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Compare The Electricity Rates of Park Power and the RRO.

· · 2 Comments Consumer Info, Electricity, Interesting

In response to some customer inquiries, I would like to provide a short report and comparison of the electricity rates from Park Power and the Regulated Rate Option (RRO).

Starting in December, the provincial government subsidized rate cap on the RRO was no longer applicable to the electricity bills of Alberta power consumers. As the RRO is a market based rate, it fluctuates up and down with the Alberta wholesale electricity price, similar to Park Power’s Variable Electricity Rate. The RRO differs in that it is set at the beginning of the month and is based upon 3 month cycles of pricing while the Park Power Variable Rate is a monthly average based upon historical price performance during each month.

From the AUC website, the RRO electricity rates from 3 geographically mandated
providers in Alberta.

In the image above you can see the RRO rates for nearly the past year. When you see the (actual), that is the rate that the RRO providers would charge based upon market conditions but were forced to cap. The differential between the rate cap and the actual rate was subsidized by the Alberta government to the RRO providers.

In comparison, the below image shows the performance of Park Power’s Variable Rate for the past 6 months. The average of these 6 months (in EPCOR territory) was 6.474 cents/kWh. Lower than the capped rate of 6.8 cents/kWh.

While a variable style rate has its up and downs that customers must weather (see below for an example of some major ups), a Fixed Rate is something Park Power can offer, that an RRO provider cannot, that can protect consumers from such price volatility.

See below for an example of 24 hours of wholesale electricity pool pricing, taken from the AESO January 17, 2020 14:00hrs at the back end of a week long cold snap.

If Park Power’s Fixed Rates are compared to the recent performance of the RRO, they seem to be a great choice. Both the 3 year and the 5 year flexible Fixed Options from Park Power are lower than the RRO for December 2019 and January 2020. Plus the recent weather driven high demand and expensive pricing could drive the RRO up even further.

Park Power’s electricity rate options, January 2020.

I hope this comparison helps inform Albertans further about their choices for electricity providers. Keep in mind that switching providers does not affect the delivery of electricity to your home or business, only the price you pay for it. With Park Power you can choose an independent provider that offers low rates, awesome service, and shares is profits with local charities.

Will You Pay Too Much For Electricity in 2020?

· · Leave a Comment Consumer Info, Electricity

If you pay your electricity bill to EPCOR, Enmax, or Direct Energy Regulated Services and you are paying the Regulated Rate Option (RRO), you’ll be paying more for your electricity in 2020 than you have to.

The RRO is the rate choice for nearly half of Alberta electricity customers. It is a market based rate that moves up and down with the wholesale electricity price. Up until November of 2019 there was a rate cap in place of 6.8 cents/kWh but now that rate cap is gone and RRO customers are exposed to the volatility of electricity pricing once again.

As you can see from the image above, with rate cap removed Albertans on the RRO are paying higher rates for electricity than they were for all of 2019. January’s EPCOR RRO Rate is 23% higher than the capped rate. The current RRO rates (and all the actual RRO rates for 2019) are all higher than Fixed Rate options available on the market from competitive, non-RRO providers.

So, if you are paying your electricity bill to EPCOR, or Enmax, or Direct Energy Regulated Services, it’s time to switch off the volatile RRO and switch onto a Fixed Rate Plan.

Many of the Fixed Rates for electricity available to consumers in Alberta are all lower than the RRO and come with the peace of mind that the rates on your electricity bill won’t jump up when market forces cause the wholesale price to jump up.

So as we enter 2020, why not indulge that resolution to be smarter with your spending and get off the RRO for your electricity bills and onto a great rate from Park Power? You can save yourself some money on your electricity bills while also being able to get your electricity and and natural gas from the same provider.

Will removal of the electricity rate cap affect my bills?

· · Leave a Comment Consumer Info, Electricity

As of November 30, 2019 the Alberta subsidized rate cap for Regulated Rate Option (RRO) electricity customers ended. Will this policy update affect your power bills? The answer depends on whether you pay your bills to an RRO provider or a competitive provider like Park Power.

The previous NDP government installed the rate cap of 6.8 cents/kWh onto the RRO in what they claimed was an attempt to protect consumers from electricity price volatility (the RRO is a Variable Rate that changes from month to month). The rate cap was only in place for around half of Alberta electricity consumers (those on the RRO) as the other half of consumers have chosen one of the rate plans offered by a competitive provider.

