In Alberta, customers can choose to buy electricity from a Regulated Retailer whose rates are set based on a government formula or a Competitive Retailer. Competitive Retailers are licensed by Alberta Government Services (AGS).
For consumers who have not chosen to sign a contract with the competitive supplier, the Regulated Rate Option (RRO) is available as a default supply option. Over the last 5 years, the formula used in calculating the RRO has gradually changed. On July 1 2010 the calculation will be based on 100% month-ahead projected pricing instead of a blend of short term and long term hedges.
Competitive electricity retailers will often purchase electricity for their customers through a combination of long-term or short-term contracts with the generation companies. They can also buy electricity directly from the wholesale spot market based on the published hourly price.
This allows consumers to get as close as possible to wholesale prices, which are often well below other competitive retail or RRO prices. For more information on Competitive Retailers in Alberta visit the Utilities Consumer Advocate’s website.