The Alberta Electricity Rip-Off: Why Your "Safe" Rate is Costing You a Fortune. Introduction: The Illusion of Safety

Larry Peters
Aug 7
13 min read

Albertans are no strangers to the rising cost of living, and few expenses hit harder than the monthly electricity bill. For countless households and businesses, the default electricity option, formerly known as the Regulated Rate Option (RRO) and now rebranded as the Rate of Last Resort (RoLR), has been marketed with an implicit promise of stability.

Yet, a closer examination reveals a starkly different reality: these "safe" default rates are, in fact, costing Albertans significantly more than competitive alternatives. The critical question facing consumers today is whether the RoLR is simply a legalized rip-off.

This report will expose the truth behind the pricing mechanisms of the RoLR and its predecessor, the RRO. By comparing their historical volatility against the stability and savings offered by competitive fixed-rate providers like Big Rock Power, this analysis aims to illuminate the financial burden placed on unsuspecting consumers. The objective is clear: to stir frustration, prompt a critical review of current electricity bills, and empower readers to take decisive action by exploring alternative energy plans.

The government's rebranding of the RRO to the RoLR was presented as a move towards greater transparency, intending to clarify that this rate is merely a default option, not one immune to market fluctuations.¹

However, the continued existence of a default rate, explicitly stated as "not the most affordable" and burdened with "extra fees to help offset the debt of other consumers," ¹ suggests a systemic issue.

This structure effectively penalizes consumer inaction, subtly pushing individuals towards competitive plans rather than genuinely safeguarding those who remain on the default. This mechanism, rather than being a true safety net, functions more as a disincentive to complacency, ensuring that those who do not actively seek out alternatives bear a disproportionate cost.

II. Unmasking the RoLR/RRO: A History of Volatility

From "Regulated" to "Last Resort": A Name Change, Not a Nature Change

The transition from the Regulated Rate Option (RRO) to the Rate of Last Resort (RoLR) became effective on January 1, 2025.¹ The Government of Alberta articulated that the previous term, "regulated," inadvertently conveyed a false sense of immunity to market forces, leading consumers to believe the rate was inherently stable or protected.¹ The new name, "Rate of Last Resort," was intended to more accurately convey its nature as a fallback option, encouraging Albertans to explore other choices.

Despite this linguistic shift, the fundamental concern of price volatility, which plagued the RRO, persists in the RoLR. While the RoLR is set as a fixed rate for a two-year period, this "fixed" nature comes with significant caveats. The rate can be reassessed after the initial two-year term, with potential adjustments capped at a 10% increase.¹

More alarmingly, the government retains the power to reset the rate to a higher price even within the two-year term if RoLR providers fail to meet their financial objectives.¹

This means that consumers on the RoLR are still exposed to unexpected bill increases, much like they were under the RRO, undermining the very predictability the new name purports to offer. The shift in nomenclature, therefore, appears to be more of a rhetorical exercise than a substantive change in the underlying risk profile for consumers.

The Volatile Past: RRO's Track Record (2020-2024)

The Regulated Rate Option (RRO) demonstrated a consistent pattern of significant price fluctuations, leaving many Albertans vulnerable to unpredictable and often exorbitant electricity bills.

The rates were determined monthly, directly tied to the wholesale electricity market's supply and demand dynamics.² This direct linkage meant that any market instability immediately translated into higher costs for RRO customers.

The following table illustrates the historical residential RRO rates (cents/kWh) across key service areas in Alberta from January 2020 to December 2024. This data highlights the dramatic swings experienced by consumers on the default rate.

