By Cameron Mitchell
Solution 105 Consulting Ltd.
‘Tis the season to relax by a warm fire and reflect. Wishing you and your family all the best as we head into 2022.
2021 saw electricity rates soar, and yet a few good retail offers are still available. Hopefully, everyone has changed from their floating electricity rates by now! November electricity rates came in at about 10.5 cents per kWh for the month. December and January forward rates suggest those months’ will be coming in at around 11 cents per kWh and 10 cents per kWh respectively. 2022 is expected to come in around the 10 cents per kWh range. As forward rates are looking expensive, we would highly recommend locking in a fixed electricity rate for your homes if you have not done so already.
Floating natural gas rates have softened a little and are now expected to come in around $3.30/GJ for December and January.
Natural Gas Only:
- Floating rate:
- Get onto Direct Energy REGULATED Services. DERS. This is the default, no retailer rate.
- Fixed rate:
- Encor by EPCOR: $4.09/GJ on a two-year plan. Admin of $7.00 per month. Free termination.
- EasyMax by Enmax has a $4.09/GJ option. Rates stable for up to 5 years. $7.10/month admin. Free termination
- EasyMax by Enmax has a 6.89 cents/kWh option. Rates stable for 5 years. $7.10/month admin. Free termination.
AT MY HOUSE
I was on the ATCO “Three for All” offer. This offer is ending and had me paying 3 cents per kWh for electricity and $3/GJ for gas. I was able to get a three-year renewal offer from ATCO for 5.99 cents per kWh and $3.99/GJ (and an admin fee of $6.99 per meter per month).
If I didn’t have this plan in place, 100% go with the five-year EasyMax by Enmax plan for electricity as soon as possible and likely float with Direct Energy REGULATED Services for gas starting January 2022.
The residential retailer offers we have seen are now no better than $4.09/GJ. Short term pricing has softened considerably over the last short while and now sits in the $3.30/GJ range, and longer-term pricing is very close to $3.00/GJ. So, for gas, we recommend going with Direct Energy REGULATED Services (DERS)… remember “Regulated Service”. If you are not with these guys now, you will automatically go there if you terminate your current gas contract. Make sure there are no termination fees! There may also be a small enrollment fee to get on with DERS.
For December, the Direct Energy Regulated Services (“DERS”) default rate is quite high, at $4.936/GJ. Approximately $0.10/GJ of this figure is to recoup for previous undercharges. January’s DERS rate is likely to come in much lower however – likely around $3/GJ. With that in mind, we would recommend floating with DERS starting January 2022. Index offers from most retailers add around $0.30/GJ or more for fees to the floating rate. As DERS fees are closer to $0.08/GJ.
As noted previously, I am on a fixed rate product. Since the forward market is suggesting rates that are higher than the current retail offers available, we would highly recommend moving to a fixed rate offer if you are not already there.
Forward pricing currently suggests index residential rates will come in around 10 cents per kWh in November and 11 cents per kWh for December. October averaged about 10 cents/kWh. At this point, the forward market rates suggest the 2022 calendar year could average around 10 cents per kWh.
If I were to pick an electricity only option today, the 6.89 cents per kWh five year term EasyMax by Enmax is the one I’d go with. It has a $7.10/month admin fee, and free termination.
Just to help put things into perspective, all that we are talking about here is the commodity rates and costs, not the delivery and other regulated charges. An average house might use around 9,000 kWh and 100 GJ over a year.
And for those of you who are not residential users, and maybe a bit bigger, give us a call. We are no longer seeing better electricity pricing for commercial users compared to residential users, but we can still help get the lowest rates for your business. We are still seeing larger commercial gas rate options that are better than the residential and small business options noted above.