While the rate cap was in place, the RRO providers were being subsidized by the government. When the RRO rate that providers were charging would rise above the 6.8 cents/kWh cap, say to 9.424 cents/kWh, the government had to subsidize the rate differential owed to the RRO providers. The subsidies owed to the RRO providers from the rate differential was originally paid for by revenues from the carbon tax. When the current UCP government removed the carbon tax (June 2019), the rate cap remained and the RRO providers were still owed subsidized revenue from the rate differential. Since there was no carbon tax revenue for these subsidies, they came our of general government revenues which cost Alberta taxpayers $40 million in July and August. See the image below for how the rate differential played out for most of 2019. (Data from the Alberta Utilities Commission)

So, the removal of the rate cap will save Alberta taxpayers money, but how will it affect Albertans’ electricity bills?

For the nearly 50% of Albertan electricity consumers that still choose the RRO, they can expect to see an increase in their electricity costs starting in December. The actual average rate an RRO customer would have paid from April-Nov of 2019 is 8.00 cents/kWh.

During the same 8 months competitive electricity providers, like Park Power, have been offering price protection to Alberta consumers through Fixed Rate options, often lower than the 6.8 cents/kWh rate cap.

In Alberta, electricity demand is highest during the winter months when it is cold and dark. The high demand puts more pressure on the wholesale electricity price which can lead to more price volatility. This volatility can lead to price spikes which, if you are paying your electricity bill to an RRO Provider, will raise your rates.

It’s time to get off the RRO and protect yourself from price volatility with a Fixed Rate Plan. These are flexible, guaranteed rates offered for various terms that never have you ‘locked in’. Save yourself some money while choosing an Alberta based company with awesome service that shares its profits with local charities.

If you are ready to make the switch head to our Sign Up Page to get started.

If you would like a no obligations quote, fill out the form below.

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Park Power’s 6th Birthday!

· · Leave a Comment Community Building, Consumer Info, Interesting, Solar Power

November 1, 2019 marked 6 years since Park Power launched onto the Alberta utilities markets and I wanted to share some thoughts about how we have been able to compete and grow steadily over that time.

Our size matters. The fact that Park Power is smaller than the large, integrated incumbents gives us some competitive advantages. When you need us, you’ll be dealing with our wonderful and friendly Alberta based Customer Care Team over the phone or conveniently via email. We do not have the high overhead costs that the traditional utilities do and as such we are able to offer low rates, with awesome service, while still sharing profits with charities.

We care about our community. From the start, I believed in Park Power’s ability to be a positive presence in the community. Profit sharing was built into the business model from the beginning. Plus, we have chosen to support a variety of other community initiatives and events through sponsorship because we believe in community building and I want Park Power to be a brand know for that.

My experience with and affinity for solar power is benefiting Albertans with solar pv systems. Before Park Power, I spent some years in the solar industry and still consider myself a solar advocate. With Park Power, I have always tried to provide some extra value for our Micro-Generator customers but the past few years of offering our Solar Club Loyalty program has proved to be of great value for Albertans with solar pv systems. I hope that Park Power’s reputation as a positive and solar friendly energy provider will continue to grow.

Consumer education matters. There are many Albertans who do not understand the choices they have for their electricity and natural gas service. I have had many conversations educating consumers about the structure of the Alberta utilities markets and the energy options available to them. We often talk about how switching providers will not affect the delivery of power and gas to their homes or businesses. These efforts are bolstered by the Utilities Consumer Advocate who is trying their best to educate more consumers in Alberta and I am glad for the work they do. We just want consumers to understand there are many retail options available and Park Power offers an awesome choice.

It is amazing how fast these 6 years in business have gone by. I have learned many lessons along the way but have still enjoyed the process to get me here. I am so thankful to all of the customers who have chosen Park Power over the years for their electricity and natural gas supply. Your support means that we can continue to compete against the big utilities while still giving back to our community in meaningful ways.

Alberta Electricity Consumers Paid over 17% too Much for Electricity

· · Leave a Comment Consumer Info, Electricity, Interesting

What would you rather pay for electricity? 6.8 ¢/kWh or 5.79 ¢/kWh?  

Seems like a simple question, but about half of Albertans paid over 17% too much for their electricity during July. If you are on the government’s Regulated Rate Option (RRO) and paid 6.8 ¢/kWh, that includes you!

The concept of buying electricity on a Variable Rate is something that many of Alberta’s large businesses discovered 20 years ago when the utilities market deregulated. The first customers in the province to jump off the Regulated Rate were the major players in the Oil & Gas and Industrial sectors.

