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Electricity in Alberta

The Price of Electricity In Alberta

Two main charges make up the cost of your electricity: the cost of the electricity supply itself, and the cost of delivering it to your home. Electricity prices in Alberta are based on market prices, though since 2001, when residential electricity markets in Alberta were opened to competion, you have a choice of who supplies your energy, and of what type of price of electricity you prefer (i.e. a fixed price, or a price that varies as the market prices change). While the proportions do vary depending on where you live in Alberta (power distribution costs are higher for rural areas), the cost of your electricity supply makes up about 40% of the total price on your bill. You can find out more details about the cost of your electricity in our dedicated article on the cost of electricity in Alberta.

Different Electricity Prices in Alberta

As mentioned above, you have several options for the type of electricity price you prefer. The default electricity rate, which is regulated by the Alberta Utilities Commission (AUC), is what you pay if you do not choose to purchase your power from a competitive energy retailer. It is called the regulated rate option, and is offered by specific regulated rate providers that have the exclusive right to sell it within the service territory of a certain wires services provider (utility). This price is based on market prices, and varies month by month. Regulated rate providers are required to follow a specific energy procurement procedure (known as an Energy Price Setting Plan), and their prices are approved by the AUC according to this procedure.

If you decide to purchase a contract for your electricity supply, depending on the supplier you will have a choice of two price options: fixed or floating. A fixed price contract locks you in to paying the same price throughout the term of your contract. These are often set at prices that are slightly above the current market rate, though you will continue to pay this price even if market prices rise above it. Most competitive energy retailers offer at least one type of fixed price option. Contracts that are for longer terms are generally at higher rates, reflecting greater uncertainty about prices in the future. Though it's not always certain that they will be a better deal for your money over the long run, the advantage of a fixed price is that it offers stability and predictability for your energy bills, which can be helpful for budgeting purposes. 

A floating electricity rate varies in function with prices on the market, plus a small transaction fee (usually no more than one or two cents per kWh). While choosing a floating rate means that your power bills may vary considerably month by month, they are generally considered to be the cheapest option for your electricity supply, even when compared to the regulated rate option! If you are unsure of whether a fixed or a floating rate is right for you, we invite you to check out our comparison of fixed and floating electricity rates.

Green Electricity

Alberta's energy mix is heavily dependent on fossil fuels. As Alberta's electricity regulations make new generation capacity the responsibility of private investors, choosing to purchase green energy that is produced in Alberta is one way to help change this. If you want to go one step further and start generating your own environmentally-friendly electricity, thanks to Alberta's micro-generation regulations. 

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