Alberta Moves to Stabilize Retail Electricity Prices

The Alberta government has released the long-awaited Retail Market Review Committee report. In conjunction with the release of the report, the government has announced a number of measures aimed at stabilizing and controlling prices in the retail sector, primarily as it relates to the Regulated Rate Option (RRO).

The 397 page report was delivered to the government last September.

The government rejected six recommendations of the committee related to ending the RRO and requiring all retail consumers to sign fixed rate contracts.  The government noted that 65% of Alberta retail consumers have, to this point, chosen to stay on the RRO.  In order to further stabilize prices, the government will allow RRO providers to purchase electricity up to 120 days in advance, instead of the current 45 days.

The other changes include:

• The Utility Consumer Advocate will be reconfigured as an independent agency, instead of being an arm of Service Alberta.  It will also have its own expert governance board.
• The Alberta Utilities Commission has been asked to determine the best process for amortizing transmission lines (presumably hoping that the amortization period will be lengthened, reducing annual costs)
• Transmission facility owners will be required to provide cost information on transmission projects earlier in the permitting and construction process.  As well, if costs are challenged by consumers, the transmission facility owners will bear the burden of justifying those costs (instead of presuming the costs are reasonable and requiring the consumer to show that they are not
• The AUC has been asked to lift the current freeze on new distribution charges (but to phase in the implementation of deferred costs to reduce price shock)