The Government of Alberta has introduced the Rate of Last Resort (RoLR) as the new default electricity option, replacing the Regulated Rate Option (RRO) starting in January 2025.

 

These changes apply only to regulated electricity rates, with no impact on regulated natural gas.

 

Curious about what this means for you? Here’s everything you need to know about the changes and how they could affect your electricity rates.

 

What is the Rate of Last Resort (RoLR)?

Starting January 1, 2025, the Regulated Rate Option (RRO) has been replaced with the Rate of Last Resort (RoLR), a fixed-rate electricity plan designed to offer stability and predictability. The RoLR is automatically applied to customers who have not selected a competitive energy retailer.

 

Approved by the Alberta Utilities Commission (AUC), the RoLR rate will vary by location, therefore depending on your location, your RoLR rate may be set at $0.1201/kWh, $0.1202/kWh, or $0.1206/kWh from January 1, 2025, to December 31, 2026.

 

Why was the Regulated Rate Option (RRO) replaced with the Rate of Last Resort (RoLR)?

The Alberta government introduced the Rate of Last Resort (RoLR) to provide customers with a clearer understanding of the default electricity option. This change encourages Albertans to explore competitive energy plans that may better suit their needs, such as fixed-rate options.

 

How is the Rate of Last Resort different from the RRO?

The Rate of Last Resort (RoLR) is designed to provide more stability than the RRO. Unlike the RRO, which fluctuated monthly based on market conditions, the RoLR is fixed for two years. This means your rate won’t change unexpectedly during this period. At the end of each two-year term, the rate can only increase or decrease by up to 10%, ensuring gradual adjustments for customers.

 

Who qualifies for the Rate of Last Resort (RoLR)?

If your household or business consumes less than 250,000 kWh of electricity annually, you are eligible for the Rate of Last Resort. For context, the average household uses approximately 7,600 kWh per year. If you haven’t chosen a competitive electricity retailer and your usage falls within this range, you’ll automatically be enrolled in the RoLR plan.

 

What’s the Difference Between the Rate of Last Resort Fixed Rate and a Competitive Fixed Rate Plan?

Starting January 1, 2025, Alberta’s Regulated Rate Option (RRO) has been replaced with the Rate of Last Resort (RoLR) as the default electricity rate for customers who have not selected a competitive energy plan. Unlike the RRO, the RoLR offers a fixed rate set every two years.

 

Here’s how the RoLR fixed rate compares to competitive fixed rate plans:

1. Rate Determination

• RoLR Fixed Rate: A regulated rate approved by the Alberta Utilities Commission (AUC) every two years. The rate can only increase or decrease by a maximum of 10% at the end of each term.

• Competitive Fixed Rate Plans: Rates are set by individual retailers based on market conditions and business strategies, offering flexibility in term lengths and pricing.

2. Flexibility and Choice

• RoLR Fixed Rate: Automatically applied to customers without a competitive energy plan. It offers no customization options.

• Competitive Fixed Rate Plans: Customers can choose term lengths, rates, and features like green energy options, as well as enjoy promotions and incentives.

3. Pricing Stability

• Both options provide price stability. However, competitive fixed rate plans allow you to choose the term length that aligns with your budget and preferences.

4. Additional Fees

• RoLR Fixed Rate: Includes a $0.01 per kWh surcharge to support the Utilities Consumer Advocate (UCA), which helps keep you informed about your electricity choices.

• Competitive Fixed Rate Plans: Additional fees depend on the retailer and plan selected.

 

How Do I Know If I’m on the Rate of Last Resort?

Check your electricity bill. If you see charges from Direct Energy Regulated Services, EPCOR Rate of Last Resort, or ENMAX Rate of Last Resort, you’re on the RoLR plan.

 

Was I Automatically Switched from the RRO to the Rate of Last Resort?

Yes, if you were on the RRO and didn’t take any action, you were automatically switched to the RoLR on January 1, 2025.

 

I’m on the Rate of Last Resort. Do I Have Other Options?

Absolutely! You can switch to a competitive fixed-rate plan that offers:

• No exit fees (depending on the plan you choose).

• Combined billing options.

 

Explore your options with ACE today!

• Visit PROGRAMS & RATES | ACE Energy on our website to see what we offer.

• Chat with a live representative through our LIVE CHAT feature for personalized assistance at Alberta Co-operative Energy (ACE Energy).

• Prefer to talk? Give us a call at 1-888-865-8750, and we’ll help you find the best plan for your needs.

 

We’re here to make energy choices easy for you!

 

Need Help Choosing a Retailer?

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).

 

Is the Rate of Last Resort for Both Electricity and Gas?

No, the Rate of Last Resort (RoLR) applies only to regulated electricity. Regulated (Default Rate Tariff) natural gas rates are not affected by this change.

 

While both electricity and natural gas rates are reviewed and approved by the Alberta Utilities Commission (AUC), they are set independently and influenced by different market factors. For example, natural gas prices have remained lower compared to electricity rates over the past two years.

 

Will My Regulated Natural Gas Rate Be Affected?

No, if you’re on a Default Rate Tariff for natural gas, you have the option to stay on the Default Rate Tariff, choose a variable rate plan or a fixed rate plan.

 

What Are the Benefits of a Fixed-Rate Plan?

A fixed-rate plan offers:

• Price stability: Protect yourself from market price spikes.

• Flexibility: No enrollment or exit fees (depending on the plan you choose), and you can switch plans if rates drop (although there may be a fee if you currently have a rate plan with exit fees).

• Financial peace of mind: Know the rate per kWh you’ll pay each month, making it easier to budget.

 

Explore Your Options

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).

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