Flexible Averaging Agreement Alberta

As a resident of Alberta, Canada, you may have come across the term “Flexible Averaging Agreement” or FAA in discussions about electricity rates. In this article, we will explore what FAA is, how it works, and its benefits for the residents of Alberta.

An FAA is an agreement between a consumer and their electricity provider to average out their electricity consumption over a period of 12 months. This means that instead of paying the current rate for the amount of electricity used each month, the consumer pays an average rate based on their historical usage patterns.

So how does it work? First, the consumer and their electricity provider agree on a set amount of electricity to be consumed over the 12-month period. This amount is based on the consumer`s historical usage patterns and is set to avoid overconsumption or underconsumption.

Second, the FAA is calculated by taking the total cost of the electricity used over the 12-month period, dividing it by the set amount of electricity, and then dividing that by 12. This results in a stable, predictable electricity bill each month, even if the consumer`s usage varies from month to month.

The benefits of FAA may not be immediately apparent, but they can be significant. One of the main benefits is budgeting stability. The FAA allows consumers to predict their electricity costs and plan accordingly, making it easier to budget for other household expenses.

Additionally, FAA benefits the environment by encouraging consumers to use electricity more efficiently. Since they are paying an average rate, there is no financial benefit to overusing electricity. This, in turn, reduces the demand for electricity, which can lead to less reliance on fossil fuels and a reduction in greenhouse gas emissions.

Furthermore, the FAA can be particularly helpful for those who use electricity for heating during the winter months. With the FAA, consumers can avoid the shock of a high electricity bill during the winter months when energy usage tends to be higher.

In conclusion, the Flexible Averaging Agreement is a great option for Alberta residents looking for a stable and predictable electricity bill. Not only does it benefit the household budget, but it also encourages energy efficiency and can help reduce greenhouse gas emissions. If you are interested in FAA, be sure to speak to your electricity provider for more information.