By Cameron Mitchell
Solution 105 Consulting Ltd.
“STARTING TO GET CHILLY OUT THERE”
We have seen energy retail offers start to cool off also, as their rates start to move up in response to what the Alberta energy market has been seeing now for 10 months. Hopefully, everyone has changed from their floating electricity rates! October electricity rates came in at about 10 cents per kWh for the month. November and December forward rates suggest those months’ will be coming in at around 10 cents per kWh and 11 cents per kWh respectively. 2022 is expected to come in around the 10 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 $5.40/GJ for November and December. 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:
- Bundled Gas and Electricity: Direct Energy Retail:
- Admin of $9 per meter per month with gas and electricity.
- 6.99 cents per kWh and $3.99/GJ on a 5-year term.
- $50 back per year on five-year plan and a free Google Nest hub limited time offer. Free termination.
AT MY HOUSE
I was on the ATCO “Three for All” offer. This offer is ending and had me paying 3 cents per kWh for electricity and $3/GJ for gas. I was able to get 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). This offer is pretty close to what Direct Energy Retail is offering and I could have been swayed to go the other way
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 on the admin fee, but they dropped the rate a little and it still has free termination, a free Google Nest Hub, and $50 back per year. When I did the math comparing the two options over the course of a year for how much I use at home, the ATCO plan was about $90/yr less expensive ($1,110 vs. $1,198).
For gas, floating rates have really moved upwards, and we are 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. Encor by EPCOR has a 2-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 November, the Direct Energy Regulated Services default rate is $5.328/GJ. Approximately $0.21/GJ of this figure is to recoup for previous undercharges. December’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 do not 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 pricing currently suggests index residential rates will come in around 10 cents per kWh in November and 11 cents per kWh for December. October averaged about 10 cents/kWh. At this point, the forward market rates suggest the 2022 calendar year could average around 10 cents per kWh.
If I were to pick an electricity only option today, the 6.89 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 no longer seeing better pricing for commercial users compared to residential users, but we can still help get the lowest rates for your business.