Alberta’s residential and commercial customers will receive a $150 rebate to offset winter electricity costs that averaged more than 16 cents per kilowatt-hour (kWh) in January and February 2022. Few details are yet available, but provincial government officials indicated yesterday that the rebate will likely take form as a three-month $50 discount on future hydro bills.
Dale Nally, Alberta’s Associate Minister of Natural Gas and Electricity attributes the upward spike in electricity prices to “market conditions” and policies of the federal and former provincial governments. That’s presumably due to a combination of climbing oil and gas prices and the carbon tax, which flow through more noticeably in Alberta’s higher quotient of fossil-fuel-fired electricity generation.
The Alberta Utility Commission’s one-year overview of monthly regulated prices shows rates are 43 to 44 per cent higher for residential and commercial consumers in Edmonton and Calgary in March 2022 compared to March 2021. The province’s two major utilities, EPCORR and ENMAX are charging regulated rates upwards of 10.5 cents/kWh this month versus in the range of 7.4 cents/kWh one year ago.
“As our government works hard to responsibly manage system costs, we are also working tirelessly to increase generation investments to bring new supply on to the market,” Nally pledges.
From a commercial real estate perspective, industry analysts suggest the electricity cost shock could actually herald better times ahead.
“Virtually all of the largest oil sands producers are on a net-zero path at the same time Alberta is expected to lead Canada in the growth in the renewable energy,” Paul Morassutti, vice chair, valuation and advisory services with CBRE Canada, observed in conjunction with the recent release of his firm’s 2022 market outlook report. “When you combine the responsible oil production with $90 oil and a simultaneous pivot to cleantech and renewables, the outlook for Alberta looks much better than it has for years.”
