AB government cap on RRO was a scam

As you probably know, when you pay for natural gas or electricity, you either pay the market rate, or you pay a fixed rate according to a contract. When you are paying the market rate, you run the risk of highs but also benefit from low prices. whereas if you are on a fixed contract, the price you pay never changes until the contract is over. In Alberta, the market rate for electricity is known as the RRO, Or regulated rate option. The name is a bit misleading, because although it is regulated, it is not fixed. In 2022, depending on who you get your electricity from, you were paying anywhere from 10 cents per kilowatt hour all the way up to 24 cents per kilowatt hour. 

In 2023, the government of Alberta decided to do a huge favor for the people on the regulated rate option, by capping the rate at 13 and 1/2 cents per kilowatt hour for 3 months. There was much rejoicing. Unfortunately, the government left out a major caveat. People on the RRO Weren't actually getting a break at all. During the 3-month cap, the market price of electricity went as high as 33 cents per kilowatt hour. What a deal we were getting, except for one major detail. The actual market costs over and above the cap were being deferred, and will be paid back July to December 2023 and all of 2024. 

In other words, all the money that RRO customers saved, was just pushed off to another day. It gets worse. All the people who are not on a fixed plan have to pay that difference back. The continued high price of electricity (in July 2023, it’s estimated to be 28 cents per kilowatt hour) is scaring a lot of people into fixed cost plans. Although this is good for the people who can get accepted onto a plan, there are a lot of people who can't, because it requires a good credit rating among other things. So there are people on the regulated rate who are stuck there and they have to suck up the difference created by all of the people who are escaping to fixed rate plans. That's right, every person who leaves the RRO plan is leaving their share of the debt created by the cap for the rest who can't leave. 

So the next time you hear the Alberta Government bragging that it only has the best interests of its residents at heart, remember that while they are encouraging people to get onto a fixed cost plan, they are literally leaving those who can't afford to do so in the lurch.