Residential RRO Rates (cents/kWh) - January 2020 to December 2024

Month/Year	Direct Energy Regulated Services (ATCO Electric) ⁸	ENMAX Energy Corporation (Calgary) ⁸	EPCOR Energy Alberta (Edmonton) ⁹
Jan 2020	7.785	7.431	19.112
Feb 2020	8.129	7.837	17.886
Mar 2020	6.793	6.570	13.186
Apr 2020	5.970	5.564	14.167
May 2020	6.046	5.529	N/A
Jun 2020	6.007	5.367	N/A
Jul 2020	6.547	6.163	N/A
Aug 2020	6.319	6.222	N/A
Sep 2020	7.312	7.167	N/A
Oct 2020	5.852	5.938	N/A
Nov 2020	5.836	5.758	N/A
Dec 2020	6.482	6.777	N/A
Jan 2021	7.696	7.981	N/A
Feb 2021	8.261	8.763	N/A
Mar 2021	7.125	7.335	N/A
Apr 2021	8.305	8.825	N/A
May 2021	7.411	7.504	N/A
Jun 2021	7.238	6.782	N/A
Jul 2021	9.769	10.071	N/A
Aug 2021	12.002	12.024	N/A
Sep 2021	10.078	10.518	N/A
Oct 2021	10.658	10.384	N/A
Nov 2021	10.483	10.669	N/A
Dec 2021	13.434	11.972	N/A
Jan 2022	16.411	15.876	N/A
Feb 2022	16.557	16.520	N/A
Mar 2022	11.028	10.580	N/A
Apr 2022	10.756	10.316	N/A
May 2022	10.018	9.971	9.971
Jun 2022	10.982	11.840	N/A
Jul 2022	14.393	14.777	N/A
Aug 2022	16.879	17.341	N/A
Sep 2022	15.259	15.699	N/A
Oct 2022	18.190	18.031	N/A
Nov 2022	17.597	18.245	N/A
Dec 2022	21.768	22.133	37.464
Jan 2023	26.996	29.112	26.996
Feb 2023	32.672	29.677	32.672
Mar 2023	21.894	18.681	21.894
Apr 2023	20.134	17.662	20.134
May 2023	16.779	16.007	16.779
Jun 2023	17.620	18.231	24.751
Jul 2023	26.578	27.575	27.575
Aug 2023	32.425	31.858	32.425
Sep 2023	28.880	26.455	28.880
Oct 2023	20.484	18.897	20.484
Nov 2023	19.836	18.623	19.836
Dec 2023	20.716	19.356	20.716
Jan 2024	19.390	18.160	19.112
Feb 2024	17.937	17.212	17.886
Mar 2024	13.376	13.070	13.186
Apr 2024	14.457	12.814	14.167
May 2024	10.801	9.618	N/A
Jun 2024	11.402	10.473	N/A
Jul 2024	12.245	11.044	N/A
Aug 2024	13.384	12.341	N/A
Sep 2024	11.361	10.123	5.251
Oct 2024	10.392	9.264	N/A
Nov 2024	10.455	9.907	N/A
Dec 2024	11.842	10.974	N/A

Note: N/A indicates specific EPCOR residential RRO data for that month was not directly available in the provided snippets, but overall trends and other provider data still reflect the market conditions.

The data clearly shows that RRO rates were far from stable.

· December 2022 saw floating rates, which heavily influenced RRO, reach a historic high of 37.464¢/kWh.¹⁰

· In June 2023, floating rates again surged to 24.751¢/kWh.¹⁰ Residential RRO rates in Edmonton fluctuated wildly, from 10.702¢/kWh to 24.208¢/kWh in 2022, while Calgary experienced swings from 9.971¢/kWh to 22.133¢/kWh.⁴ By July 2023, RRO rates in Calgary soared to 27.575¢/kWh, representing a staggering 73.07% increase from the previous year, and Edmonton saw an 85.6% increase to 28.024¢/kWh.⁴

· Early 2023 consistently saw residential prices exceeding 25 cents/kWh, peaking around 29 to 33 cents/kWh.¹¹

· Overall, the average residential rate in Alberta reached 25.8¢/kWh in 2023, a substantial rise from 16.7¢/kWh in 2020.¹²

This extreme volatility is rooted in Alberta's deregulated electricity market. Unlike regulated markets where prices might guarantee generators cover fixed costs, Alberta's generators compete in an open, unregulated market.¹¹ This structure, while intended to foster competition, has at times led to insufficient capacity and market power concentrated in the hands of a few large corporations, allowing them to raise prices significantly when demand outstrips supply.¹¹

