The Alberta electricity and natural gas markets are the least regulated in Canada. But do consumers get the most they can out of the deregulated energy market and its many options? After more than 20 years of deregulation in the province, many people still don’t know that they have other options beyond the default energy provider.
As of 2017, around 40% of Albertans had chosen their electricity providers. Although these are quite impressive numbers, it seems that many consumers still don’t know how to enjoy the perks of the Alberta deregulated electricity market. If you’re one of them, below you can find a quick guide to understanding the deregulation of power and natural gas, as well as some of its pros for consumers.
Once you know how the deregulated market works, you will have higher chances of signing with the best electricity providers and securing the cheapest energy rates for your home or business.
A guide to understanding Alberta’s deregulated electricity market
The Alberta electricity market went deregulated in 1996 after the Electric Utilities Act. Since then, there is a power pool in Alberta managed by the Alberta Electric System Operator (AESO). With the deregulation of energy, a market was created in the province, in which rates are set by hourly prices.
For Albertans, that means they can buy electricity and natural gas at competitive prices from almost any energy retailer in the province. The main idea behind it was to provide consumers with more choices, so they can feel free to switch energy providers or search for better utility deals.
Some services, however, are still regulated by the province, including transmission and distribution.
The deregulation process made it easier for consumers to find the ideal energy plans in Alberta, as they can be much more customized to your reality, especially if you’re a large consumer of electricity. At the same time, all of the Alberta electricity provider options can make people quite confused regarding their residential or commercial energy rates.
That’s why questions like “Which energy provider is the best in my area?” or “How do I find the cheapest energy rates in my region?” became each time more frequent among Albertans since the deregulation. The freedom to choose is convenient for your energy costs — and complicated if you don’t know where to find the best energy providers, plans and rates.
But don’t worry if you don’t know how to shop for energy in Alberta; you can find below some useful resources to guide you in that process.
Competitive rates: How to get the most out of the deregulated energy market
The rate of last resort (ROLR),formerly the regulated-rate option or RRO, is the default option for many consumers in Alberta, but that doesn’t mean this is the most cost-effective deal for people. Most retailers offer better electricity rates than the last resort option. Additionally, within 90 days of providing services, providers of the last resort option will be required to confirm with their customers whether they’re choosing to sign a competitive rate contract or stay on the ROLR. Still, there are some things you need to know before you sign up for new natural gas and electricity plans.
Most deregulated energy providers offer two main options: fixed-rate and variable-rate plans. Knowing what to do about it depends on several factors, including current market trends, climate conditions, your financial goals and even the historical prices of natural gas and electricity. Read on to find out the main differences between fixed and floating electricity rates.
Variable energy rates (floating): Variable rates can provide you with cheap energy rates when they’re low, but can also surprise you with high energy bills when you’re least expecting it. Such electricity and natural gas rates are based on current market prices, which makes them far unpredictable and risky. After all, anything can affect energy rates, from political decisions to natural disasters. These plans are advantageous for consumers who want to save as much as they can, even if that means going through the risk of cost uncertainty.
Fixed energy rates: Fixed rates provide homeowners and businesses with predictability. These energy plans are ideal for people who value cost certainty and don’t like to face fluctuating prices. With a fixed-rate plan, you will be less vulnerable to market changes, as your energy rates won’t change regardless of what happens in the market. Such plans will let you know what to expect from your bills at the end of each month and enable you to have a more predictable budget.
Electricity and natural gas: Compare energy providers in Alberta
Now that you know a little bit more about the Alberta electricity market and its energy options, EnergyRates.ca can be a convenient tool for you to compare in one place all the best available natural gas and electricity rates in Alberta. This unbiased price comparison website lists all the major retailers in the province and their rates according to your postal code, so users can compare energy providers and secure the best deals in their areas.
As to large consumers of electricity and gas, such as businesses and commercial facilities, they can get a free custom quote based on their energy usage by filling in the form above or at EnergyRates.ca.
The history of energy deregulation in Alberta
The deregulation of energy in Alberta applies to both natural gas and electricity. The deregulation of Alberta’s electricity market started with the Electric Utilities Act in 1995 – Alberta was the first province to deregulate its electricity market. As such, new prices for electricity are set each hour and the demand for electricity is matched with the lowest-priced supply.
However, even with this act, transmission regulation for electricity still exists within the Alberta deregulated electricity market. The transmission of electricity in the Alberta electricity market is managed by the Alberta Utilities Commission and the Alberta Electric System Operator (AESO). Distribution is also regulated by the Alberta Utilities Commission (AUC).
On the other hand, the Alberta natural gas market has been deregulated since October 31st of 1985 where the Natural Gas Markets and Pricing Agreement (otherwise known as the Halloween Act) was signed. This agreement helped to start rapid pipeline expansions and to increase natural gas production and exports in Alberta.
In having both natural gas and electricity deregulated, consumers in Alberta can choose where to obtain their energy from. Because of this, consumers have an excellent array of options in finding a retailer that will suit their needs, as retailers will have competitive pricing with one another because of deregulation.
At EnergyRates.ca, you can learn more about the deregulated energy market in Alberta – more specifically, you can learn how you can get the most out of the deregulated energy market in Alberta and how to compare plans between different utility providers.
