albertans."
CTVNews.ca Top Stories
From outer space? Sask. farmers baffled after discovering strange wreckage in field
A family of fifth generation farmers from Ituna, Sask. are trying to find answers after discovering several strange objects lying on their land.
Broadcaster and commentator Rex Murphy dead at 77: National Post
The National Post is reporting that Rex Murphy, the pundit and columnist who hosted a national call-in radio show for decades, has died.
Pearson gold heist suspect arrested after flying into Toronto from India
Another suspect is in custody in connection with the gold heist at Toronto Pearson International Airport last year, police say.
Millions of cyberattacks per hour as B.C. government investigates multiple breaches
Careful attention to government statements and legislation is required to get a handle on the level of risk British Columbians’ information is under, as investigators probe multiple breaches under a continued barrage of attacks.
Ontario family receives massive hospital bill as part of LTC law, refuses to pay
A southwestern Ontario woman has received an $8,400 bill from a hospital in Windsor, Ont., after she refused to put her mother in a nursing home she hated -- and she says she has no intention of paying it.
Debate on abortion rights erupts on Parliament Hill, Poilievre vows he won't legislate
A Conservative government led by Pierre Poilievre would not legislate on, nor use the notwithstanding clause, on abortion, his office says, as anti-abortion protesters gather on Parliament Hill.
Justin and Hailey Bieber are expecting their first child together
Hailey and Justin Bieber are going to be parents. The couple announced the news on Thursday on Instagram, both sharing a video that showcases Hailey Bieber's growing belly.
Here are the ultraprocessed foods you most need to avoid, according to a 30-year study
Studies have shown that ultraprocessed foods can have a detrimental impact on health. But 30 years of research show they don’t all have the same impact.
New 'Lord of the Rings' film coming in 2026
The Oscar-winning team behind the nearly US$6 billion blockbuster 'Lord of the Rings' and 'The Hobbit' trilogies is reuniting to produce two new films.