By Cameron Mitchell
Solution 105 Consulting Ltd.
“THE LEAVES ARE CHANGING”
Hopefully, everyone has changed from their floating electricity rates too! September electricity rates came in at about 10 cents per kWh for the month. October and November forward rates suggest those months’ will be coming in at around 12 cents per kWh and 10 cents per kWh respectively. The remaining calendar 2021 is expected to come in around the 11 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 are expected to come in around $5.30/GJ for October and November. Short term rates have really moved up recently and we expect to see some months above $5.50/GJ this winter. With that in mind, it is time to get into a fixed gas rate at your home.
- Natural Gas Only:
- Here are the best fixed rate options:
- Electricity Only:
- Here are the best fixed rate options:
- Encor by EPCOR has a 6.69 cents/kWh option. Rates stable for up to 5 years. $7.00/month admin. Free termination.
- EasyMax by Enmax has a 6.69 cents/kWh option. Rates stable for 3 years. $7.10/month admin. Free termination.
- Bundled Gas and Electricity: Direct Energy Retail: Admin of $9 per meter per month with gas and electricity. 7.39 cents per kWh and $3.99/GJ on a 5-year term. One month of free gas for Dec 2021. $50 back per year on five-year plan and a free Google Nest hub. Free termination.
AT MY HOUSE
I’m on the ATCO “Three for All” offer. This expired offer has me paying 3 cents per kWh for electricity and $3/GJ for gas from January 2019 until December 2021. Since I use about 9,000 kWh/yr, the 3.7 cent per kWh savings compared to other fixed rate offers, should lead to a savings of about $28/month. On the gas side, I use about 100 GJ per year, and the fixed rate of $3/GJ is about $0.79/GJ less than the ATCO Energy offer… so maybe $15/month savings as we head into the winter months. Therefore, it would appear the Three for All offer would save me about $42/month until the end of 2021.
If I didn’t have this plan in place, I might go for the bundled plan offered by Direct Energy Retail. Their five-year plan is a bit pricy, but come with free gas in December, free termination, a free Google Nest Hub, and $50 back per year.
For gas, floating rates have really moved upwards, and we are now recommending a move to a fixed rate offer. This winter looks like it might come in around $5.00/GJ and 2022 is presently trading around $4.00/GJ. ATCO Energy has a 3-year plan at $3.79/GJ with admin of $6.99/month and free termination. This is the one I’d go with if just looking at natural gas alone.
For October, the Direct Energy Regulated Services default rate is $4.079/GJ. Approximately $0.03/GJ of this figure is to recoup for previous undercharges. November’s DERS rate is likely to come in around $5.30/GJ.
As noted previously, I am on a fixed rate product. I am a bit risk averse, and don’t really want big swings on my bills if I can avoid it. 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 currently suggests index residential rates will come in around 12 cents per kWh in October and 10 cents per kWh for November. September averaged about 10 cents/kWh. At this point, 2021 forward market rates suggest the remainder of the year could average around 11 cents per kWh and 2022 around 9 cents per kWh.
If I were to pick an electricity only option today, the 6.69 cents per kWh five year term with Encor by EPCOR is the one I’d go with. It has a $7/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 seeing even better pricing for commercial users so get in touch and we can help.