Direct Energy Regulated Services

Direct Energy Regulated Services

June 16, 2010 12:36 ET

Direct Energy Regulated Services Bust Myths About the Regulated Rate Option (RRO) for Electricity in Alberta

What Electricity Consumers in Alberta Should Know About the July 1, 2010 Change

CALGARY, ALBERTA--(Marketwire - June 16, 2010) - The Regulated Rate Option (RRO) is the rate for electricity that is automatically provided to all eligible customers who have not entered into a contract with a competitive electricity retailer; this rate is calculated and set at the beginning of each month. On July 1, 2006, a new formula to calculate the RRO went into effect. From 2006 to 2010, the RRO was based on a blend of long- and short-term market prices. Each year, the ratio of long- over short-term prices changes by 20 per cent. On July 1st, 2010, 100 per cent of the RRO will be calculated on short-term market prices.

Myth: The Regulated Rate Option (RRO) is being phased out and will not be available anymore. 

Fact: The RRO will still be available for any eligible Albertan who has not chosen to enter in to a contract with a competitive retailer. The RRO provider varies depending on where a customer resides and each provider uses a similar formula to set the rate. However, rates do vary from provider-to-provider as each have different cost and load requirements. To find out who provides the RRO in your territory, you can visit www.uca.gov.ab.ca and enter the name of your city/town.

Myth: Because of this ratio change, I will see an increase in regulated electricity rates.

Fact: Any increase or decrease in the RRO is a reflection of prices on the wholesale market and are not a result of the change in the ratio of long and short term pricing used in calculating the rate. As it does today, the RRO will still change every month and will be set according to projected month-ahead electricity prices as determined in the open market. If the market price increases, the RRO will rise. If the market price decreases, the RRO will fall. Since the current formula for calculating the RRO was introduced on July 1, 2006, average RRO rates have been more reflective of wholesale electricity prices.

Myth: I do not have the ability to choose who supplies my power; I'm stuck with the default option in my territory.

Fact: Alberta is an open and competitive electricity market; Albertans have the ability to choose who provides electricity to their homes and businesses. There are many competitive retailers in Alberta that offer a wide range of electricity products, from stable, fixed-price products where the price remains the same for the term of the agreement; to variable-priced products that float with the market; to a blend of fixed and variable; to green electricity products.

All of these products have different features and benefits to meet the needs of a variety of budgets, lifestyles and electricity consumption patterns. If customers would like to pursue alternative options, they may choose from a wide range of products offered by competitive retailers in the province. For more information about alternative electricity retailers and their product offerings, you can visit www.uca.gov.ab.ca.

Myth: The appearance of my bill will change and will become more difficult to understand.

Fact: For the most part, customers whose electricity is supplied by an RRO provider will not notice any change to the appearance of their bills. The only change that is occurring on July 1 is the ratio of long and short term pricing used to calculate the rate. As a result, consumers may see larger variations in the RRO rates from month-to-month.

"While customers should experience minimal impact with this change, it is always advisable to be informed about issues that can affect your energy bills and where to go for more information," said Gary Newcombe, vice president, government and regulatory affairs, Direct Energy. "We encourage any of our customers with questions or concerns about the change or about their statements, to contact us or their rate provider for more information."

About Direct Energy Regulated Services

Direct Energy Regulated Services is a regulated electricity and natural gas supplier in Alberta providing default supply services to eligible customers who have not chosen to enter a contract with a competitive retailer. Direct Energy Regulated Services serves nearly one million customers in Alberta and is responsible for supplying energy at the regulated rate, and for customer care and billing. To learn more about Direct Energy Regulated Services, visit www.directenergyregulatedservices.com

Contact Information

  • Direct Energy Regulated Services
    Lynzey MacRae
    Public Relations Specialist
    403.290.6775 or C: 403.826.3100
    403.266.6684 (FAX)