By Cameron Mitchell
Solution 105 Consulting Ltd.
“EMBRACING UNCERTAINTY”
There are a lot of balls in the air this month when it comes to political leaders, tariffs, carbon taxes, and even weather. Fortunately, the Alberta electricity market is in a bit of a sweet spot. April and May forward rates suggest those months will come in around 3.5 cents per kWh. The remainder of 2025 and 2026 are trading near 5 cents per kWh. Meanwhile, floating March electricity commodity rates came in around 4 cents per kWh.
The spot market for natural gas averaged roughly $2.20/GJ for March. The forward market for natural gas has increased compared to last month. Short term rates are trading around $2.40/GJ until winter of 2025. This being the case, we suggest moving to a floating rate if your current fixed rate is above $3.30/GJ. Forward market gas rates for April 2025 are trading near $2.50/GJ, the remainder of 2025 around $2.90/GJ, and 2026 to 2028 are in the $3.30/GJ range.
WE RECOMMEND:
Natural Gas Only: Unless you have a fixed rate under $3.30/GJ, we recommend getting onto a floating rate.
Best floating rate options:
- Direct Energy REGULATED Services. DERS. This is the default, no retailer rate. It is a floating rate. Check with your current provider to ensure there are no cancellation fees, etc. This rate is very close to spot plus $0.117 per GJ. The monthly admin fee is about $10.65/month.
- Encor by EPCOR has a floating rate of spot plus $1/GJ. The monthly admin fee is about $8.20/month. $50 referral credit linked here.
Best fixed rate option:
- Prairie Power has a 1-year fixed rate option at $3.29/GJ with a monthly admin fee of $8.99/mth.
Electricity Only: Unless you have a fixed rate contract below 6 cents per kWh, we recommend considering a floating rate:
Best floating rate option:
- Encor by EPCOR has a floating rate of spot plus 1.00 cents/kWh. The monthly admin fee is about $8.20/month. $50 referral credit linked here.
Best fixed rate option:
- Abode Power has a great fixed rate option at 5.97 cents per kWh but it only runs until the end of August 2025. Deposit and PAD required. Admin of just $5.00 per month! Free termination.
AT MY HOUSE:
On March 1, 2025, I moved my electricity to a floating rate with Encor by EPCOR. The Abode Power fixed rate option that runs to August 31 is intriguing, but I plan to stick with my electricity plan for now. That said, I will continue to watch for fixed rate opportunities.
For gas, I plan to continue floating with Direct Energy REGULATED Services. DERS. The 1-year $3.29/GJ fixed rate option with Prairie Power might be something to consider, especially as we get closer to the winter of 2025.
If something better comes along in the future, these plans can be terminated at no cost.
NATURAL GAS
The retail offers we have seen are no better than $3.29/GJ. Short term forward market pricing is now below $2.50/GJ, with April 2024 expected to average around $2.50/GJ, and pricing below $3.00/GJ until November 2025. So, for gas, we recommend a floating rate. In general, a good option is to go with Direct Energy REGULATED Services (DERS)… remember “Regulated Service”. If you are not with DERS 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.
DERS has an admin fee of about $10.65 per month and their floating rate includes a margin of roughly $0.117 per GJ. Still, this is better than most floating margins which average over $0.40 per GJ.
For April, the Direct Energy Regulated Services (“DERS”) rate is $2.210/GJ. Approximately $0.13/GJ of this figure is to collect for previous period undercharges. We expect May’s DERS rate will be approximately $2.50/GJ.
ELECTRICITY
As the forward market is suggesting electricity rates for April and May may be in the 3.5 cent per kWh range, we recommend people with fixed rates higher than 6 cents per kWh to make a move to a floating rate option. Be sure to check to see if there are any cancellation fees. The Encor by EPCOR floating plan is a good one. $50 referral credit linked here.
March averaged about 4 cents/kWh on the floating index. The remainder of 2025 and 2026 are trading in the 5.0 cents per kWh.
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, give us a call. We are now seeing much better pricing for commercial users compared to residential users, and we can help get the lowest rates for your business.