When choosing electricity rates in Alberta, should you choose floating or fixed?
In Alberta, we have a deregulated electricity market and you can choose who you buy your electricity from. You can buy from a Competitive Energy Retailer like Park Power either at a fixed price for a certain term or at a floating rate that will follow the market price. If you don’t choose to buy from a competitive retailer you will be put on the Regulated Rate Option (RRO). The Alberta Utilities Commission (AUC) regulates Alberta’s investor-owned and municipally-owned utilities to ensure that customers who have not signed up with a competitive retailer still receive electricity at a just and reasonable rate. This rate changes each month and is set at the beginning of the month.
If you choose to go with Park Power, a competitive electricity retailer, and you want a rate that follows the market price, then you can choose a Floating Rate Plan. Typically, competitive retailers set the rate at the end of the month, dependant opon the average market prices for that month. Over the long term the average floating rate has proven to be lower than fixed contract prices and the RRO prices.
Alternatively, if you are risk averse and would like to protect yourself from spikes in the price of electricity on a month to month basis then you can choose to go on a Fixed Rate Plan. The Fixed Rate (or contracted rate) is an electricity rate sold to you by the retailer for a specified term. Currently Park Power is offering fixed rates on 3 year terms and you can cancel for free anytime with only 10 days notice.
What is important for consumers to understand is that they have a choice when purchasing their electricity supply and that who they choose as their retailer does not affect how the power is delivered to their home or business. If you are looking to reduce your monthly expenses and save money on your electricity bill then consider shopping local and powering our community.
