EDMONTON — Albertans who have not signed electricity contracts will see a big fluctuation in their bills from now on.
As of Thursday, the Alberta government is adjusting the regulated rate of electricity so it is based on short-term market prices.
The Stelmach government says this “will better reflect current market conditions” and “give Albertans a more accurate picture of the current price of electricity.”
But Liberal Leader David Swann and others say people will see wide swings in their power bills.
For the last five years, electricity prices were based on a mix of long-term and short-term market prices.
Now prices will be based solely on next month’s projected market price.
There are companies that offer long-term contracts for electricity, but Swann warns some contracts often result in higher power bills, on average, than the regulated rate option.
He says the companies also have high administration fees and charge a hefty fee for changing or cancelling a contract.
Direct Energy, for example, charges $400 if you cancel its five-year fixed contract. They also charge $9.00 per month for administration costs. And their current rate is 7.99 cents per kilowatt hour, which is more expensive than the current regulated rate option of 6.5 cents per kilowatt hour.
Just Energy charges $75 to cancel their contract, with a $6.90 per month administration fee.
Swann says many consumers don’t have time to carefully examine the details of electricity contracts and he worries people will feel pressure to sign contracts without the right information available to them.
“The Stelmach administration hasn’t done nearly enough to educate or protect consumers,” Swann says.
“Alberta used to enjoy among the lowest electricity prices in the nation. Thanks to Tory bungling, our prices are now among the highest. Deregulating the electricity market was a huge mistake, one that a Liberal administration would never have made.”