The Regulated Rate Option (RRO) in Alberta is a default electricity pricing plan available to residential, farm, irrigation, and small commercial customers who consume less than 250,000 kilowatt hours per year.
It’s designed as a safety net to ensure all Albertans have access to electricity at regulated rates, which fluctuate monthly based on market prices.
Key Aspects of the RRO
- Calculation and Eligibility: Before July 1, 2010, the RRO was calculated using a mix of short and long-term market prices. Now, it’s based entirely on the next month’s projected market price of electricity. This change aims to reflect more accurately the current market conditions in the electricity rates.
- Rate Cap Measures: The Government of Alberta has implemented temporary measures, such as rate caps, to protect consumers from sudden spikes in electricity prices during peak demand periods. For instance, customers won’t be charged more than 13.5¢/kWh during certain months, although this is a deferral, meaning the difference will be paid back over future months.
- Options Beyond the RRO: Albertans are not bound to the RRO and have the freedom to choose from various competitive retail electricity plans. These plans may offer more stability and predictability in rates, potentially leading to savings and better budget management for energy costs.
Understanding the RRO’s Impact
The RRO’s monthly variability reflects the dynamic nature of the energy market, influenced by factors like global market conditions, supply and demand, and the cost of transmission.
While it offers a default option for electricity consumers, the fluctuating rates highlight the importance of understanding one’s energy plan and considering alternatives that might better suit individual needs and preferences.
FAQs on RRO in Alberta
Who is eligible for the RRO?
Residential, farm, irrigation, and small commercial customers using less than 250,000 kilowatt hours per year.
How is the RRO rate determined?
As of July 1, 2010, it’s based on the projected market price for electricity for the upcoming month.
Can I choose a different electricity plan?
Yes, Albertans have the option to select from various competitive retail electricity plans, which might offer more favourable terms compared to the RRO.
In Summary
- The RRO is Alberta’s default electricity rate plan, designed as a safety net for consumers.
- Rates under the RRO fluctuate monthly, based on projected market prices.
- Albertans have the freedom to choose alternative retail electricity plans, potentially offering more stable and predictable rates.
Further Information
- Alberta Government’s RRO Fact Sheet: Offers a comprehensive overview of the RRO, including its calculation, eligibility, and impact on consumers. RRO Fact Sheet.
- ATCO’s Blog on the RRO: Provides insights into the RRO, including recent government measures like rate caps and the benefits of choosing a competitive retailer. All About the RRO.
- Alberta Utilities Commission (AUC) on RRO: Discusses the regulatory body’s role in determining the RRO rates and ensuring fair pricing for consumers. AUC and the RRO.