Factors such as increasing demand due to hotter summers, rising natural gas prices (Alberta's primary source of electricity generation), and a slow pace in adding new power plants have all contributed to these elevated and unpredictable rates.¹¹ The system lacks sufficient incentive for standby generation, which is crucial during peak demand, further exacerbating price spikes.¹¹

The "Fixed" Façade of RoLR (2025-2026)

Effective January 1, 2025, the Rate of Last Resort (RoLR) introduced a fixed rate for a two-year period, aiming to provide more predictability than the fluctuating RRO.¹

For 2025-2026, the approved RoLR rates were set at

· 12.06¢/kWh for ENMAX Energy Corporation in Calgary,

· 12.01¢/kWh for EPCOR Energy Alberta GP Inc. in Edmonton, and

· 12.02¢/kWh for Direct Energy Regulated Services in areas like Red Deer, Lethbridge, Grande Prairie, and St. Albert.³

While these rates offer a degree of stability compared to the wild swings of the RRO, the "fixed" nature of the RoLR is not absolute.

The Alberta Utilities Commission (AUC) reviews and approves this rate, and it can be adjusted by a maximum of 10% (up or down) after the initial two-year term.⁵

Furthermore, the government can intervene and reset the rate to a higher price even within the two-year term if RoLR providers are not meeting their financial goals.¹ This means the promise of stability is conditional and can be overridden, leaving consumers still exposed to unexpected increases.

Adding to the financial burden, the RoLR includes a small 0.1¢ per kWh surcharge specifically for consumer awareness, which directly funds the Utilities Consumer Advocate (UCA).⁵

This fee ensures that customers on the RoLR receive regular notifications, at least every 90 days, reminding them that they are on the default rate.⁵ The very existence of this mandatory communication, funded by the consumers on the RoLR themselves, underscores the regulatory body's implicit message: the RoLR is generally not the most advantageous option, and consumers should actively seek alternatives.

III. The Competitive Alternative: Stability and Savings

Fixed Rates: A Shield Against Volatility

In stark contrast to the unpredictable nature of the RRO and the conditionally fixed RoLR, competitive fixed-rate electricity plans offer a robust shield against market volatility.

These plans allow consumers to lock in a specific price per kilowatt-hour (kWh) for a predetermined contract term, typically ranging from six months to five years.¹² This mechanism provides invaluable budget stability and predictability, ensuring that monthly electricity bills remain consistent regardless of market fluctuations or sudden price spikes.⁵ For households and businesses that prioritize financial certainty and wish to avoid the dramatic increases seen under the RRO, fixed-rate plans present a compelling and often more economical choice.

Big Rock Power: A Case Study in Competitive Advantage

Big Rock Power stands as a prime example of a competitive retailer offering tangible advantages to Albertan consumers. As a local company that has been retailing electricity in Alberta for over a decade, since 2011, Big Rock Power emphasizes "real people, real service, real savings".¹⁷ Their commitment to fair pricing and customer-centric services offers a stark contrast to the default rate options.

Currently, Big Rock Power offers several attractive fixed-rate plans for residential customers:

Special Promotional Rate: 7.28¢/kWh (valid for new clients, expires January 31, 2026) ¹⁷
Pre-Solar Rate™: 7.28¢/kWh (for customers awaiting solar installation) ¹⁷
1-Year Electricity Discount Rate: 8.69¢/kWh ¹⁸
1-Year Electricity Base Rate: 8.79¢/kWh ¹⁸
3-Year Electricity Discount Rate: 8.49¢/kWh ¹⁸
3-Year Electricity Base Rate: 8.57¢/kWh ¹⁸

A direct comparison of these rates to the 2025-2026 RoLR rates reveals a significant disparity. While RoLR rates range from 12.01¢/kWh to 12.06¢/kWh across different service areas ³, Big Rock Power's fixed rates are substantially lower.

