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Choosing Electricity Rates in Alberta – Floating or Fixed?

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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.

 

Park Power – Local, Stable, Secure Electricity

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“Who is Park Power and why should I choose Park Power as my electricity provider?” “How much money can I save with Park Power?” “Is it easy to switch?” “Can I trust that my power supply is secure?” These are questions that I get from consumers as I talk to them about Park Power.  So, in this post I hope to answer these questions for all consumers and help educate you about your choice in the energy markets.

“Who is Park Power and why should I choose Park Power as my electricity provider?”

Park Power is a licensed electricity provider in the province of Alberta competing in the Capital Region with the big retailers Epcor, Enmax, Direct Energy, and Just Energy.  Park Power is the Local Choice owned by local entrepreneur, family man, and community builder Kris Kasawski.  You should choose Park Power because you can save money on your power bills and support the local community at the same time through the Community Partner program.

 “How much money can I save with Park Power?”

Park Power can save you money on your electricity usage by offering lower fixed rates than our big competitors and less than the Epcor’s Regulated Rate Option (RRO) floating rate. How much money Park Power will save you depends on how much power you use every month.

An example, an average Capital Region home that uses 600 kWh per month on the RRO with Epcor – 2013 Avg rate 8.61 cents/kWh.  Electricity Usage Cost – $51.66/Month.

With the Park Power Residential Value Rate of 7.75 cents/kWh and Interest Plus Account.  Electricity Usage Cost – $46.50/Month.

Over the 3 year term electricity savings of $185.76  plus the 5% annual return on their security deposit of $30 could have saved a customer  over  $215

“Is it easy to switch?”

The simple answer is ‘Yes’, however your Energy Retailer might charge you an early exit fee if you cancel before your contract expiry date. If you have a long-term fixed contract, we encourage you to read your contract terms and conditions to learn how to exit the contract and if you will be charged an exit fee.  Should you choose to remain with your current provider for the term of the contract, when your contract expires we hope you will consider switching to Park Power. Epcor (RRO) customers can switch over at any time. Switching is easy.

“Can I trust that my power supply is secure?”

Yes.  When you sign up with Park Power, nothing about how electricity is delivered to your home or business changes.  Your wires company (FortisAlberta or EPCOR) will continue to distribute electricity to you just as they do today. Alberta’s deregulation policy requires all utility wires companies to continue to provide their wire distribution, meter reading, and deliver services regardless of who you select as a retailer.

Electricity Supply || Questions?

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24 Hours a day someone from AESO is monitoring the electricity grid in Alberta

As Park Power is a newer energy retailer in the province, consumers might wonder, “How can I be sure power will be delivered to my home or business after I sign up with a smaller boutique retailer like Park Power?” The answer is that the delivery of power to the end users is not in the hands of the retail provider but in the hands of the Alberta Electric System Operater (AESO) and the transmission and distribution companies.  Energy retailers like Park Power mainly look after the billing and customer service aspect of electricity supply.

GENERATION – Electricity is generated at power plants (coal, natural gas, biomass, hydro and wind)

TRANSMISSION – It is then delivered across the province through the the high voltage transmission network.

DISTRIBUTION – From the high voltage transmission lines electricity is distributed to the end user on the lower voltage distribution network that is serviced by the electricity distribution companies (EPCOR and FortisAlberta for Park Power customers). The distribution company owns the power meters and keep track of the consumers’ usage.

RETAILER – The distribution companies let the energy retailer know how much energy a customer has used for a billing period and the retailer charges and collects payment from the customer.

The entirety of the system is monitored 24 hours a day 365 days a year by the AESO. The AESO monitors both generation and consumption to ensure that there is electricity available for Alberta’s ever increasing demand. Whenever rolling brown outs or black outs happen it is because the qualified personnel in the AESO control room determined there is a need to reduce consumption to maintain the reliability and integrity of the electrical grid.  At other times when a physical fault in the distribution network causes a power outage to your home or business it is the responsibility of the distribution company  to repair the system and restore service back to the consumers.

According to the AESO, since 2005 electricity demand in Alberta has increased 14 percent and the projected annual increase in demand from 2012-2012 is 4 percent. While demand in the province is increasing new generation supply has not yet increased. In fact Alberta may see up to a dozen coal fired generation plants (around 1/3 of total current capacity) decomissioned over the next 15 to 20 years.  When you consider the economics of this situation that as demand goes up so could the price, it is worthwhile considering signing up for one of Park Power’s Stable Rate Plans

 

 

Want to save money on your power bill?

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Would you like to save money on your power bill?  Currently, most of you will pay your power bill to the default regulated option EPCOR, or a competitive retailer like Direct Energy, Enmax, or Just Energy and you will pay more for your power than you can with Park Power. Here are some examples of how much you could save!

Below is what the usage charges would be for a home with monthly electricity usage of 800 kWh/month.

Compare with Park Power’s fixed rate of 7.75 cents/kWh = $62.00

EPCOR’s RRO avg price of 8.422 cents/kWh = $67.38    $64.56/year Savings

EasyMax fixed rate of 8.9 cents/kWh = $71.20    $110.40/year Savings

Direct Energy fixed rate of 8.59 cents/kWh = $68.72    $80.64/year Savings

Just Energy fixed rate of 8.79 cents/kWh = $70.32     $99.84/year Savings

Over a 3 year term total savings would be between    $193.68 and $331.20 

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