Everything you need to know about the Rate of Last Resort

The Rate of Last Resort (RoLR) replaced the Regulated Rate Option (RRO) in January 2025. The RoLR impacts an estimated 26% of Albertans who now pay over 12 cents/kWh for electricity. This is a significant jump for many Albertans who were paying under 10 cents/kWh at the end of 2024.

But what many Albertans don't know is that there are better options — and easy ways to compare electricity plans and providers so that you're not stuck with the default electricity rate.

Here's everything you need to know about the Regulated Rate Option and what you can do about it.

What is the Rate of Last Resort (RoLR)?

The Rate of Last Resort (RoLR) is the default electricity option for consumers who do not choose a retailer. According to the Government of Alberta, this includes roughly 26% of residential customers who were previously purchasing electricity through the default Regulated Rate Option (RRO).

It's important to note that the RoLR is not just a name change (despite what some news outlets have said).

Rather, it’s a structural shift designed to encourage Albertans to move to competitive contracts while protecting against wild price spikes for people who have no other options. Albertans who are able to move to a lower rate from a competitive provider should do so as soon as possible.

How is the Rate of Last Resort different from the Regulated Rate Option?

The biggest difference between the Rate of Last Resort (RoLR) and the Regulated Rate Option (RRO) is how rates are calculated:

• RRO Rates (Ended Dec. 31, 2024): The RRO was adjusted monthly based on market forward prices. Being tied so closely to the market led to some painful spikes between 2021–2023 but also resulted in rates below a lot of fixed plans from utilities when rates were more favourable.
• RoLR Rates (Started Jan. 1, 2025): Introduces a two-year fixed rate of just over 12 cents/kWh (the rate varies slightly in different parts of Alberta, as noted below) with a maximum 10% adjustment during each renewal. While this rate acts as both a floor and a ceiling (guarding against unexpected price spikes), it’s far more costly than current rates offered by competitive utility providers.

Basically, both the RRO (managed by local providers and regulated by the Alberta Utilities Commission) and the RoLR are the go-to fallback option for those not on fixed or floating utility plans. But where the RRO fluctuated monthly based on market prices, the RoLR isn't subject to those same hills and valleys.

Rate of Last Resort differences by provider

You'll have a different default provider depending on which part of the province you live in. For example, ENMAX serves the Calgary area, whereas EPCOR is the default provider for Edmonton. Each default provider has a slightly different Rate of Last Resort, as follows:

• EPCOR Rate of Last Resort – 12.01 cents/kWh

• ENMAX Rate of Last Resort – 12.06 cents/kWh

• Direct Energy Rate of Last Resort – 12.02 cents/kWh

Regardless of provider, this fixed rate is big jump compared to the RRO rate at the end of 2024 (e.g., ENMAX's RRO rate was 9.907 cents/kWh at the end of November 2024).

Impact of the Rate of Last Resort on vulnerable consumers

The Alberta government has acknowledged that the RRO’s volatile pricing posed challenges for some groups, especially seniors, rural residents, and those with poor credit.

For example, electricity on the RRO spiked at 32.26 cents/kWh during August 2023.

With the Rate of Last Resort, they have introduced measures to stabilize rates and reduce price spikes, ensuring protections for consumers unable to sign competitive contracts. The RoLR ensures that high price spikes, like the one in August 2023, won't happen again.

Nevertheless, the RoLR’s high rate underscores the importance of securing a fixed or floating plan if possible.

What can you do about the Rate of Last Resort?

If you are currently on the Rate of Last Resort, consider switching to an electricity contract from a competitive retailer as soon as possible.

Blake Shaffer, an economist with the University of Calgary, told CBC during an episode of Alberta at Noon, “To be blunt, there’s zero reason for anyone to be on the Rate of Last Resort. Going forward, you can go out and get a fixed rate from a myriad of [companies] right now, anywhere from 7–10 cents.”

As you consider providers, think about what plan is best for your household. Your options include:

1. Fixed-Rate Plans: These plans lock in a stable price for 1–5 years. Compare utility plans and providers (Jotson can help!) and switch to a more favourable rate than the Rate of Last Resort.
2. Floating-Rate Plans: These tie rates to real-time market prices. Typically, your bills will be higher during winter months (when you’re using energy to stay warm) and summer months (when you’re using energy to stay cool) and cheaper in between.

Delaying a switch by even one billing cycle has already cost the average RRO household an additional ~$20 for electricity in January, according to Jotson app data.

Ready to switch to a more competitive rate?

Navigating rate changes can feel overwhelming, but Jotson makes it easier by providing:

• Expert guidance: We track rate trends and legislative changes, so you get alerted to situations like this before they happen.
• Tailored recommendations: We use your actual consumption data to compare utility rates so that you can find the best option for your household.
• Tips for switching: We can’t switch utility providers for you but we’ll make it as easy as possible for you to switch by providing you with step-by-step instructions.

Jotson even has a built-in contract comparison tool to help you spot which deal is right for your household. Learn more about our contract comparison tool here, or download the app if you're ready to start saving.