Rate of Last Resort (ROLR): How the Regulated Option Works in Alberta

The Regulated Rate Option in Alberta

Starting in 2001, customers gained access to retailer-provided electricity, thanks to the process of deregulation that began in 1996 with the passage of the Electric Utilities Act the previous year. In the past, businesses and residents were simply stuck with paying the going rate to whichever utility operated in their area. The passage of the EUA changed this. Customers gained the ability to choose their electricity retailer, based upon their personal preferences for price, price stability, service quality and other attributes. 

However, it made sense to provide a safety net, to make sure there was a baseline price in place for businesses and residents to fall back on in the case of high retail electricity rates, low credit scores, or other unanticipated problems. All areas of Alberta still have a designated energy provider for each geographic area that provides electricity at regulated rates. When someone chooses not to sign up with an electricity retailer, they automatically get their electricity from — and pay their bills to — that default utility company. Any business or residence that uses less than 250,000 kWh per year can choose to pay the regulated rate. 

In 2024, the Alberta government renamed this plan from RRO to Rate of Last Resort (ROLR). The reasoning behind the name change was to encourage consumers to explore competitive retail energy options and inform them that the regulated rate isn’t necessarily a safety net when rates are high. As of January 1st, 2025, all ROLR providers were required to remind customers of their energy rate options on their monthly bills.

How the ROLR Rates Are Determined

This regulated electricity rate is known as the ROLR or Rate of Last Resort. “Regulated” does not mean that the ROLR price is set by the government of Alberta. Instead, the ROLR rate is determined by an independent organization, the Alberta Utilities Commission (AUC), which functions independently from the government. The AUC’s mandate is to act impartially, treating both electricity suppliers and their customers fairly. The ROLR price set by the AUC is meant to fairly compensate energy providers while also ensuring that customers pay a fair and reasonable price. 

The AUC calculates the Rate of Last Resort based on the current market price of electricity in Alberta and how the price is expected to change. The ROLR is also based on global market conditions (which can be affected by weather, supply and demand, and a host of other factors) and the cost of transmitting electricity to various parts of the province. The ROLR is set and published by the AUC every two years on the first business day of December. For example, the Rate of Last Resort for the 2025-2026 term was announced on December 2nd, 2024, and became effective as of January 1st, 2025. Unique jurisdictions, like Medicine Hat, for example, maintained the ability to set their own prices under their own schedule.

Before the name change, RRO rates changed monthly.

RORL Providers

In Alberta, there are four RORL providers for electricity for residential and small business consumers. They are:

• Direct Energy Regulated Services
• ENMAX Energy
• EPCOR Energy (Edmonton)
• EPCOR Energy (surrounding Edmonton area)

To be eligible for the RORL, customers must be:

• A residential or farm and irrigation customer.
• Be a small business or commercial operation that uses less than 250,000 kWh of electricity per year.
• Be 16 years of age or older.

To sign up for the Rate of Last Resort, submit your name, phone number, mailing and/or legal address, and the date you require service to your chosen provider. As we noted earlier, customers who do not sign an energy contract with a competitive retailer are signed onto the ROLR by default.

Check out our page on Regulated Rate Providers in Alberta to learn more.

Predicting ROLR Prices

In 2006, the AUC started incorporating data on short-term projections into the RRO calculations. In 2010, the default rate became entirely based on price projections for the month ahead.

The consequence of recalculating the RRO on a month-to-month basis was that the price of electricity changed often, and sometimes by a great deal. This was good when sudden jumps in supply or decreases in demand quickly lowered electricity bills. However, market volatility can make it very difficult to plan out a budget. In May 2007, for instance, the RRO price of electricity for Direct Energy Regulated Services customers was 7.591¢/kWh. The price then rose for the next four months, reaching a peak of 11.673¢/kWh. This means that if a customer’s electricity bill was $100 in May, by September they were paying $153.77 for the exact same amount of electricity.

This increase may not have been dire for most residents of Alberta, but the RRO rate for businesses was nearly identical to that for residential customers. A business that used 200,000 kWh per year, if its usage was identical from month to month, would have gone from paying $1,283 in May, to $1,949.67. A change of a little less than $700 might not have affected many businesses, but for an owner who was running a tight budget, the sudden increase might have proved a bit problematic.

In 2022, RRO prices in the Edmonton region fluctuated from 10.702¢/kWh to 24.208¢/kWh, and from 9.971¢/kWh to 22.133¢/kWh in Calgary. In July 2023, the RRO rate reached 27.575¢/kWh in Calgary, a 73.07% increase from the previous year. The RRO rate in Edmonton hit 28.024¢/kWh in July 2023. This was an 85.6% increase from the previous year. The high RRO rates were attributed to high electricity usage and the deferred RRO repayment.

With the change from monthly set rates to two-year terms, ROLR prices could be more stable than in the 2010-2024 period, but not necessarily lower than the competitive energy options, be it fixed or floating rates. As of early 2025, the rate of last resort (ROLR) is higher than most of the fixed rates currently available in Alberta.

ROLR rates for 2025 and 2026

The following were the RRO prices for 2024:

* The table is updated with the latest RRO prices when the information becomes available

The following were the RRO prices for 2023:

These sorts of concerns are why the competitive retail electricity market exists today.

It may well be that staying with your default regulated supplier of electricity is the optimal solution for you, but there’s no reason not to investigate the competitive retail alternatives to paying the ROLR price for electricity or natural gas. Everyone has the right to choose the solution that suits them best.

Pros and Cons of the ROLR

One advantage of the RRO was that it did not lock customers into a fixed energy contract. Consumers were free to leave the plan at any time. In theory, a customer could sign up for the RRO when prices were low and leave the plan when prices were high. However, this became less of a unique feature over time, as most energy retailers in Alberta today let customers leave their plans without any penalties by giving 10 or 15 days’ notice.

Another advantage of the ROLR is that, because it is the default option, all consumers are eligible regardless of their credit score.

On the other hand, because it is a rate of last resort, prices may not always be the most advantageous, as the province sees it as a way of incentivizing competition and encouraging customers to leave the regulated option. So chances are high that Albertans can find more stable rates (like longer terms) at lower levels with fixed-rate energy providers, or lower floating rates if the market rate is low. This could put pressure on small businesses and low-income families if they are on a tight budget.