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Residential Energy Rates in Alberta: What to do? April 2022

By Cameron Mitchell

Solution 105 Consulting Ltd.

“APRIL SHOWERS”

Volatility in the energy markets continues as we change gears towards warmer weather – time to pack away those winter boots! March electricity rates settled around 8 cents per kWh for the month. April and May forward rates suggest those months’ will be coming in at around 9.5 cents per kWh. Balance of 2022 is presently in the 10 cent 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… Enmax still has a very good option.

The forward market for natural gas has really popped and gas rates are expected to come in around $6/GJ for April and May. Balance of calendar 2022 is in a similar range. This being the case, we highly recommend locking in a fixed rate for gas. Forward rates for calendar 2023 are around $4.50/GJ and 2024 to 2027 are in the $4/GJ range.  Time to make the jump if you haven’t already secured a fixed gas rate.

WE RECOMMEND:

Natural Gas Only:

  • Here are the best fixed rate options:
    • EasyMax by Enmax: $4.09/GJ on a five-year plan. Admin of $7.10 per month. Free termination.
    • ATCO Energy $4.39/GJ on a three-year plan. Admin of $6.99 per month. Free termination

Electricity Only:

  • Here are the best fixed rate options:
    • EasyMax by Enmax has a 7.49 cents/kWh option. Rates stable for 5 years. $7.10/month admin. Free termination. With current market conditions, this is a great option.
    • Encor by EPCOR has a 7.79 cents/kWh option. Rates stable for 5 years. $7.00/month admin. Free termination

AT MY HOUSE

I signed up a few months back on 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).  No better options available at this time.

If I didn’t have this plan in place, I would 100% go with the five-year EasyMax by Enmax plan for electricity as soon as possible and also jump over to EasyMax by Enmax for gas too, on a fixed rate of $4.09/GJ. If rates drop or something better comes along in the future, the contracts can be terminated at no cost.

NATURAL GAS

The residential retailer offers we have seen are no better than $4.09/GJ. Short term pricing sits in the $6/GJ range, with the remainder of 2022 expected to land near $6/GJ. With that in mind, we highly recommend moving now to a fixed rate. The EasyMax by Enmax plan at $4.09/GJ is the cheapest.

For April, the Direct Energy Regulated Services (“DERS”) default rate is $5.281 /GJ. Approximately $0.68/GJ of this figure is to recoup from previous undercharges. May’s DERS rate is likely to land around $6/GJ.

ELECTRICITY

As noted previously, I am on a fixed rate product. As the forward market is suggesting electricity rates will be 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 9.5 cents per kWh for April and May. March averaged about 8 cents/kWh. At this point, the forward market rates suggest the balance of the 2022 calendar year could average around 10 cents per kWh.

If I were to pick an electricity only option today, the five-year term with EasyMax by Enmax is the obvious choice – even though they recently bumped it to 7.49 cents per kWh. 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.

COMMERCIAL USERS

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 pricing for commercial users compared to residential users, but we can still help get the lowest rates for your business.