The Default Rate Tariff (DRT) in Alberta 

Natural gas competition began earlier than its electricity counterpart, starting in 1996, rather than 2001. All natural gas customers are able to choose between the Default Rate Tariff (DRT) and the numerous competitive options and their multiple types of contracts. 

The DRT in the Alberta natural gas market was designed as such that the market cost of the resource would be passed on to the retail customer. Most of the required natural gas is procured between one and two months ahead of the start of the delivery month. The volume is based on the low end of the forecast range, and the difference between the actual volume required and forecast is the nought in short-term markets. This hasn’t changed since it was created, as the regulated natural gas market hasn’t changed as much as the electricity market over the years. 

Until recently, the long-term competitive rates were significantly higher than the corresponding DRT natural gas prices for residential consumers.  

The difference between the DRT and the ROLR 

In Alberta, the Rate of Last Resort (ROLR) and the Default Rate Tariff (DRT) are, respectively, the regulated electricity and regulated natural gas options. Both are in place and designed to be a safety net for those who don’t have a competitive contract with an energy retailer in the province. Essentially, if you’re a customer who didn’t sign a contract for natural gas (or electricity), you’re served by the default regulated provider. 

A more detailed explanation with key differences would be: 

Default Rate Tariff (DRT) 

• Regulated natural gas rates for residential or small business consumers who do not have a competitive natural gas contract in the province. 
• It is a regulated rate that changes monthly based on market conditions.
• This rate applies only to those said customers who are not with a retailer. 

Rate of Last Resort (ROLR) 

• The ROLR is the regulated electricity rate for consumers who haven’t chosen a competitive electricity plan from a retailer. 
• It is a fixed rate that is set every two years and somewhat protected against sudden price spikes. 
• This applies to any residential or small business consumers/customers who are not on a competitive contract. 
• The ROLR replaced the Regulated Rate Option (RRO) as of January 1^st, 2025. 

What affects the Default Rate Tariff? How the DRT is determined  

The regulated rates are reviewed and approved by the Alberta Utilities Commission (AUC). It changes monthly, and these rates do not include any billing and delivery costs. The way the DRT is determined each month is that it is derived using a forecast of the next month’s gas cost based on market prices and projected demand. Differences between the actual and forecasted prices are flowed through to end-use consumers in subsequent months. 

The DRT is approved by the AUC, though there are gas co-ops if you live rurally enough that the other retailers don’t provide services, and these are non-profit entities whose members (owners) determine their own natural gas rates. All other utilities and municipalities have rate-setting processes regulated by the appropriate city councils and are not required to be approved by the AUC. 

DRT Providers in Alberta

For customers who are new utility customers, you may end up initially connecting services with a regulated retailer before considering other options and signing up with a competitive energy contract. The listed regulated retailers below are available in Alberta. If you live in a rural community and there are no regulated retailers near you that are available, you may be in the service territory of a Natural Gas Co-Op. 

There is more information available by calling the UCA Mediation Team if you have any questions. In Alberta, there are currently eight regulated retailers that provide natural gas at DRT pricing: 

• Apex Utilities 
• City of Lethbridge 
• City of Red Deer 
• Direct Energy Regulated Services 
• ENMAX Energy Corp. 
• EPCOR Energy Alberta GP Inc. 
• Town of Cardston 
• Town of Ponoka 

DRT rates in 2025 

DRT rates in 2024  

Pros and Cons of the DRT in Alberta 

The DRT can’t always offer predictable pricing against market volatility, but it can cost less when market prices are really low. 

Pros: 

• If market conditions are stable, prices can be lower than competitive natural gas plans.
• The DRT is a straightforward rate that makes it easier to understand for consumers and compare it with other options. 

Cons: 

• Potentially higher costs, especially if the current market trend is lower than the DRT. Consumers may end up paying a higher bill overall and more than they’d like when compared to a competitive fixed-rate plan. 
• Limited flexibility, as the DRT doesn’t offer the same level of flexibility as competitive fixed- or floating-rate plans that allow for different term lengths and rates. 
• The DRT doesn’t offer the same opportunities for bundling or incentives as competitive plans typically do. 
• While the DRT is regulated – it does still change monthly, so it’s not very predictable. This means that your rates may end up being much higher than if you were under a competitive fixed rate. 

The bottom line is that the DRT is a regulated, safe choice for a lot of Albertans who don’t want to (or can’t) deal with the large array of choices available in the market for competitive natural gas rates and just want to have a simple, regulated plan. It does come with its caveats as listed above, but it can also be advantageous depending on your risk tolerance as an energy consumer.