By Cameron Mitchell
Solution 105 Consulting Ltd.
“YOU MAY HAVE NOTICED”
Solution 105 has changed our look! We thought that after 23 years in business, it was time for a makeover. We’re the same company you’ve grown to know (and love), offering services and expertise that help you manage your utilities efficiently and effectively. Check out our new website, solution105.com, and learn how our energy consulting services can save your building and business energy, time and money. Now back to the September 2022 residential newsletter…
As summer starts to wind down and the kids head back to school – and adults to work – there is hope of reduced volatility in daily life. However, energy rates are still wildly high. We continue to see very high spot and forward market 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 better than floating. August electricity floating rates settled around 26 cents per kWh! That is the highest in Alberta’s deregulated history, beating October 2006 by nearly 10 cents! September and October forward rates suggest those months’ will be coming in at around 15 cents per kWh. Balance of 2022 is presently in the 15 cent per kWh range also. 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 a bit higher this month – but the very near term is not so terrible, at around $3/GJ and $5/GJ for September and October, respectively. Balance of calendar 2022 is trading around $5.40/GJ, but winter looks like it may come in around $7/GJ. This being the case, we recommend locking in a fixed rate for gas. Rates for calendar 2023 are trading around $5.50/GJ and 2024 to 2027 are in the $4.90/GJ range. One great feature of these fixed residential options is that they can be terminated if a better offer comes along, or if rates drop.
WE RECOMMEND:
Natural Gas Only: The best fixed rate option:
- ATCO Energy has a $5.49 per GJ option on five-year plan. Admin of $6.99 per month. Free termination.
- Encor by EPCOR has a $5.49 per GJ on a five-year plan. Admin of $7.00 per month. Free termination.
Electricity Only: The best fixed rate options:
- Abode Power has a 7.91 cents per kWh option on 3-year plan. Deposit and Pre-Authorized Debit (PAD) required. Admin of $6.32 per month. Free termination.
- ATCO Energy has an 8.99 cents per kWh option on five-year plan. Admin of $6.99 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 ATCO Energy plan for electricity and gas as soon as possible. The three-year plan with Abode Power would also be an option (for electricity only). The one cent per kWh difference with Abode Power might amount to about $90/year. If rates drop or something better comes along in the future, the contracts can be terminated at no cost.
NATURAL GAS
Short-term spot pricing sits in the $4/GJ range, with the remainder of 2022 expected to land near $5.40/GJ (with winter rates slightly closer to $7/GJ). With that in mind, we recommend moving to a fixed rate. The ATCO Energy plan at $5.49/GJ is the best option we’ve found.
For September, the Direct Energy Regulated Services (“DERS”) default rate is $6.146/GJ. Approximately $1.92/GJ of this figure is to recoup from previous undercharges and a carry-forward balance of $2,375,000.
ELECTRICITY
As the forward market is suggesting electricity rates will be 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 15 cents per kWh in September and October. August averaged about 25 cents/kWh on the floating index. At this point, the forward market rates suggest the balance of the 2022 calendar year could average around 15 cents per kWh.
If I were to pick an electricity only option today, I’d go with the three-year plan with Abode Power at 7.91 cents per kWh over the five-year term with ATCO Energy at 8.99 cents per kWh. Abode Power will cost less but requires a $100 or $200 deposit and payments through PAD. Each have 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 may be a bit bigger, give us a call. We are now seeing better pricing for commercial users compared to residential users, and we can help get the lowest rates for your business.