Saving Money on your Utilities: Locking in the Best Price

Did you know that you have the power to choose how to buy your energy? The current rising cost of utilities is putting a strain on individuals and businesses in Alberta. Resources, like UCA (Utilities Consumer Advocate) Helps, can offer advice on ways to cut your current rates, including how to switch your energy retailer, whether to opt for regulated rates or competitive contracts, and how to lock in your utility rate, among others. Visit https://ucahelps.alberta.ca/ for more information and resources, or give them a call at (780) 310-4822 to discuss your utilities options.

Locking in your Utility Rate 

Locking in a utility rate means agreeing to a specific fixed price per kilowatt-hour (kWh) of electricity and/or per gigajoule (GJ) of natural gas and that this fixed price will apply to all of your utility usage for the duration of your contract.

A fixed rate is a guarantee from your utility company that your utility rate stay the same for a specified period of time. You might want to switch from the Regulated Rate Option (RRO) or variable (floating) rate to a fixed rate if you are comfortable with the guaranteed rate, you believe the fixed rate will help you to budget your monthly utility payments, or you want to have a stable rate to rely upon if your energy consumption increases.

NOTE: A fixed rate does not mean that you will pay the same amount each month, your utility bill may be higher or lower depending on the amount of energy you have used. It does protect you from market fluctuations though. For example if market rate increases you will still get to keep your lower rate.

To ensure you are locking in at a good price you can check Historic Rates and Regulated Rates to give you an idea of where rates are headed.

Switching your Energy Retailer to Lock in Rates or get a Better Deal 

While switching your energy retailer can seem like a daunting and overwhelming task it can be done easily online using resources such as the UCA’s cost comparison tool. The tool will show you the available plans in your area and may help you narrow down which one works best for you.

The first step in changing energy providers is considering which factors are most important to you. Are you looking for better rates, specific plan features, a single bill for gas and electricity, or better customer service? It is important to note that consumption rates are only one part of your energy bill and that there are typically several additional fees associated with a plan, such as administration fees, distribution charges, and access fees.

You can select a regulated or a competitive retailer to provide your utility service. Regulated Rate retailers only offer a regulated rate plan and never require a contract. Competitive Rate retailers offer fixed or variable rate plans (or a combination of both) and will always require you to sign a contract. Once you have chosen a new retailer you can contact them directly to set up an account. You do not have to let your old retailer know you are changing plans, your new provider will do this on your behalf.

Make sure that you read any contract thoroughly before agreeing to it. New retailers may require a deposit before setting up a service. Ask if there are options to avoid this and check if you will be charged any penalties to end your contract before signing. It can take time for any switches to take place. Retailers will continue to provide services to your home in the interim, so remember to check all bills thoroughly and contact your new provider within a month if you haven’t received your first bill. Even if bills are not received you will still be liable to pay for the service received, so ensuring that you are up to date on any and all billing is crucial.

Competitive Retailers vs. Regulated Retailers: Risks and Benefits

Regulated Retailers:

• Bill for electricity and gas on a month to month basis
• The rates will change each month
• You will receive two bills, one for natural gas and one for electricity
• If you haven’t signed a contract for natural gas or electricity you are served by a Regulated Retailer
• Regulated Rates are reviewed and approved by the Alberta Utilities Commission (AUC) and can change month to month, making them unpredictable
• Since you haven’t signed a contract there are no early exit fees
• You cannot bundle your services through Regulated Retailers
• Rural Electrification Associations and Natural Gas Co-ops are regulated by their member-elected Board of Directors
• No marketing costs are built into the rate and no sales tactics are involved

Competitive Retailers:

• You choose to sign a contract to receive services for electricity and/or gas for a specific period of time
• Rates in your contract can be fixed, variable, or a combination of both depending on what you agree with the retailer
• You will receive a single bundled bill for services each month
• It typically takes 10-15 days to switch energy services, but can take up to 90 days depending on the situation so always check with your retailer the date when service will start
• Fixed price contracts can protect you against short-term price increases caused by things like natural disasters
• You could be locked into a contract price for the full term, even if the market rate drops
• Some retailers charge exit fees to end your contract before the end of the term
• You can cancel your contract, without penalty, for any reason within 10 calendar days of signing, or up to 60 days if the contract was agreed over the phone
• Sometimes a deposit may be required by the provider

Resources

Sample Energy Contract Folder 

Sample Competitive Contracts 

Dealing with Door-to-Door Sales 

Tips: Electricity and Natural Gas Contracts

UCA Cost Comparison Tool