‘Half-baked’: NDP says UCP’s electricity rate deferral is no use to consumers

Alberta’s official Opposition is calling for more action to address high electricity rates after data was released showing nearly half of current costs to some customers will need to be paid out next year.

Alberta Utilities Commission data show rates for customers on regulated rate options are hovering between 27 and 29 cents per kilowatt hour in January. NDP energy critic Kathleen Ganley said those numbers represent a 350 per cent increase in prices since the UCP first formed government. She said under the government’s current price deferral plan, nearly half of those costs will be turned into debt until after this year’s scheduled election.

“Albertans are already struggling to put food on the table and keep the lights on. Piling on more debt in the middle of an affordability crisis does nothing to help them in the long term,” said Ganley. “All it does is make Albertans’ power bills look good until after the election. It’s a scam, if the UCP wants to call it a rate cap, they should bring in a real one.”

The UCP government introduced an electricity price protection plan as part of a larger affordability measure package last year. Under the current plan, regulated rate option customers will not be charged more than 13.5 cents per kilowatt hour in January, February or March. Instead, any costs over that price ceiling will be deferred until rates drop allowing consumers to pay off those increased costs over a 21-month period from April to December 2024.

The government’s website says the protection plan is a temporary measure that has been implemented while longer-term solutions are explored. The AUC website shows electricity prices have been steadily rising since November 2022. Last January, regulated rate option prices ranged between 15.8 cents and 16.41 cents per kilowatt hour.

On Thursday, Ganley called the solution “half-baked,” saying it was a deferral scheme. Pointing to a recent study out of the University of Calgary’s School of Public Policy, she said the province has generated more than $100 million in revenue from a renewable energy program started in 2016 and said those funds could have been used to address high energy costs.

The money could have been used to help Albertans with their higher utility costs, particularly low-income Albertans who are struggling the most right now, said Ganley. “The UCP’s utility deferral scheme just piles more debt onto Albertans, which is the last thing that most Albertans need right now.”

She called on the government to implement a full price cap, similar to what the NDP had created while expanding an electricity rebate program currently in place to include seniors and renters.

Andrea Farmer, press secretary for Minister of Affordability and Utilities Matt Jones, said the government is taking steps to protect consumers and said the ceiling cap and resulting deferral will help to minimize pressures on Albertans.

“Alberta’s government is also extending no-interest loans to RRO providers so this protection can be provided with no interest to rate-payers,” said Farmer. “There are approximately 800,000 Albertans consumers on the RRO who are now receiving this price protection, and we are protecting them from price spikes.”

The rate ceiling is part of a $2.8-billion affordability package introduced by Premier Danielle Smith that also includes monthly $100 payments to eligible Albertans, a suspension of the provincial fuel tax and income tax relief measures.

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