The short version: the Regulated Rate Option (RRO) was Alberta\'s default electricity rate from the early 2000s through 2024. It passed wholesale price movements through to monthly bills with a short delay. After the 2022 to 2023 price spikes, the AUC and the province redesigned it. The Rate of Last Resort (RoLR) replaced it in 2025, with a longer purchasing window and built-in smoothing. Same job, different mechanism, fewer surprises.
The belief that drove the original RRO design
When the RRO was designed, the assumption was that a thin pass-through formula was best — markets work, so households should see the market signal. If the wholesale price was low, RRO should be low. If wholesale was high, RRO should be high. Discipline through transparency. It worked in stable years and failed catastrophically when volatility arrived.
RRO vs RoLR, side by side
| Aspect | RRO (until 2024) | RoLR (from 2025) |
|---|---|---|
| Purchasing window | Weeks to one month | Longer multi-month window with hedges |
| Monthly volatility | Followed pool price closely | Smoothed; major spikes absorbed |
| Maximum monthly swing | Uncapped — could double in a cold month | Limited by procurement design |
| Predictability for households | Low | Moderate |
| Regulator | AUC | AUC |
| Default supplier role | Pass-through purchaser | Active hedger within an approved framework |
| Long-run cost expectation | Slightly lower in calm years, far higher in volatile years | Steadier across years; smoothing has a small implicit cost |
Why this matters for the rate-shopping decision
Under RRO, the case for signing a fixed contract was driven by the fear of next month\'s pool-price spike. Under RoLR, that fear is largely gone — the default is doing some of the hedging for you. The reason to sign a fixed contract today is more about your individual risk tolerance and your view on the multi-year forward curve, not about avoiding next month\'s shock.
That changes the math. Where RRO made an aggressive case for fixed contracts during 2022, RoLR removes a chunk of that urgency. The decision is more deliberate and less reactive.
What this means for your household
- If you were on the RRO before the reform, you are on RoLR now. Same retailer, smoother formula.
- The fixed-contract pitch that worked in 2022 ("avoid the spike") is less compelling under RoLR.
- Your bill will still move month to month with the seasons and with delivery-rider changes, but the wild swings should be much rarer.
- If a salesperson tells you "RoLR is risky", ask them to define risky against a real comparison window — not against the worst single month of 2022.
