2023-05-27 19:05:07
Under the plan drawn up by the United Conservative Party (UCP) government, consumers benefiting from the regulated electricity tariff had to pay a maximum of 13.5 cents per kilowatt hour during the months of January, February and March.
Blake Shaffer explains that anything over 13.5 cents must be paid back by customers over a 21-month period. These deferred amounts began appearing on invoices in April and monthly collections will continue through the end of 2024.
Three electricity companies, Epcor, Enmax et Direct Energy, supply electricity to their customers at a regulated rate. They charged between 18 and almost 33 cents per kilowatt hour during the first quarter of this year and the difference with the cap created a large collective debt.
The economist says those who are paying down the debt have seen an increase in their electricity bill of about 2.5 cents per kilowatt hour since the end of the price cap in April. But here comes the surprise
he says, Albertans can switch payment methods at any time.
Thus, people with a regulated electricity tariff can choose a fixed tariff and not reimburse their share of the deferral. This means that there are fewer people left to pay off the accumulated debt.
Yet thousands of Albertans can’t switch pricing options because the power companies won’t let them sign a contract. This is particularly the case for people whose credit rating is weak or bad.
Blake Shaffer says this debt could affect thousands of newcomers to the province. Someone from Ontario who knows nothing more than “I should just default to this rate because that’s what I do everywhere else in Canada” is going to have to pay the cost of this cap whose customers of the regulated electricity tariff benefited in the first quarter of 2023.
Future challenges
Regardless of who wins the next provincial election, Albertans should expect challenges over electricity, according to Blake Shaffer.
He adds that price forecasts this summer indicate that rates could climb as high as 29 cents per kilowatt hour. The New Democratic Party (NDP) proposal to cap prices would protect consumers while tapping into the provincial treasury.
The map of PCU to face the inflation of the price of electricity is not known.
« Changing the design of the electricity market is a really complicated and confusing process. But I think it’s something we should discuss. »
Mr. Shaffer describes the various aid programs put in place over the past 20 years as temporary solutions for a deregulated, market-driven system that is not working as intended.
With information from Scott Dippel
1685228006
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