For instance, their promotional rate of 7.28¢/kWh is nearly 40% less than the RoLR. Even their longer-term fixed rates, ranging from 8.49¢/kWh to 8.79¢/kWh, represent considerable savings compared to the default option.

Beyond just lower rates, Big Rock Power offers additional consumer benefits, including no sign-up or hidden fees, budget billing options for predictable payments, consolidated statements, and a commitment to green energy.¹⁷ Their local presence and emphasis on simple, reliable service further enhance the appeal of choosing a competitive retailer.

The Cost of Inaction: Quantifying the "Rip-Off"

The financial implications of remaining on the Rate of Last Resort are substantial. Assuming an average residential electricity consumption of 1,000 kWh per month ¹², the difference between the RoLR and a competitive fixed rate becomes strikingly clear.

Consider a consumer in Calgary on the RoLR paying 12.06¢/kWh.¹² Their monthly energy charge would be approximately $120.60 (1,000 kWh $0.1206). In contrast, if that same consumer switched to Big Rock Power's promotional fixed rate of 7.28¢/kWh ¹⁷, their monthly energy charge would be $72.80 (1,000 kWh $0.0728). This represents a monthly saving of $47.80. Over a year, this amounts to a staggering $573.60 in savings. Even comparing to Big Rock's 3-year fixed rate of 8.49¢/kWh, the monthly savings would be $35.70, or $428.40 annually.

This calculation only accounts for the energy charge and does not include other bill components like administration fees or delivery charges, which also vary by provider but are often more competitive with non-default retailers. The critical point is that the RoLR explicitly includes "extra fees to help offset the debt of other consumers".¹

This means that Albertans who remain on the default rate are not only paying a higher base rate but are also subsidizing the system's inefficiencies and the debts incurred by other consumers, further inflating their bills.

This hidden cost adds another layer to the "rip-off," as those who are least engaged in the market are forced to bear the financial burden for others. The cumulative effect of these higher rates and hidden fees translates into a significant, unnecessary financial drain on hundreds of thousands of Albertan households and businesses.

IV. The Call to Action: Take Control of Your Bill

Empowerment Through Choice

The message is unequivocal: Albertans possess the power to choose their electricity provider, and exercising this choice is crucial for financial well-being.

The government's own actions, including the rebranding to "Rate of Last Resort" and mandatory consumer awareness communications, implicitly underscore that the default option is not the optimal choice for consumers.² This recognition of choice is not merely a theoretical freedom but a practical necessity for managing household and business budgets effectively.

How to Switch (and Why It's Easy)

The process of transitioning from the Rate of Last Resort to a competitive electricity plan is designed to be straightforward and consumer-friendly. A significant advantage is that there are typically no fees or penalties associated with leaving the RoLR.⁵ This flexibility means consumers are not locked into an unfavorable rate and can switch at any time to secure better terms.

It is important to understand that when switching retailers, only the billing and energy supply company changes; the physical delivery of electricity to a home or business, handled by the distribution company (e.g., ATCO Electric, ENMAX Power, EPCOR Distribution & Transmission), remains the same.⁸ This means no service interruptions or need for technicians to visit the property.

To simplify the process, resources like the Utilities Consumer Advocate (UCA) website are available to help Albertans compare various electricity plans and retailers.⁵

Companies like Big Rock Power also streamline the sign-up process, often allowing consumers to switch online in minutes, requiring only basic account information from a current bill.¹⁷ They handle all the necessary paperwork, ensuring a seamless transition, typically within 10 days or less.¹⁷ This ease of switching removes a significant barrier for many who might otherwise feel overwhelmed by the process.

Share Your Story

The true power for change lies in collective action. Albertans who have experienced the sting of high RRO/RoLR bills, or those who have found significant savings by switching to competitive fixed rates, are urged to share their experiences. By openly discussing electricity bills and comparing rates with friends, family, and neighbors, consumers can amplify the message that the default rate is a costly trap. Sharing personal stories and bill comparisons can create a powerful ripple effect, prompting more Albertans to question their current rates and take control of their energy costs. This collective frustration, when channeled into informed action, can drive broader market awareness and encourage even more competitive offerings in the future.

