Premier Danielle Smith has unveiled steps the Province will be taking to ease the burden of electricity rates for Albertans.

First, they'll be renaming the default Regulated Rate Option (RRO) to the "Rate of Last Resort."

Albertans are automatically placed on the RRO if they choose not to purchase utilities through a fixed or competitive rate contract.

Smith explained that the current name could be misleading to energy consumers.

"A significant percentage of Alberta families, businesses, and farm operations get their electricity this way, but calling it the 'Regulated Rate Option' is misleading. It makes it sound stable and predictable when the truth is it's exactly the opposite. The power rate swings wildly from month to month depending on the weather and what's going on in the world. It can be relatively affordable during one part of the year, and crushingly expensive in another." 

Spikes in electricity costs last year caused the average RRO price per kilowatt hour in 2023 to be 22 cents.

On top of the name change, the Province will require energy companies to provide clarity to customers.

"We'll also be requiring power providers to inform customers exactly what rate they're on and to advise them that they can leave for a competitive rate at any time they choose. We simply can't allow confusion about electricity billing to cause Albertans financial hardship," says Smith.

Providers will also have to share information on how to access the Utilities Consumer Advocate's resources.

Moving forward, default rates will also be set every two years as opposed to 120 days, as it is now.

Affordability and Utilities Minister Nathan Neudorf says this will protect those for whom the default option is the only option.

"In some rural areas, the default electricity rate may be consumers' only option to receive power. For those who have poor credit or other financial difficulties, such as seniors and other vulnerable populations, signing a competitive contract may not be possible. While we encourage all Albertans to move off of the Rate of Last Resort, we know that's not a possibility for everyone, and we are ensuring those people are also protected."

According to the provincial government, around 29 per cent of residential customers purchase electricity through the default electricity rate.

The Province plans to implement the changes starting in 2025.