Otis Singleton
In Alberta, electricity prices are set hourly, and customers have a choice of energy retail service providers and can choose between a fixed-rate contract, a variable-rate contract, or the default rate. The default rate, also known as the Rate of Last Resort (ROLR), is a regulated option available for those who consume less than 250,000 kWh/year. This rate is set by the Alberta Utilities Commission (AUC) and changes every two years. Competitive fixed-rate plans offer stability, while floating rates can experience price spikes but may also be cheaper than fixed rates at certain times. The Carbon Tax price, applied to electricity generators as the main emitters of CO2 emissions, is also expected to impact energy prices in the future.
| Characteristics | Values |
|---|---|
| Electricity rate options in Alberta | Fixed rate, variable rate, default rate, competitive floating rate, and Rate of Last Resort (RoLR) |
| Regulated rate options | Available for those consuming less than 250,000 kWh/year; rates set by the Alberta Utilities Commission (AUC) and change every two years |
| Competitive fixed-rate plans | Rates are set at the beginning of the contract and remain the same for the length of the energy term (usually 1, 3, or 5 years) |
| Competitive floating-rate plans | Energy charges are based on the average pool price for the previous month or pay period; rates change every hour |
| Carbon Tax price | Currently $65 per tonne of CO2, expected to rise to $170 per tonne of CO2 by 2030 |
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What You'll Learn
Fixed-rate, floating rate, and default rate plans
In Alberta, customers have a choice of energy retail service providers and can choose from fixed-rate, floating-rate, and default-rate plans. The default rate is called the Rate of Last Resort (ROLR). The ROLR was previously known as the Regulated Rate Option (RRO). The energy charge on your bill is determined by how much electricity you use (measured in kilowatt-hours or kWh) and the price for that electricity, which is derived from the open and competitive electricity market.
The ROLR is only available for those who consume less than 250,000 kWh per year. It is the default option for customers who do not choose to purchase a contract from a competitive energy retailer for their electricity. Many Albertans appreciate the simplicity and ease of purchasing the ROLR, as well as the peace of mind from knowing that rates are approved by a government-appointed body. However, the ROLR is not necessarily the cheapest option, and customers may prefer choosing a competitive energy retailer for superior customer service or to support a cause that they believe in.
Fixed-rate plans give you a single, guaranteed rate for your electricity or natural gas that won't change, regardless of what the energy market is doing. Fixed-rate terms usually last 1, 3, or 5 years. In times of sudden rate increases, fixed rates can bring predictability to your budget. For example, if you are under a 9.89¢/kWh fixed-rate contract for three years, even if floating rates go above 30¢/kWh, you will still pay 9.89¢/kWh month-to-month.
Floating rates can experience price spikes, but there are times when they are cheaper than fixed-rate options. For example, the average floating rate in Alberta for September 2024 was 5.251¢/kWh, while the fixed-rate average was 9.273¢/kWh. Floating rates can be advantageous for customers who are looking to pay the lowest prices possible and can handle a bit of variation in their monthly utility bills.
It's worth noting that while all competitive energy retailers offer fixed power rate contracts, fewer retailers offer floating rates for electricity. Most Albertans who purchase retail energy contracts choose fixed-rate electricity contracts. However, smaller, Alberta-based retailers that sell electricity at floating rates may offer more competitive prices than larger competitors and may have more rigorous green energy offerings.
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Energy rates charged per kilowatt-hour (kWh)
In Alberta, electricity prices are set hourly, but this doesn't mean that everyone is charged based on the pool price. The way electricity is purchased can directly impact how frequently electricity prices change. There are three ways to purchase electricity in Alberta: the Rate of Last Resort (ROLR), a competitive fixed-rate plan, or a competitive floating rate plan.
The ROLR is the default regulated service option, which is only available for those who consume less than 250,000 kWh/year. The rate is set by the Alberta Utilities Commission (AUC) and changes every two years. The AUC also determines transmission and distribution rates for specific providers through a detailed review process.
The competitive fixed-rate plan is set at the beginning of the contract and remains the same throughout the energy term, usually lasting 1, 3, or 5 years. Regional Energy, for example, offers a low 5-year fixed electricity rate of 8.89¢/kWh.
The floating rate, on the other hand, is based on the average pool price for the previous month or pay period and changes every hour. While floating rates can experience price spikes, there are times when they are cheaper than fixed-rate options. For instance, in September 2024, the average floating rate in Alberta was 5.251¢/kWh, while the fixed-rate average was 9.273¢/kWh.
It's important to note that choosing between a fixed or floating rate depends on personal preference and risk tolerance. The carbon tax also influences energy rates, with electricity generators paying the carbon tax as they are the main emitters of CO2 emissions. As the carbon tax price increases, production costs for power plants go up, leading to potential increases in energy rates.
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Carbon tax charges
Alberta has had a carbon tax since 2020, which puts a price on carbon emissions in the province. The tax is levied on the carbon content of fuels at the provincial level, with the current rate at $65 per tonne of CO2. This rate is set to increase annually at a rate of $15 per tonne from 2023 to 2030, when the price is projected to be $170 per tonne of CO2.