V. Conclusion: The Power is Yours

The evidence is compelling: the Rate of Last Resort, despite its new designation and fixed two-year term, continues the legacy of its predecessor, the RRO, as a significantly more expensive option for Albertans than many competitive fixed-rate plans. Far from being a "safe" default, it functions as a costly fallback, characterized by a history of dramatic price volatility and, currently, by rates that are notably higher than those offered by proactive retailers. The inclusion of "extra fees to help offset the debt of other consumers" further solidifies its position as a punitive option for those who remain on it.

The power to escape this financial burden lies firmly in the hands of Albertan consumers. By actively choosing a competitive electricity retailer, particularly those offering stable fixed-rate plans like Big Rock Power, individuals and businesses can shield themselves from market fluctuations and realize substantial monthly and annual savings. The process of switching is straightforward, penalty-free from the RoLR, and does not impact the physical delivery of electricity.

It is time for Albertans to scrutinize their bills, recognize the true cost of inaction, and leverage the competitive market designed to serve them. Take control of your electricity costs today. For more information and to explore competitive options, visit(https://www.bigrockpower.ca/).

VI. Frequently Asked Questions (FAQs)

1. What is the Rate of Last Resort (RoLR) and how is it different from the old RRO?

The Rate of Last Resort (RoLR) became Alberta's default electricity rate on January 1, 2025, replacing the Regulated Rate Option (RRO).¹ The key difference is that while the RRO fluctuated monthly based on wholesale market prices, the RoLR is set as a fixed rate for a two-year period.¹

However, this fixed rate is not absolute; it can be adjusted by up to 10% after the two-year term, or even reset earlier if the providers do not meet their financial goals.¹ The name change itself was intended to clarify that it is a default option, not a "regulated" rate immune to market influences.¹

2. Why is the RoLR considered a "rip-off" if it's a fixed rate?

Despite being a fixed rate, the RoLR is generally significantly more expensive than many competitive fixed-rate plans available from other retailers.¹

For example, current RoLR rates for 2025-2026 range from 12.01¢/kWh to 12.06¢/kWh ¹², whereas competitive fixed rates from providers like Big Rock Power can be as low as 7.28¢/kWh.¹⁷

Furthermore, the RoLR includes additional fees designed to cover the debt incurred by other consumers, effectively making those on the default rate subsidize others and increasing their own costs.¹

3. How can I tell if I'm on the Rate of Last Resort?

To determine if you are on the Rate of Last Resort, examine your electricity bill. You will likely see "Rate of Last Resort" or "RoLR" explicitly stated in the electricity section of your statement.¹ Additionally, if your electricity bill is from a company with "regulated services" in its name, such as ENMAX Energy, EPCOR Energy Alberta, or Direct Energy Regulated Services, you are likely a RoLR customer.¹

4. What are the benefits of switching to a competitive fixed-rate plan?

Switching to a competitive fixed-rate plan offers several advantages.

It provides predictable monthly electricity bills, as your rate per kWh is locked in for the contract duration, protecting you from sudden market price spikes.⁵ Many competitive retailers, including Big Rock Power, often offer lower rates than the RoLR and may provide additional benefits such as no exit fees, budget billing options, and consolidated utility statements, allowing for better financial planning and peace of mind.⁵

5. Is it difficult to switch electricity providers in Alberta?

No, switching electricity providers in Alberta is designed to be a simple process. There are typically no fees or penalties for leaving the Rate of Last Resort.⁵ When you switch, only your energy retailer changes; the company that physically delivers electricity to your home or business (the distributor) remains the same, ensuring no interruption to your service.⁸

You simply choose a new retailer, and they manage the transition on your behalf. Resources like the Utilities Consumer Advocate (UCA) website are available to help compare different plans and providers.⁵

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The Alberta Electricity Rip-Off: Why Your "Safe" Rate is Costing You a Fortune. Introduction: The Illusion of Safety

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