Albertans Face Decade’s Largest Power Bill Increases

Between 2020-2024, Alberta experienced a 40% increase in residential electricity costs. That’s more than double the second largest increase experienced in New Brunswick and close to triple the national average. The reasons for Alberta’s surging electricity prices are complicated, however, there are several factors that can be examined. 

• Most provinces have a monopoly in electricity transmission and generation. To keep this power in check, rate increases must be pleaded before a provincial regulator to keep rate increases steady and in check. To establish a more beneficial and competitive marketplace, a quarter of a century ago, Alberta decided to deregulate its electricity sector. However, ownership of power plants remained concentrated, and the expected benefits clearly haven’t realized themselves.
• In 2020, a 20-year power purchase agreement (contract setting fixed electricity prices) expired. This gave power plant operators back control of their assets, allowing them to set their own electricity prices.
• Alberta’s electricity sector is mainly powered by natural gas, and previously coal. The market prices of these commodities can swing considerably. Their transition from coal to natural gas also left several coal plants offline, creating a temporary shortfall in generation capacity.

·         Alberta has experienced an increased adoption of air conditioning due to extremely hot summers caused by climate change.

To cushion the blow, Alberta tacked on $500 rebates to power bills and started offering a new fixed rate. If Albertans don’t or can’t purchase power from unregulated retailers, they are automatically enrolled in the “rate of last resort”. For the next two years this rate has been fixed with a maximum increase of 10%.

The provinces with the lowest rate increases and lowest absolute rates (B.C., Manitoba, Quebec) have shown a pattern, generating electricity through renewable energy.

Borrum Energy Solutions designs microgeneration wind turbines and towers, that with the power of renewable energy, provide rural dwellers with an opportunity to lower their costs while reducing carbon emissions and dependence on the electrical grid.