New Choices for Consumers Urged in a Report on the Alberta Electricity Market

Washington, DC … The Government of Alberta has released a comprehensive report on the Alberta retail electricity market. DEFG Managing Partner, Nat Treadway, was a member of the independent Retail Market Review Committee (RMRC) and contributed to the report. The RMRC’s mandate was to look at the “regulated rate option” (default service) and the overall competitiveness of the retail market.

The report recommended phasing out default service by 2015. Six recommendations on this topic were rejected by government because, “Almost 65 per cent of Albertans choose the regulated rate option, and we respect that choice,” according to Minister Hughes.

Recommendations rejected today will arise again as people switch away from a government-constrained rate.

Nat Treadway, Managing Partner, DEFG

Among the report recommendations embraced by Government was the decision to immediately reduce month-to-month price volatility for consumers by improving rules around the purchase of electricity. Currently, providers of the “regulated rate option” must purchase power 45 days in advance of a target month. Extending this to 120 days will bring more stability and predictability to the marketplace. The Government will also give the Alberta Utilities Commission greater authority to review costs associated with new power lines.

Thirty-three other recommendations were accepted in principle. These address such things as giving consumers better retail choices and greater information, protecting vulnerable Albertans and strengthening consumer advocacy. One recommendation would make the Utilities Consumer Advocate an independent agency to better advocate on behalf of Albertans.

Among the issues advocated by Treadway was an expansion of consumer choice for prepaid energy services. Prepaid billing is currently prohibited in Alberta, but experience with prepayment shows that it delivers convenience, control and energy conservation for retail consumers.

“Alberta is one of the leading competitive electricity markets in North America,” said Treadway, who is the author of the Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS). “The plan of action outlined by Minister Hughes is good news for Albertans because any movement to reduce barriers to entry in markets will increase investments as new players seek opportunities. Recommendations rejected today will arise again as people switch away from a government-constrained rate. People will find better pricing options in the market place.”

Download the report here: http://defg.local/publication/alberta-retail-market-review-committee/

DEFG is a management consulting firm specializing in energy. We believe that customers are the future of energy. Since 2003, we have helped clients create value in a commodity marketplace. In our rapidly changing marketplace, customer engagement is key to success, and our clients learn to better engage with residential and commercial customers. These customers provide unique resources, reduce risks and increase revenue potential.

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