Alberta Regulation 166/2024, known as the Regulated Rate Option Amendment Regulation revises the existing Regulated Rate Option Regulation (AR 262/2005) by introducing new terms, definitions, and requirements for electricity services under the Electric Utilities Act.

One of the key amendments is the title change from the Regulated Rate Option Regulation to the Rate of Last Resort Regulation, reflecting the aim to clarify the status and conditions of electricity service provisions. The regulation introduces several critical definitions, such as the Consumer Awareness Surcharge, which funds initiatives by the Utilities Consumer Advocate (UCA) to educate consumers about their electricity options. Additionally, an Energy Price Setting Plan is outlined to ensure that regulated rates are just and reflective of market conditions, and an MSA Determination Report will evaluate compliance with market requirements.

Electricity providers, or owners, are now required to submit applications for regulated rate tariffs that include an energy price setting plan, an MSA determination report, service terms and conditions, and billing information, promoting transparency and regulatory compliance. A new Rate of Last Resort features a two-year fixed rate structure, capping subsequent rate adjustments at a maximum of 10%, thereby providing stability for consumers. Furthermore, starting January 1, 2025, a consumer awareness surcharge of 0.1 cents per kilowatt-hour will support the UCA’s educational initiatives for regulated rate customers.

The Market Surveillance Administrator (MSA) will prepare biannual financial performance reports on electricity providers to assess their financial health and compliance with established standards. If providers fall outside acceptable parameters, the MSA can initiate a rate reopener proceeding to review and potentially adjust the regulated rate. This process allows regulatory authorities to reassess and modify rates in response to financial discrepancies, ensuring ongoing compliance with market conditions. Moreover, owners are required to share customer contact information with the UCA every two months to facilitate consumer education regarding their service options.

Transitional provisions ensure that applications for regulated rate tariffs submitted before the regulation’s enactment will be processed under the former regulations until December 31, 2024, facilitating a smooth transition and avoiding service disruption. The new regulations will take effect with the first Rate of Last Resort term beginning on January 1, 2025, ensuring that all regulated rates operate under the new structure, promoting consumer awareness and transparent, fair rate setting.

By establishing clear definitions, improving application processes, and promoting consumer awareness, the regulation aims to foster a more stable and informed electricity market. The focus on financial performance monitoring and the implementation of a two-year rate-setting cycle are essential strategies for ensuring fairness and efficiency in electricity service provision.

Alberta (166/2024) October 16, 2024