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Alberta’s electricity market stands at a pivotal turning point. On January 1, 2025, the province introduced the Rate of Last Resort (RoLR), replacing the long-standing Regulated Rate Option (RRO).
This transformation represents more than just a change in terminology—it’s a fundamental shift in how businesses access and pay for their electricity. While the RoLR is marketed as a stable alternative, it introduces new uncertainties that could lead to higher costs and less flexibility for consumers.
Understanding these changes is essential for business owners and energy managers to make informed decisions about their organization’s energy future. Let’s explore what the RoLR means for your business and how you can navigate this transition to ensure the most cost-effective energy strategy.
The Rate of Last Resort (RoLR) may seem like a fallback option in Alberta’s evolving energy market, but it comes with significant limitations. Unlike the Regulated Rate Option (RRO), which adjusts monthly based on market conditions, the RoLR is a fixed rate set for two-year periods—offering minimal flexibility and responsiveness to market changes for those that are concerned about prices going down and a relatively high price with a short term for most businesses that are concerned about prices going up.
At the end of each term, RoLR rates can increase by up to 10%, creating the risk of steadily rising costs over time.
An additional feature, not widely discussed, compounds this issue: the rate can be reopened and adjusted before the two-year term is complete. This means that even the “fixed rate” structure isn’t guaranteed if the regulator deems adjustments necessary. And let’s be honest—such changes are far more likely to result in increases rather than decreases, further exposing consumers to rising costs.
Additionally, the Utilities Consumer Advocate (UCA) will provide a “free” 90-day checkup to remind you of your rate options and encourage you to explore competitive alternatives. There’s no penalty for leaving the RoLR at any time, making it clear that you’re encouraged to consider better options outside of this default rate.
Consider these factors:
You’re not alone in this transition. The change affects:
Your fellow business owners (29% of commercial customers)
Local farmers (40% of farm customers)
Residential neighbors (26% of households)
If these groups remain on the RoLR, each faces unique risks, including higher-than-expected costs or lost opportunities for better rates in the competitive market. Understanding these changes is important for making informed decisions.
As a business owner or manager navigating Alberta’s evolving electricity landscape, your journey toward optimal energy management begins with thoroughly evaluating your current position, including a detailed analysis of existing energy costs, consumption patterns, and future growth projections.
By carefully examining the RoLR rates alongside competitive market offerings, you can develop a comprehensive long-term energy strategy that considers your bottom line and risk tolerance while ensuring price stability for your operations.
The transition doesn’t have to be overwhelming – our energy management expertise at DNE allows us to provide personalized guidance through this change, offering in-depth analysis of your specific business impacts, detailed energy usage assessment, and tailored solutions that align perfectly with your organizational objectives.
We’ll work alongside you to ensure a smooth transition that maximizes your energy efficiency while minimizing costs in this new regulatory environment.
Now is the ideal time to start planning your energy strategy. Whether you’re currently on the default rate or considering your options, taking action now can help you secure the most advantageous position for your business. Don’t leave your organization exposed to unexpected rate increases or missed opportunities in the competitive market.
Don’t let these changes catch you unprepared. Our energy experts at DNE are here to help you understand these changes and find the best path forward for your business. Contact us for a no-obligation consultation to:
The shift to the Rate of Last Resort represents more than just a change in pricing structure—it’s an opportunity to reassess and optimize your energy strategy. Let us help you turn this transition into an advantage for your business.
Reach out to our team today to start your journey toward energy certainty. Together, we can ensure your business is well-positioned for the upcoming changes while maintaining focus on what matters most: your business’s success.
The Alberta Provincial Government implemented electric price caps
Legislated an accelerated departure from coal generation plants
Coal generation dropped from 47% of power generation in 2018 to just 17% by 2022
During 2017, electricity prices were around 2.88 cents per kilowatt-hour (kWh).
Fast forward to December 2022 when floating rates reached ¢37.464/kWh, a historic high.
Electric bills in Alberta reached an unprecedented high of 29 and 33 cents/kWh
The Provincial Government introduced new legislation to address the crisis
By early 2024, Alberta completed its coal phase-out, decades ahead of the original 2026 target
January 1, 2025: Implementation of the Rate of Last Resort
Fixed rates will be set for two-year terms
Maximum rate changes capped at 10% between terms
Expected stabilization is around 10 – 12 cents per kilowatt hour
