Due to changes in prices in the wholesale electricity market, the default rate will rise to 11.28 cents per kWh for the month of August. This rate applies to all Calgary households and small businesses that have not chosen a fixed priced energy plan with a retail supplier.
As a result, on August 1, 2007 the bill for a typical Calgary household (using 625 kWh per month) will increase by 9.6 percent compared with the previous month to $106.24.
Consumers who have chosen a fixed priced energy plan will not be affected by this price change.
What can customers do?
Customers have options regarding their energy bill. They are:
- Choose to do nothing and receive the default rate, which may fluctuate each month.
- Choose an energy plan that can offer control over energy costs and fixed prices over longer terms. Information on these is available at www.ucahelps.gov.ab.ca, or call 310 4822.
What is the default rate?
The default rate is also known as the Regulated Rate Option (RRO). It applies when no choice is made by a consumer. The owner of the local distribution system is required by legislation to provide the RRO to eligible customers (residential and small commercial customers who consume less than 250,000 kWh of electricity each year) in their service area. ENMAX Power is the local distribution company in Calgary and fully supports the competitive market for electricity and consumers' rights to choose their own energy plan. Anyone who has not chosen to enter into an energy plan with a retail supplier receives the RRO by default.
The default rate is calculated each month from prices in the wholesale electricity market using a process approved by the Alberta Electric Utilities Board. Forty percent of the rate comes from purchases made from sellers into the wholesale electricity market of supply contracts for the month of August and the remainder comes from longer-term purchases made at market prices. The August increase can be attributed in large part to higher price levels for August electricity contracts.
As of July 1, this default rate reflects a higher percentage of shorter-term market prices in accordance with provincial government regulations introduced in 2006. This could potentially cause the default rate to fluctuate more than it has in the past. Prices change with the energy market, depending on changing weather, seasonal consumption demands and fuel costs such as natural gas prices. A new price for the default rate is set each month that reflects current market price conditions.
This change in regulation increases the importance of consumers examining their own energy cost control choices.
ENMAX Power Corporation, a subsidiary of ENMAX Corporation, and its predecessors have provided Albertans with safe and reliable electricity for more than 100 years. One of the most reliable urban utilities in Canada, ENMAX Power owns, operates and maintains the distribution and much of the transmission network in and around Calgary. Most of ENMAX Power’s activities are regulated by the Alberta Energy and Utilities Board. The non-regulated subsidiaries managed by ENMAX Power provide engineering, procurement, construction and maintenance for the electrical servicing of residential and commercial developments and LRT (light rail transit) systems as well as fiber optic networks for high speed data and internet communications. For more information, visit our website at enmaxpower.com.