Energy and Environmental Policy Trends: The Regulated Rate Option Trap

These retailers can also offer floating rates but the more popular offering tends to be a fixed rate, where The catch is: some of those who benefited from the cap can flee the RRO and your price for every kilowatt-hour is set for the next 1 to 5 years. [...] This them when it comes to repaying the cost of the recent price cap? added cost will make competitive rates more attractive, increasing the incentive to leave the RRO for those who are able to make the switch. [...] If these households are forced to remain on the RRO rate due to credit barriers while others leave, the repayment of the $200 million cost of the cap falls squarely on those who can least afford it, doubling the cost recovery adder imposed on a dwindling base. [...] Second, if the current exodus from the RRO continues, government will likely have no choice but to cover the entire cost of the cap. [...] Backstopping with taxpayers’ money will be the only option to avoid a spiral where the The first reason some households have remained on the RRO is that people are generally Albertans who can least afford it are paying the $200 million cost.