Retail Market Review Committee
January 30th RETAIL MARKET REVIEW UPDATE:
Government moves to protect electricity consumers
Edmonton... Increased scrutiny of new power line costs and less volatility in month-to-month electricity prices will mean greater protection for Alberta electricity consumers.
“We recognize that Albertans are concerned about all of the charges on their electricity bills,” said Ken Hughes, Minister of Alberta Energy, in announcing these changes. “We are taking thoughtful, co-ordinated steps to ensure the best of both worlds: protection for consumers, and market forces to keep costs down.”
To increase scrutiny, the Alberta Utilities Commission (AUC) will have greater authority to review costs associated with new power lines. The AUC will receive more information sooner in the process, so it can better ensure that all costs are justified. As well, the burden of proof will shift. Transmission companies will be required to prove that all costs are reasonable instead of consumers being forced to challenge costs they believe are unreasonable.
To further protect consumers, Hughes is asking the AUC to determine the best process to pay for new transmission lines over the long term, to minimize cost impacts on monthly bills.
The decision to move on transmission costs runs parallel to government's response to a report from the Retail Market Review Committee. The committee's mandate was to look at the regulated rate option and the overall competitiveness of the retail market. The 391-page report contained 41 recommendations. Government is acting immediately on two recommendations, rejecting six and accepting 33 in principle.
A key recommendation being implemented immediately will reduce month-to-month price volatility for consumers by improving rules around how regulated rate providers purchase electricity. Currently, providers can only purchase power 45 days in advance for the regulated rate option. The province will extend that to 120 days to bring more stability and predictability to the marketplace. Extending the purchasing window allows providers to average prices over a longer period of time so the effects of severe weather or short-term plant shut-downs will be smaller.
The government has rejected all six recommendations associated with eliminating the regulated rate option. “Almost 65 per cent of Albertans choose the regulated rate option, and we respect that choice,” said Hughes. “This government will not force consumers to sign contracts.”
The 33 recommendations accepted in principle are focused on giving consumers better retail choices and greater information, protecting vulnerable Albertans and strengthening consumer advocacy. One of the recommendations is to make the Utilities Consumer Advocate an independent agency, with greater capacity to advocate on behalf of Albertans. An MLA team will further consult with stakeholders and determine how best to implement this and other remaining recommendations.
The committee also recommended lifting the freeze on applications for new distribution charges, and Hughes has requested that the AUC do so. The province asked the AUC to freeze the rates last year. Applications will need to go through the AUC process to ensure any distribution costs charged to consumers are reasonable and levied fairly.
For additional information about the Retail Market Review, visit the Alberta Energy website (www.energy.alberta.ca/RetailPlan.asp).
Media inquiries may be directed to:
PDF COPY BELOW OF: COMMITTEE RECOMMENDATIONS AND GOVERNMENT RESPONSE
Update from RMRC web site - September 2012:
Retail Market Review Committee
Retail Market Review Committee Survey and Questionnaire results;
On September 6th, Alberta’s Energy Minister Ken Hughes issued a statement in response to receiving a report by the Retail Market Review Committee (RMRC). Mr. Pound, chair of the RMRC, thanked members, stakeholders and the public for their contribution.
We will post information once a response is made by the Government. SEE UPDATE - JANUARY 30TH
On March 22, Ministerial Order 32/2012 was issued, which established a committee to review the retail electricity market in Alberta.
On February 23, Premier Redford introduced a four-point plan to help address both the volatility and costs associated with electricity.
The plan includes:
- A review of the variable, regulated rate option by an independent panel. The panel will review the variable rate option to reduce volatility and costs. As part of the review, the Utilities Consumer Advocate (UCA) will represent consumers' interests. The UCA’s mandate in this process is to ensure the costs associated with electricity are just and reasonable for consumers.
- A request that the Alberta Utilities Commission freeze ancillary costs included on Albertans' power bills including distribution, transmission, rider and administration charges until the completion of the review.
- A request that the Alberta Utilities Commission continue its work on performance based results, which will serve as an incentive for industry to find efficiencies with electricity distribution. Efficiencies will be passed on to the consumer through lower prices.
- An amendment of the regulations affecting deposits for energy marketers and fixed-rate contracts to ensure more options are available for consumers who need them.
For more information visit their web site: RETAIL MARKET REVIEW COMMITTEE