The history and impact of electricity deregulation
It’s no secret that the energy market has had a big impact on Alberta’s economy overall, but have you ever wondered how that came to be? Since the late 19th century, the energy market has been shaping the economics and politics of Canada, and Alberta—despite being one of the younger provinces—has actually forged a lot of the energy market’s path and played a leading role in shaping energy generation, transmission, distribution, and the market itself. How? By using the deregulation of the energy market to increase investment and competition, thereby shaping the energy economy and making the lowest electricity rates in Calgary more than simply a possibility, but also a major market strategy.
Alberta initiated the move to deregulate the electricity market at the wholesale and resale level in 1996, following the adoption of the Electric Utility Act in 1995, and following the deregulation of the natural gas market in 1985. This allowed for a level playing field between all electricity generators, and it improved the opportunity for a competitive market—which would mean lower and more competitive rates and rate plans for consumers.
It was (and still is) a controversial change to the way the market was structured, but while the change did contribute to the spike in wholesale electricity prices between 1999 and 2000, it also contributed to the introduction of energy payment rebates, incentives—and the increase in new generator capacity (from 2500 MW to 5200 MW) between 1998 and 2002, which allowed the wholesale spot price to fall back to 1999 levels by 2002. In other words, much of the current shape of the Alberta economy has the deregulation of the energy market to thank, at least in part; however, that isn’t the most important effect of energy deregulation: as a result, many Albertans now also have access to the lowest electricity rates in Calgary.
What are the benefits to the electricity market?
The benefit of energy deregulation extends to energy generators, but it also extends to electricity consumers. Because of energy deregulation, consumers have more options to choose from when it comes to selecting an energy rate plan. Why? Because a competitive market means generators and suppliers are going to work harder to appeal to (and thus attract) consumers. A more balanced opportunity between suppliers and generators also means consumers have a broader range of suppliers to choose from—and more options means suppliers can cater to specific market demographics, creating more opportunities for consumers (from large-scale companies and farms to small start-up businesses and residential consumers) to get the rate plans that speak to their specific needs. That means more consumers can access the lowest electricity rates in Calgary, whether access to those low rates comes from the structure of the rate plan or from the rates themselves.
The success of the market speaks for itself. While the Rate of Last Resort (RoLR),(formerly known as the RRO) is also available to protect consumers against market price spikes, Alberta is still considered to have one of the most deregulated electricity markets in Canada. Forty percent of consumers choose competitive electricity products over the regulated rate option.
If you would like more information on how to get the lowest electricity rates in Calgary, visit our page on electricity and natural gas retailers serving the City of Calgary. You can also find the lowest rate possible on the EnergyRates.ca pricing matrix
