Power, natural gas prices on the rise

It will cost Calgarians more to heat their homes and keep the lights on this month as a result of spikes in natural gas and electricity costs. Costs of energy increased Jan. 1 over the prices residential consumers paid last month.

Electricity prices climbed marginally from 7.6 cents to 7.8 cents per kilowatt-hour for Calgary homeowners not on fixed contracts, but natural gas prices shot up more than $1 per gigajoule from $3.19 in December to $4.23 in January.

Last year, natural gas prices in southern Alberta averaged $3.16 per gigajoule.

The average residential consumer uses about 150 gigajoules a year — 100 gigajoules during the five winter months and 50 during the seven summer months, said Bill Gwozd, a senior vice-president at Ziff Energy. Gwozd said Friday the gas increase is largely brought on by lower than normal supplies of stored natural gas and demand created by cold weather in Canada and the U.S. “Right now today consumers will pay another dollar more (per gigajoule) than they paid last year,” he noted.

But he said natural gas continues to be a bargain in North America and this month’s hike will cost the average homeowner less than a dollar more a day. By comparison, natural gas in Asia is about $20 a gigajoule, he said.

Rather t han rushing to change suppliers, Alberta consumers should take steps to reduce their home heating costs.

“Some consumers are knitting sweaters to keep warmer and turning down their thermostats,” he said. “Some consumers are turning their fireplace on to heat just the room that they are in. ... However, at the end of the day I still maintain natural gas prices are much lower than they were seven years ago and that’s a big benefit to consumers.”

Albertans were paying double digits for a gigajoule of natural gas in 2008, but the price has dropped and is expected to stay low for more than a decade, he said.

While electricity prices are climbing, they were more than nine cents a kilowatt-hour at this time last year and averaged just below 8.7 cents through last year. Most Albertans remain on the volatile default rate — called the regulated rate option — but Everett McDonald, who heads an MLA electricity committee implementing recommendations to reduce volatility in the market, points out there are more stable, competitive prices available to Albertans who sign contracts with retailers.

He noted many retailers now allow consumers to get out of their contracts at no charge and with only a month notice so there’s little risk in getting off the regulated rate.

But so far only 40 per cent of Albertans have taken the plunge.

Nick Clark, owner of Spot Power, said customers on the regulated rate are paying 20 per cent more for electricity than Albertans who have signed contracts.

“The best kept secret in Alberta ... is that you do not have to be stuck on the government’s regulated rate option,” he said.

Clark said boutique companies are offering electricity at less than 7.5 cents and some have 7-cent seniors’ rates. Albertans can check out historic rates, the current regulated rate option and retail contract prices at the Utility Consumer Advocate website: http://ucahelps.alberta.ca.

Natural gas prices are lower than they were seven years ago