Yes, with at Variable Rate, there are price spikes once in a while, but there are also low valleys when generation prices fall.  Averaged out over time, the Variable Rate indexed to the actual cost of electricity supplied by generators to the grid has proven to be a smart move in saving money.   

At Park Power, all we have done is copied the same methodology that the biggest industrial companies in Alberta’s have been following for years and made the Floating Rate available to residential and small business owners. In July the differential was 17% more money in consumers’ pockets. 

A lot has been happening in Alberta’s electricity market recently, so it’s not uncommon for the everyday consumer to feel a little confused about it all. First, it is important to understand that since Alberta’s electricity market deregulated in 2000, consumers now have upwards of 30 competitive retailers vying for their business. Each company has a different set of goals, values, programs, services, and most importantly, rates. Albertans have a choice when it comes to energy providers. That choice only affects the price they pay to use the product, it does not affect the delivery of power and gas to your home or business nor does it affect the price of delivering those products.  If you want to be an informed consumer and save some money, just like the large industrials have been doing over the last couple of decades, then consider a simple switch in energy providers.

As mentioned above, there are also government regulated utility providers in the market, offering what is called the Regulated Rate Option (RRO) to consumers. About half of Albertans are still signed up on the RRO. Currently, the RRO is being subsidized by the government through the price cap that was installed by the Alberta NDP.  This price cap was said to be a form of protection for Alberta electricity consumers. It may have been that, but it also came with an actual cost to the government and a more figurative cost to the marketplace.    

The previous government actively promoted the regulated utilities and created this subsidy program which they called the RRO Cap. This artificially sets the RRO at 6.8 cents per kWh. 

How does the subsidy work? Since it has been referred to as a “cap”, many assume that generators of electricity are being forced to lower their prices, reducing the cost of electricity overall. This is not how it works.

What is actually happening, is that generators and regulated providers are still charging full price for the electricity they sell as the RRO. The difference between the actual rate and the 6.8 ¢/kWh charged to customers is paid back to the regulated utility through a subsidy. This is the actual cost to the government.

The more figurative cost to the marketplace is the unfair advantage that the price cap gives to the government regulated utilities. It’s like the government choosing favourites in what is supposed to be a competitive marketplace.

How is the subsidy for government regulated utilities funded? Under the NDP’s Bill 16, initially this was paid out of the Carbon Levy. Today, since the provincial Carbon Levy has been cancelled, the subsidy is funded through your taxes. Over the life of Bill 16 it will cost taxpayers upwards of $500 million dollars. A few cents per kWh adds up, and in July this year alone the subsidy took $20 million out of taxes and gifted it to the regulated utilities.   

Understanding the Regulated Rate Option (RRO)

In August, Direct Energy is charging 8.683 ¢/kWh, ENMAX is charging 8.805 ¢/kWh, and EPCOR is charging 10.191 ¢/kWh. You can view the RRO rates for 2019 for each regulated provider here.

We compared the prices for EPCOR (Regulated Rate Provider) and Park Power (Competitive Market Provider) during July and August 2019 to give a good idea of the price differential.

 JulyPrice/kWhAugustPrice/kWh
Park Power)  
Actual retail price charged:5.79 cents5.9 cents*
Gov’t Subsidy Paid to Park Power :$0$0
   
EPCOR Energy RRO  
Actual posted RRO price:9.5 cents10.2 cents
Gov’t capped retail price set at:6.8 cents6.8 cents
Gov’t subsidy paid to EPCOR:2.7 cents3.4 cents
 
* 30-day current moving cost and retail price of electricity (as of Aug 15, 2019)

How can Park Power’s price be so much lower? We work in collaboration with the UtilityNet Group, an Alberta based Calgary company, founded in 1978. The focus of UtilityNet during the first 30 years was providing energy management services to the Oil & Gas sector. During the last decade it introduced a retailing option to residential consumers and today the network has customers in over 400 communities all over Alberta.

Park Power, together with 20 other Energy Marketers, is part of a dynamic, innovative, collaborative group, whereby all overhead is minimized and shared. We do not have highly paid executives and we didn’t ship jobs out of the country.  Our efficient, automated data processing and billing centre as well as our friendly Customer Care centre are based right here in Alberta.

If you are on the government Regulated Rate the smart move is to switch over. Not only will you be saving yourself and other taxpayers money, you will be supporting a 100% local Alberta energy company!

The bottom line is easy to understand. Why pay 6.8 ¢/kWh when you could have paid 5.79¢/kWh?  

Make the switch today.