Energy rates can be confusing. There are variable (floating) rates, fixed rates and regulated rates.
Fixed rates are set rates that do not fluctuate with the market and are guaranteed for the duration of your contract term. Fixed rates require a contract, with a minimum one year commitment.
Fixed rates can be a good option with market prices are volatile.
Floating rates change with the market prices and can provide you with low energy costs when the market is low, however when prices rise, this can cause a big surprise on your energy bill.
Regulated rates are energy rates that are controlled by the Alberta Utility Commission.
These rates fluctuate but have a maximum price cap to protect consumers from run away prices, unlike variable rates.
Like all variable or floating rates, regulated rates do not require a contract, making them a good option depending on the market. To find a regulated rate retailer, click here.
Choosing The Right Rate
To choose the right type of right for you, you need to consider what the market rates are in comparison to the fixed rates being offered on the market.
Historical Average Alberta Natural Gas Rates
You’ll notice that the regulated and variable rates for natural gas are significantly less than the fixed rates on the market.
Historical Average Alberta Electricity Rates
You’ll also notice that the fixed and regulated rates for electricity are much lower than the variable rate.
Making The Right Choice
Making the right choice in terms of which type of rate can be confusing. You could choose to go with the type of rate that is currently the lowest, based on the above historical rates.
The second option would be to look into our crystal ball to see what is going to happen to energy rates.
Since we don’t have one handy, let’s look at what the analysts have to say. According the Deloitte’s oil and gas forecast (December 2018), natural gas prices are expected to rise but stay under $3 per GJ.
Sadly we have not been able to locate a credible forecast for electricity prices, but will update this post when we find one. In the meantime, the variable rate is well above the fixed and regulated rates, so it is best to lock in with a fixed rate or sign on for a regulated rate.
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Need More Help?
If all of this is too confusing and you are having a hard time deciding which type of rate is right for you, you can order a personalized custom Energy Savings Report where we will outline the lowest cost energy providers in your area and also make recommendations on the type of rate to look at and forecast how much money you could be saving on your monthly utility bill.