By Cameron Mitchell
Solution 105 Consulting Ltd.
Christmas is just a few weeks away and all we really want is some relief in energy pricing! We continue to see high spot and forward market electricity rates and some retailers have moved their residential offers upwards AGAIN over the last few weeks. Even with those increases, the retail fixed offers available are still way better than floating. November electricity floating rates settled around 19 cents per kWh. December and January forward rates suggest those months’ will be coming in at around 25 cents per kWh. We highly recommend locking in a fixed electricity rate for your homes if you have not done so already.
The forward market for natural gas is trading close to last month – and the very near term is looking pretty high, at around $6/GJ to February. This being the case, we recommend locking in a fixed rate for gas. Forward rates for calendar 2023 are trading around $4.70/GJ and 2024 to 2027 are in the $4.20/GJ range.
One great feature of these fixed rate residential options is that they can be terminated at no cost if a better offer comes along.
Natural Gas Only: The best fixed rate options:
- EasyMax by Enmax has a $5.79 per GJ option on five-year plan. Admin of $8.68 per month. Free termination
- ATCO Energy has a $5.99 per GJ option on five-year plan. Admin of $8.99 per month. Free termination.
Electricity Only: The best fixed rate options:
- Abode Power has an 8.99 cents per kWh option on three-year plan. Admin of $6.43 per month. Free termination. Deposit required.
- Encor by EPCOR has a 9.89 cents per kWh option on five-year plan. Admin of $7.00 per month. Free termination.
AT MY HOUSE
I am currently 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). As there are no better options available at this time, I will stay with ATCO at my house.
If I didn’t have this plan in place, I would go with the five-year EasyMax by Enmax plan for gas starting in December and the Abode Power three-year plan for electricity as soon as possible. If rates drop or something better comes along in the future, the contracts can be terminated at no cost.
Short term spot pricing sits in the $6/GJ range. With that in mind, we recommend moving to a fixed rate. The EasyMax by Enmax plan at $5.79/GJ is the best fixed rate option we’ve found.
For December, the Direct Energy Regulated Services (“DERS”) default rate is $6.140/GJ. Approximately $0.11/GJ of this figure is to recoup from previous undercharges. We expect January will be approximately $6.15/GJ.
As the forward market is suggesting electricity rates will be much higher than the current fixed rate 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 25 cents per kWh in December and January. November averaged about 19 cents/kWh on the floating index.
If I were to pick an electricity only option today, I’d go with the three-year term with Abode Power at 8.99 cents per kWh. That said, the fixed rate option from Encor by EPCOR would come in a close second place.
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 may be a bit bigger, give us a call. We are seeing better pricing for commercial users compared to residential users, and we can help get the lowest rates for your business.