Electricity rates are not created equal across the wide nation of Canada. While residents in some areas experience lower and more reasonable rate levels, others pay extensively for the one of life’s most important and necessary products. Most Canadians use electricity for practically everything they need to live comfortably, and especially when they rely on electricity to heat their homes. Even as recently as 2013, Canadians were paying much higher prices than they do today in all regions. But the 2019 outlook is much more favorable than in the past. The reduction and stabilization of electric rates in Canada is largely due to enormous growth in natural gas reserves that can be used to power electric plants, which in turn lowers wholesale prices to local electricity providers. It also sets the stage for the Canada Electricity Association to act with respect to rate caps based on supply and demand conditions. The current price predictions bode well for many Canadians with respect to how electric bills will impact household budgets, and especially for certain customers in Edmonton.
How Electricity Rates are Set in Canada
Electric usage charges differ among certain areas and entities in Canada. Residential customers pay retail according to time-of-use while businesses pay a variable wholesale rate based on business size set in association with their regional location. The IESO evaluates electricity needs by predicting demand in an ongoing pattern for each week of the year. This provides a real-time account of electricity needs within the country, with Ontario being the origination point of wholesale price determination for large customers. Retail prices then ripple as electricity is provided to other regions for residential customers according to the price caps established per region.
What This Means for Edmonton
This fluid process of determining electric rates works well for the residents of Alberta, with Edmonton being a central province location. Electric rates for Edmonton are largely considered as the rock-bottom for the most part, as customers pay an average of $4 per day for electricity. Of course, this rate varies across the board with respect to the individual need for electricity, but on average Edmonton residents fare better than other regions of the nation. And, with the expectation of stable pricing for the upcoming year at least,electricity rates in Edmonton are being even further stabilized by the rate lock agreements being offered by local power suppliers. The plans extend from between two and five years, and they will set the price in Edmonton at 6.59 cents per kilowatt hour for the foreseeable future for residential customers. Those who do not enter into an agreement will still see reasonable rates comparative to this base price.
This outlook is indeed a positive for all electricity customers in Edmonton as well as the whole of Alberta. Businesses and households alike can plan their monthly household budgets assured their electricity rates will not be in jeopardy of significant increase at least for the short-term. In addition, the long-term forecast appears to be favorable as well for the year and possibly up until 2030 if current market conditions on the supply side stay consistent.