Alberta Government pledges relief from soaring electricity prices with new legislation
Episode Stats
Words per Minute
155.12105
Summary
Learn English with Rachel Newdorf, Alberta s Minister of Energy and Water. Rachel Newforf announced a new policy that will make electricity more affordable for many Albertans, including seniors, the poor, and others on fixed income.
Transcript
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Living in Canada has gotten very expensive lately. The housing crisis, the federal carbon tax,
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and a dollar that's worth less and less because Ottawa is running the money printers non-stop.
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All these factors have made life less affordable across the country.
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For places as rich as Canada, it's hard to believe that middle-class families might struggle to
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afford household basics like heat and power, but that's the situation for millions of Canadians
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in 2024. Keeping life affordable for Albertans is one of our government's top priorities,
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and that includes the price of electricity. Minister Newdorf has been working hard to bring
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power costs down, and today I'm happy to announce our first steps to return to a time of affordable
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electricity and give Albertans clarity and certainty on their power options. The default power rate
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in our province is called the regulated rate option, and when Albertans go to sign up for
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their electricity, more often than not, they're automatically enrolled in this option.
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The rate adjusts every month based on what's happening with electricity prices, and that means
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price volatility and price spikes. Since the regulated rate option is the standard rate for households who
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aren't signed up with a competitive power retailer, a significant percentage of Alberta families,
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businesses, and farm operations get their electricity this way.
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But calling it the regulated rate option is misleading. It makes it sound stable and predictable,
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when the truth is it is exactly the opposite. The power rate swings wildly from month to month,
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depending on the weather and what's going on in the world. It can be relatively affordable during one
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part of the year and then crushingly expensive in another. Albertans should not dread opening their bill
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each month. Unpredictable power costs make it hard for families to plan their household budgets.
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That makes it hard to have certainty for the future. And it doesn't help matters that the most volatile
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option sounds like the best one and is the default option. For the last year, we've been encouraging
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Albertans to get off the regulated rate option and choose a more affordable and stable rate.
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And tens of thousands of Albertans have switched so far. But we recognize that the regulated rate option
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still sounds confusingly appealing. It sounds like a sensible choice in uncertain times. So to make
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things absolutely and perfectly clear, we will be renaming the regulated rate option to the rate of last
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resort. We think this will send the right message to Albertans that this is the rate to sign up for
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only when there are no other options available. Because everyone in our province could use some clarity and
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certainty about cost rate about right now. So a name change, of course, is one thing, but a name change in itself
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doesn't get us to where we need to be. That's why we're also making changes to the rate itself. The rate of last
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resort will be set every two years for each provider. So customers have far fewer price spikes, and far
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more certainty about the cost that they'll have to pay. For example, in 2023, the average price of the
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regulated rate option was $0.22 per kilowatt hour due to spikes in electricity. However, if we had had this
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new policy in place, the market surveillance administrator estimated the average price would
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have been half as expensive at $0.11 per kilowatt hour. When we consider only the electricity cost of your
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monthly bill, that would mean that this new policy would have cut those costs in half. The Alberta
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Utilities Commission estimates that over the course of a year, the average Alberta household uses 600
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kilowatt hours of electricity per month. With the numbers from the market surveillance administrator that
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I just cited, our new policy would have resulted in average electricity costs being $66 per month,
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instead of $132 per month. That's about $792 in savings per year. In addition, anyone who signs on to the
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rate of last resort will be able to choose a different competitive rate plan at any time. This will
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essentially become the price to beat. We'll also be requiring power providers to inform customers
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exactly what rate they're on, and to advise them that they can leave for a competitive rate at any
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time they choose. We simply can't allow confusion about electricity billing to cause Albertan's
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financial hardship. We're only a few months removed from both bitterly cold temperatures of minus 30 and
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below, or blistering hot temperatures of 30 degrees and higher. These temperatures regularly create
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spikes in demand, which result in spikes in electricity rates and in consumer bills. And they hurt the most
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financially vulnerable among us, including seniors and others on fixed income. Those with poor credit,
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who could not get onto a fixed rate, renters, and others with difficult financial situations. But that's going
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to change, and as we continue our work to make power more affordable to Albertan's.