Cooling natural gas prices delay rebate beyond October
The Alberta government's natural gas rebate program won't be triggered in October as the regulated price declines from summer highs.
The rebate was first promised in February's budget to cover Oct. 1 to March 31, but only if the rate for natural gas exceeds $6.50 per gigajoule. With the highest rate estimated at $5.63 per gigajoule next month, it won't be triggered until at least November.
Prices in the province in the summer, a season that usually sees lower demand, have been above $6.50 per gigajoule since May, reaching more than $9 per gigajoule in July.
Associate natural gas and electricity minister Dale Nally said in a statement Monday if natural gas prices go any higher, the rebate program will be ready.
“We're protecting Albertans, including those on competitive rate contracts, from the possibility of extraordinary price spikes on their winter heating bills,” he said.
It all depends on the default regulated rates, which are approved by the Alberta Utilities Commission and are set for the entire month.
If one of the monthly default natural gas rates from ATCO Gas, through Direct Energy Regulated Services, or Apex Utilities, goes above $6.50 per gigajoule for November, eligible consumers will get rebates for that month covering the difference between $6.50 and the highest regulated rate, for every gigajoule used.
In that case, Albertans who are connected to the system on either a regulated or competitive plan and use less than 2,500 gigajoules of natural gas every year will automatically see the rebate on their utility bill, under a separate “GOA Utility Commodity Rebate” line.
Joel Macdonald, a specialist and CEO at Energyrates.ca, said the way the program is structured, it applies to anyone connected to the system, so Albertans don't need to change contracts or providers if prices go above $6.50.
“It's far more equitable than past rate caps, and in this case, Albertans don't have to do anything,” he said, adding the rebate doesn't work like a cap. He noted some customers who are with a competitive retailer on a variable plan that might pay $8 a gigajoule won't see the rebate because it's based on the regulated benchmark.
By the same token, customers who have a lower fixed-rate plan could eventually see a rebate that is greater than what they're actually paying for natural gas, depending on how high the regulated price goes. Assuming a $4 per gigajoule contract, it would have to go above $10.50 per gigajoule before the rebate credit exceeds the energy consumption charge. Historically, prices in Alberta have been much higher than October's default monthly rate, often spiking above $6.50 in the 2000s, before hitting a low of 55 cents per gigajoule in June 2019.
“For your average consumer, lower is always better, but when (you're) trying to provide protection to Albertans, what (you're) trying to do is ensure that they do not hit catastrophic natural gas bills that they simply cannot afford,” Macdonald said, adding that Alberta's prices are depressed compared to other regions in North America.
What (you're) trying to do is ensure that they do not hit catastrophic natural gas bills that they simply cannot afford.
Albertans who are not connected to the natural gas distribution system, but use kerosene, propane, heating oil or natural gas for heating, will be able to apply directly to the government with their receipts going back to April for the rebate. This is a small proportion of the estimated 1.6 million of those who could be eligible. Alex Puddifant, a spokesman for Nally's office, said the number is difficult to track but is expected to be less than 25,000.
NDP Leader Rachel Notley said at an unrelated news conference Tuesday the rebate program has always been a “drop in the bucket” compared to the kind of support Albertans need.