The NDP Government is capping power prices Albertans will pay starting in June, a move it says will protect families from volatile price changes.
The cap will be set at 6.8 cents per kilowatt hour, more than twice what most Albertans pay now and will remain in effect until 2021.
Premier Rachel Notley said families can rest assured that if the market price goes over the mark, it won’t appear on their bills.
The last year, the average regulated rate option price was 5.7 cents, down from 7.7 in 2014 and in 2012, prices spiked to 15 cents in one month, according to the government.
“With a rate cap of 6.8 cents, this would guarantee the average homeowner will pay no more than roughly $40 for the electricity portion of their bill,” Notley said, as opposed to up to $90 Albertans could’ve paid with the 2012 jolt.
If the market price does go above the ceiling, Notley said the government has multiple tools to offset the cost, including funds from the carbon levy.
“The government will step in for the period of time that happens,” Notley said. “It’s not necessarily the case that it will go above 6.8, we took a reasonable estimate and we think we have a lot of tools at our disposal to keep prices lower.”
“Should they go up, it’s a reasonable use of the funds within the carbon levy, because it’s about supporting stability while transitioning to not only more stable and a better market, but also facilitate the move off of coal and the move to cleaner forms of energy.”
Albertans will still be able to choose private suppliers.
Wildrose Shadow Electricity & Renewables Minister Don MacIntyre said however this is part of deregulating the current system and eventually families will suffer.
“They are going to go away from an energy market and they are going to go to a capacity market and that’s going to lead to consumer debt,” he said. “The 6.8 cap on the RRO is probably going to be good news for families, however there’s always a cost to these things.
“What we have not been told is the details, what’s this going to cost?”
MacIntyre estimates it’ll be 11.4 cents per kilowatt to meet the NDP plan of having 30 per cent of the province’s electricity supply fueled by renewable power by 2030.
“Somebody’s going to have to pay that and you can put a cap on here of 6.8, but what about the other five cents, who’s going to pay that and how?”
Interim PC Leader Ric McIver also said Albertans will be left to foot any leftover cost.
“Whether families pay through increases in their electricity bills or through increases in their taxes, Albertans will be left to cover the difference,” McIver said in a release. “The NDP government must take responsibility for the price volatility that they themselves have created.”
The NDP will be making more energy announcements this week, including the phase-out of coal.