The carbon tax in Alberta is applied to natural gas consumers as part of the delivery charges on their monthly bill. As of April 2025, the carbon tax in Alberta adds 3.3₵/L to gasoline consumption, $2.86/GJ to natural gas usage, and 2.32₵/L to propane consumption. These charges will increase to a total of 24.2₵/L for gasoline, $5.52/GJ for natural gas, and 17.03₵/L for propane by April 2026.
The revenue generated from the carbon tax is reinvested into the Alberta economy in several ways. This includes carbon rebates, also known as Canada Carbon Rebates, to eligible Canadians, as well as support for sectors affected by the tax, such as schools, hospitals, small and medium-sized businesses, colleges and universities, municipalities, Indigenous communities, and non-profit organizations. In the first four fiscal years of the carbon tax in Alberta, approximately $610 million was raised.
The introduction of the carbon tax in Alberta, as well as in other provinces, is part of federal commitments to combat climate change and adhere to the Paris Agreement. While there has been some political resistance to the tax, the Supreme Court of Canada ruled in 2021 that the Greenhouse Gas Pollution Pricing Act, which includes the carbon tax, is constitutional.
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Regulated and competitive retailers
In Alberta, electricity customers have a choice of energy retail service providers. They can choose between a fixed-rate contract, a variable rate contract, or the default rate. The default rate is typically provided by the default regulated service provider, and the customer is charged the Rate of Last Resort (ROLR). The distributor of electricity is regulated by the Alberta Utilities Commission (AUC), which determines transmission and distribution rates for specific providers.
The AUC represents residential, farm, and small business customers in the review process. The distributor will not change from one retailer to the next for a given site or location. The physical delivery of electricity is provided by the distributor and remains the same regardless of whether a customer chooses the regulated rate option or purchases energy through a competitive retailer.
In Alberta, there are three ways homeowners can purchase electricity: via the Rate of Last Resort (ROLR), the regulated option; via a competitive fixed-rate plan; or via a competitive floating rate plan. The ROLR is the default rate for customers who do not choose a retail contract for service. The regulated option is only available for those who consume less than 250,000 kWh/year.
Regulated rates change every two years and are set by the AUC. Competitive fixed-rate plans are set at the beginning of the contract and remain the same for the length of the energy term, usually 1, 3, or 5 years. Floating rates are based on the average pool price for the previous month or pay period, and they change every hour. While floating rates can experience price spikes, there are times when they are cheaper than fixed-rate options. For example, the average floating rate in Alberta for September 2024 was 5.251¢/kWh, while the fixed-rate average was 9.273¢/kWh.
The choice between fixed and floating rates depends on personal preference and risk tolerance. Regulated and competitive retailers are likely to raise their rates in response to increased Carbon Tax prices, which will lead to higher production costs for power plants.
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Comparing electricity rates in Alberta
In Alberta, electricity prices are set hourly, and customers have a choice of energy retail service providers. The three main ways homeowners can purchase electricity are: the Rate of Last Resort (RoLR), the regulated option; a competitive fixed-rate plan; or a competitive floating rate plan.
The RoLR is only available for those who consume less than 250,000 kWh/year. The regulated option has been consistently higher than the competitive options over the past couple of years, and these rates change every two years. They are set by the Alberta Utilities Commission (AUC).
The floating rate changes every hour, based on the average pool price for the previous month or pay period. For example, the average floating rate in Alberta for September 2024 was 5.251¢/kWh. By comparison, the fixed rate average was 9.273¢/kWh. Floating rates can experience price spikes, but there are times when they are cheaper than fixed-rate options. Fixed-rate terms usually last 1, 3 or 5 years.
Regional Energy offers a low 5-year fixed electricity rate in Alberta at 8.89¢/kWh, with no cancellation fee.
The Carbon Tax is also an important factor in electricity rates in Alberta. The current price is $65 per tonne of CO2, and this is applied when carbon is created and emitted. By 2030, the price is projected to rise to $170 per tonne of CO2. This will lead to higher production costs for power plants, which will likely be passed on to customers in the form of higher energy prices.
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Frequently asked questions
In Alberta, there are three ways to purchase electricity: the Rate of Last Resort (RoLR), a competitive fixed-rate plan, or a competitive floating rate plan. The RoLR is the regulated option, and is only available for those who consume less than 250,000 kWh/year.
Electricity prices in Alberta are set hourly, but not everyone is charged based on the pool price. The energy charge on a floating rate plan is based on the average pool price for the previous month or pay period, and changes every hour. Fixed rates, on the other hand, are set at the beginning of the contract and remain the same for the length of the term, which is usually 1, 3, or 5 years. As of April 2025, the average floating rate in Alberta is 5.251¢/kWh, while the fixed rate average is 9.273¢/kWh.
Choosing between a fixed and floating rate plan depends on personal preference and risk tolerance. Floating rates can experience price spikes, but there are times when they are cheaper than fixed-rate options. Fixed rates offer more stability and can protect against price spikes, but may be more expensive at certain times.
