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Like in every sector, the electricity industry is impacted by global inflation, supply chain issues, commodity shortages, higher production costs, and other issues caused by the pandemic and the war in Ukraine. Unfortunately, those factors make generating electricity more expensive, so the commodity price must go up too.
Phasing Out Coal Power?
Alberta is working towards phasing out coal power by the end of 2023. That makes natural gas our primary fuel source for generating electricity. Unfortunately, natural gas prices have hit a 14-year high, increasing by more than 200%. While it's a cleaner fuel, it has temporarily led to higher electricity rates in Alberta.
During the coldest winter months, there is an increase in energy demand because we consume more energy to heat and light our homes. As a result, that usage and demand drive up the price of electricity. This demand also increases during the hot summer months, when we start depending on the air conditioner to keep the home cool.
While increasing electricity prices can feel stressful, locking into a fixed rate plan with Direct Energy can help mitigate some of that cost. In addition, signing up for a fixed rate can help you avoid market volatility and ensure financial security through rate stability for as long as you need it.
For example, if you secure a fixed rate plan with Direct Energy for five years, you'll get a rate of 16.69 cents/kWh** and avoid that annual price increase every winter and summer.
Plus, we have no enrollment or exit fees. So that means that when rates go back down or drop below your fixed rate, you can always switch back to a regulated or variable rate plan and take advantage of that lower rate.
All fixed rate options will help you avoid forecasted rate hikes and save money on home energy bills. Also, for some, knowing exactly what you'll pay for electricity every month allows you to be financially prepared and offers peace of mind.
*The forecast is based on the current forward wholesale electricity price curve in May 2023. Please note that these rates are subject to change and will not be the exact rates.
**Direct Energy's 5 Year Cashback Plus Electricity Plan as of June 2023.