How to Buy Electricity in Alberta: A Guide for Everyone
Getting electricity for the first time, running a business, or just checking out your choices? It's good to know how the energy market works in Alberta.
Alberta's system offers a blend of regulated rates and competitive market choices, ensuring you can find the best option for your needs.
Understanding Alberta's Electricity Market
In Alberta, the electricity market has three key groups: Transmission Facility Operators, Distributors, and Electricity Retailers.
Transmission Facility Operators
The electricity grid is like a road system. Transmission Facility Operators are like the managers of the highways. Just as highways are built for traffic to move quickly over long distances, connecting different regions. The high-voltage transmission lines managed by Transmission Facility Operators carry large amounts of electricity over long distances. These operators ensure that the electricity 'traffic' flows smoothly and efficiently from power plants to various substations, without congestion or bottlenecks. They maintain the transmission grid's reliability and stability.
Distributors
Distributors: Distributors are like the local road managers. They ensure that electricity reaches the final mile, stepping down the high voltage from the transmission 'highways' to safe, usable levels, just as speeds are reduced for off-highway driving.
Distributors maintain the poles, wires, and transformers in the local power grid, handling new connections, upgrades, and repairs to keep the lights on. They ensure every neighborhood receives a reliable electricity supply, managing outages and repairs, and ensuring that the distribution lines are well-maintained for reliable delivery of power to every doorstep.
Regulated Retailers
Distributors sell electrity at regulated rates. This is why they are often called regulated retailers.
There is only one Regulated Retailer in your geographic area.
Battle River Power Coop is the Regulated Retailer in their service area.
Regulated Rates
This is the default rate you pay when you buy your electricity from a Distributor (Regulated Retailer).
It is available to residential, farm, and small business customers who consume less than 250,000 kilowatt-hours per year.
Distributors can be Rural Electrification Associations (REAs), investor-owned utilities, or cities. For REAs the regulated rate is approved by their Board of Directors, for investor-owned utilities by the Alberta Utilities Commission, and for cities by municipal councils or other local regulatory bodies.
The Regulated Rate is based on the current wholesale market price of electricity. That can be volatile.
Competitive Retailers
A competitive retailer is an organization that buys wholesale electricity and sells it to consumers, offering competitive rate options.
If you buy electricity from a Competitive Retailer your power will still be delivered by a Distributor.
Competitive Rates
You can shop around and choose a Competitive Retailer based on the plans and rates that best fit your needs.
Their plans can include fixed rates, where the price per kilowatt-hour (kWh) stays the same for the duration of a contract.
They can also offer variable rates, which fluctuate with the market price of electricity.
When you opt to purchase electricity from a competitive retailer it's called 'entering into a contract'.
To buy power in Alberta you need a Distributor to hook you up to the grid, and someone to sell you the power that runs over that grid.
You can buy power from your Distributor (Regulated Retailer) at a Regulated Rate.
Alternatively, you can buy power from a Competitive Retailer and the Distributor will still supply it.
Key Differences Between Competitive and Regulated Retailers
| Competitive Retailers | Regulated Retailers | |
|---|---|---|
| Rate Options | Competitive Rate | Regulated Rate |
| Pricing Structure | Can offer fixed or variable rates | Only variable rate |
| Services | Only Sell electricity | Sell electricity and run your power grid |
| Regulation | Competitive market environment | Regulated by an REA Board of Directors, the Alberta Utilities Commission, or appropriate municipal body. |
In summary, Competitive Retailers provide consumers with options and potentially more competitive pricing through various plans. Regulated Retailers provide a default option for those who prefer not to navigate the competitive market.
Choosing An Electricity Retailer
If the idea of a regulated monthly rate doesn't suit your budget or preference, Alberta's open electricity market gives you the power to choose.
You can shop around for a Competitive Retailer that offers more predictable pricing plans, including:
- fixed rates (where your rate stays the same for the duration of your contract)
- competitive variable rates (which can differ from the regulated rate)
Competitive Retailers usually offer no-contract options for maximum flexibility or longer-term contracts for those seeking price stability.
How to Shop for a Retailer
- Check Your Eligibility Ensure the retailer you're interested in is registered to operate in your area.
- Compare Plans Look at the different rates, terms, and conditions offered. Consider if you prefer the stability of a fixed rate or the potential savings of a variable rate.
- Read the Fine Print Understand contract lengths, security deposit requirements, fees for early termination, and any other obligations.
- Evaluate Customer Service Consider the retailer's reputation for customer service and support.
Regulatory Bodies and More Information
The Alberta Utilities Commission oversees the province's electricity market, ensuring fair and transparent operations. For more guidance, including a list of registered retailers, visit ucahelps.alberta.ca.
If you live in a rural community and don't see a Distributor/Regulated Retailer for electricity on the Alberta Utilities Commission website, you might be in the service territory of a Rural Electrification Association (REA). For a list of REAs, visit the Alberta Federation of Rural Electrification Associations, Member Directory.
Embrace Your Power to Choose
Buying electricity in Alberta puts you in control. Whether you stick with the regulated rate or shop around for a competitive plan, you have the freedom to choose what best meets your needs.
Remember, the power (quite literally) is in your hands!