Addressing Rising Electricity Costs for Alberta SMEs and Citizens

Issue

An increasing number of Alberta SMEs and citizens have been struggling to pay rising electricity costs. Utility bills have increased significantly in 2022 and 2023 and saw unprecedented prices peaks, the highest ever charged, in December of 2022. Higher prices are having dramatic impacts on SME and residential customers throughout the province. 

Background

The rising electricity costs in Alberta have become a significant challenge for small and medium-sized enterprises (SMEs) and residential customers throughout the province. The transition to cleaner energy sources has led to an increase in generation capital investments, resulting in volatile Power Pool prices and higher retail prices for electricity.Additionally, the closure of coal plants, gas supply constraints, and low wind generation have all contributed to the increasing cost of generation, leading to unprecedented price peaks in December 2022. 

Our Recommendations

1. Cover some or all of the $200 million cost of the January-March deferral to prevent customers from having to pay rates even higher than before the deferral program. The government could consider using some of the forecast $2.4 billion surplus to prevent the unintended consequence of runaway cost increases to SME and residential customers.