The editorial cartoon published Wednesday July 29, 2015 was somewhat disingenuous and misleading. Residential and small business consumers buying electricity, based on “guaranteed energy rates” provided by competitive retailers like Park Power, are totally shielded from impact as presented in the MSA report of TransAlta with-holding generation with the intent of artificially pumping up the Power Pool wholesale market price of energy.
The situation of TransAlta attempting to manipulate the wholesale market happened a few years ago: Nov 19, 23, and Dec 13-16th of 2010 plus Feb 16th 2011. It is true that some market participants were negatively impacted by spiking Power Pool Prices: BUT NOT those customers who had signed a fixed rate contract. They were protected.
Here are some interesting numbers to put the history of Power Pool Prices into perspective.
In the wholesale market the price of electricity changes every hour and during some hours (based on supply and demand) it spikes, but what goes up always comes down. The average wholesale price over the last 15 years is $64.60 / MW (this is the average of over 125,000 hours of prices posted by AESO). What does the market look like today? The numbers are in for July: $23.61/MW. AESO’s wholesale price last month was 64% below the industry 15 year average.
What can you assume from these numbers? Deregulation is working for the benefit of consumers. Since 2001 there have been 5 months where wholesale prices charged by generators have been below $25/MW (3 of which occurred this year). How does this translate to what consumers are paying? Those who are buying electricity indexed to the floating rate actually paid approximately 3.5 ¢/kWh this July. Wholesale prices in July were the 4th lowest month since the birth of deregulation.
The Power Pool 12 month rolling trend (to July 2015) is currently running at $36.80 / MW. This is approaching the lowest prices in Alberta which were posted in 2002 with the pool prices at $36.41. Over the last 3 years as new generation units have come online – energy prices have been in free fall.
One can approach their electricity rates just like they would approach bank interest rates. When rates fall and if you think that they are near the bottom, it is a great time to lock in. The average power pool price over the last 12 months are nearing record lows so locking into a fixed rate now is good advice. As an example, for the senior pictured in the cartoon; the Guaranteed Fixed Rate offered by Park Power to seniors is 6.30 ¢/kWh guaranteed to December 2017.
Again, don’t believe all the negative hype about the utilities industry. Some of us are actually working for the consumer and saving them time and money while offering options to protect themselves against drastic price changes in the market.
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