UPDATED: Alberta government introduces bill to make utilities more affordable

The Alberta government said it will be taking action to protect ratepayers by introducing legislation to lower and stabilize local access fees. By introducing legislation to reduce the cost of utility bills, the Alberta government said it will be following through on its commitment to make life more affordable for Albertans. This bill is in addition to the new short-term measures to prevent spikes in electricity prices and will ensure long-term affordability for Albertans’ basic household expenses. “Albertans need relief from high electricity costs and we can provide that relief by bringing in fairness on local access fees,” said Alberta Premier Danielle Smith in a Monday press release. “We will not allow municipalities — including the City of Calgary — to profit off of unpredictable spikes in electricity costs while families struggle to make ends meet.”Smith acknowledged the Alberta government “will protect Alberta families from the extreme swings of electricity costs by standardizing the calculations of local access fees across the province.”With local access fees, the Alberta government said they function as a regressive municipal tax people pay on their electricity bills. It added it is unacceptable for municipalities to be raking in hundreds of millions of dollars in surplus revenue off the backs of ratepayers and caused their utility bills to be unpredictable costs by tying their fees to a variable rate. Calgarians paid $240 in local access fees on average in 2023 compared to $75 on average in Edmonton because of Calgary’s formula relying on a variable rate. This led to $186 million more in fees being collected by the City of Calgary than expected. Alberta Affordability and Utilities Minister Nathan Neudorf said Albertans “deserve to have fair and predictable utility bills.”“Our government is listening to Albertans and taking action to address unaffordable fees on power bills,” said Neudorf. “By introducing this legislation, we are taking yet another step towards ensuring our electricity grid is affordable, reliable, and sustainable for generations to come.”To protect ratepayers, the Alberta government said it has introduced the Utilities Affordability Statutes Amendment Act (UASAA). If passed, it said the UASAA would promote long-term affordability and predictability for utility bills by prohibiting the use of variable rates when calculating municipalities’ local access fees. When municipalities use this rate to calculate their local access fees, it results in higher bills for Albertans and less certainty in families’ budgets. These proposed changes would standardize how municipal fees are calculated across Alberta and align with most municipalities’ current formulas. Utilities Consumer Advocate Executive Director Chris Hunt pointed out over the last few years, many people have been frustrated with volatile Regulated Rate Option (RRO) prices, which impacts their utility bills. “In some cases, these impacts were further amplified by local access fees that relied upon calculations that included those same volatile RRO prices,” said Hunt. “These proposed changes provide more clarity and stability for consumers, protecting them from volatility in electricity markets.”If passed, the UASAA would prevent municipalities from attempting to take advantage of ratepayers in the future. It would amend sections of the Electric Utilities Act and Gas Utilities Act to ensure the Alberta Utilities Commission has stronger regulatory oversight on how these fees are calculated and applied, ensuring ratepayers’ best interests are protected.If passed, it would amend sections of the Alberta Utilities Commission Act, the Electric Utilities Act, Government Organizations Act and the Regulated Rate Option Stability Act to replace the terms Regulated Rate Option, RRO, and Regulated Rate Provider with Rate of Last Resort (ROLR) and Rate of Last Resort Provider as applicable.Smith followed up by saying Calgary’s rate calculations have been on her radar since she was a lobbyist for the Canadian Federation of Independent Business in 2006. “We tried to get it changed at that time,” she said. “So it wasn’t just an oversight.” While the City of Calgary might deny this, she said it knew it was being charged this way. When it resulted in windfall revenues last year because of the RRO spike, it took the initiative to look at it because it was a problem.The Alberta government said on Thursday it would change the name of the RRO to the ROLR. READ MORE: Alberta government introduces 'Rate of Last Resort' to reduce electricity price spikes and add more certainty about future costsBy changing the RRO to ROLR, the Alberta government wanted people to understand this electricity rate should only be signed up for when no other options are available. “Because everyone in our province could use some clarity and certainty about costs right now,” said Smith.

UPDATED: Alberta government introduces bill to make utilities more affordable

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