Regulated Electricity Rate

If you have not entered into an energy contract, then by default you are on the Regulated Rate.

What are Regulated Rates?

Regulated rates are the 'default' rates charged by your local power grid operator for your energy supply.

How are Regulated Rates Set?

Picture this: the electricity market is a bit like a giant supermarket, but instead of selling groceries, grid operators are buying and selling electricity.

The price of electricity in this "supermarket" can go up and down based on how much people need it (demand) and how much is available (supply). For example, on a hot day, lots of people turn on air conditioners, increasing demand. If there isn't enough electricity to go around, the price can go up.

The regulated rate you see on your bill is designed to provide a fair price that reflects the real cost of electricity, while also protecting you from sudden price jumps. It's a mix of these elements:

• Spot Market Price: This is the starting point, based on the actual cost of electricity on the market at any given time.
• Risk Management and Hedging: Think of this as a safety net. It's added to help manage the risks of those prices swinging wildly. See more about this below.
• Operation and Management Expenses: These include customer service, billing systems, risk management, and administrative functions necessary to deliver reliable power.

Risk Management and Hedging Explained

Imagine you're saving up to buy something big, but the price keeps changing - sometimes it's low, and other times it's really high. You want to find a way to make sure you don't end up having to buy it when the price is at its highest, right?

That's what your Battle River Power Coop does with risk management and hedging.

The price of electricity changes often depending on how much people need it and how much is available. So, we make plans to keep the price as steady as possible for you.

We do it through risk management and hedging:

Risk Management

This is like having a smart plan to avoid big surprises. We look ahead and consider when prices might go up or down. We're always working to make sure these changes don't hit you too hard.

Hedging

This is a specific action we take as part of our risk management plan. Think of it as buying "insurance" against big price jumps.

We make enter long-term wholesale contracts (hedges) that allow us to buy electricity at more predictable prices, even if the market prices go up and down like a roller coaster.

This way, we can offer you a more stable price, so your electricity bill isn't all over the place from month to month. It's our way of keeping things as smooth and predictable as possible for you, even when the electricity market is unpredictable.

Key Points

• Default Option: If you haven't entered into an energy contract with Battle River Power Coop, or chosen a competitive retailer, then you're automatically on the Regulated Rate.
• Understanding Regulated Rates: These are default rates that reflect the actual cost of electricity, aimed to be fair and protect consumers from price volatility.
• How Rates Are Set: Rates are based on the supply and demand in the electricity market, including factors like weather, which affects how much electricity people use.
• Components of the Rate: The regulated rate includes the spot market price, costs for risk management and hedging to stabilize prices, and operation and management expenses.
• Doesn't Include Distribution The regulated rate doesn't include distribution costs, which are billed separately. Distribution costs cover the expense of maintaining the physical infrastructure that delivers electricity to your premises.
• Monthly Adjustment The regulated rate is typically recalculated on a monthly basis to reflect current market conditions, ensuring that the rate remains relevant and fair for consumers.

Competitive Retail Energy Retailers

Information on competitive retail energy providers within the Coop service area is located on Energy Retailers.