With energy deregulation in Canada, access to energy has become easier, quicker, and better. As a consumer, you have the power of choice – the power to choose your energy provider.
Deregulation has resulted in an increasingly competitive and decentralized energy market in Canada, where energy suppliers try to attract customers by offering electricity and natural gas at competitive rates.
Energy companies generate electricity using wind and other natural resources to generate electricity and others process natural gas. Energy they produced is then sold to power retailers.
Delivery of Energy: Transmission & Distribution
Before energy from the electricity generation company reaches you, it travels a long distance through kilometres of cabling. The transmission company is responsible for building and maintaining the infrastructure to ensure an unhindered delivery of energy to consumers. The same company that processes natural gas transmits it to an energy distribution company, from where it reaches homes and businesses.
Energy suppliers work with a local transmission company to ensure a seamless supply of electricity. It is the responsibility of distribution companies to supply electricity and take your meter readings.
Retailers purchase energy on the wholesale market. Strategic alliances and partnerships with wholesale energy providers in a deregulated energy market in Canada enable retailers to buy energy on competitive terms and ensure the efficient delivery of natural gas and electricity to the local utility.
If you have any questions regarding the deregulation of energy in Canada, get in touch with us today. As Alberta energy consultants, we would be glad to be part of your learning experience, for we believe a well-informed consumer can change the face of the market. A smart consumer will choose the right energy supplier as their electricity and gas retailer.
Which Energy Rate Plan is Better?
You already know that since the deregulation of energy market in Alberta, Canada, it is possible for consumers to independently choose the energy retailer that offers them the best deal. With a range of pricing structures available for energy plans, you can compare and purchase electricity and natural gas directly from a competitive energy provider, making good savings in the process. You might be wondering whether to choose a fixed rate plan or a variable (floating) rate plan in Canada.
About Fair Competition
Consumers are free to purchase natural gas from an independent energy retailer of choice or a default energy supplier. Or you can purchase electricity from the RRO provider. Your choice of energy provider does not impact the delivery of energy to you. If you change your energy provider, you will still be eligible to purchase energy from the distribution company in your area.
Which Energy Rate Plan is the Best
Wondering what is the ideal energy rate plan for you? Well, since the deregulated energy market allows you to shop around, you might be keen to look for the lowest possible price, right? Are you ready to take the occasional risk of price change? If this doesn’t matter much, you may want to go for a variable (floating) rate.
Variable (Floating) Rate Plan in Alberta
A variable (floating) rate plan in Canada depends on the present market conditions of natural gas and electricity to determine energy prices. If you choose to sign up for a variable (floating) plan, the rate will depend on the current market price of electricity or natural gas. Since variable (floating) rate depends on the market conditions, it means that demand will affect the energy rate price. Even a natural disaster has the potential to affect the rate of energy. A trade conflict or any other similar event can impact the price of energy.
Benefits of a Variable (Floating Rate) Plan in Alberta
If you consider variable (floating) rate plans, you will find that you get lower rate than a fixed plan, as other energy plans hedge against the future while the former depends on the existing market conditions. With the change in market conditions, an energy provider will adjust the variable (floating) rate. On the other hand, if you go for a fixed rate plan, the company is under contractual obligation to preserve the same rate that you are being charged thus far.
A variable (floating) rate plan is the best plan to opt for to get the best possible rate. While there is a risk factor involved with variable rates, you also stand to benefit in the event market prices fall down, which will bring down the floating rate.
Benefits of a Fixed Rate Plan in Alberta
If you choose to sign a fixed rate energy plan, you are automatically insured against any unforeseen event. This energy plan works best for those looking for a stable and predictable rate. When you choose a fixed rate plan, your price is locked in for the duration of the contract. Competitive energy retailer Ambit Energy Canada has 12 months, 24 months, and 36 months fixed rate plan to choose from.
Any major eventuality, such as a trade war, a refinery accident, a natural disaster, or any other serious world development, can seriously impact the prices of existing energy plan rates. But this should not have any impact on fixed rate plans for the duration of your fixed rate contract.
The energy provider continues to charge the same amount for each unit of natural gas or electricity.
Contrarily, you cannot enjoy the same certainty in a variable rate plan in Canada. If you want stability of energy prices, then you should go for fixed rate plans.
A fixed plan is just like a form of insurance, which means it protects you from any price change during an unexpected event. However, when you sign up for a fixed rate energy plan in Canada, you will be paying more than a variable rate plan (when compared at the time of signing up).
How Are Regulated Rate Plans Determined
Similar to variable rate plans, regulated plans function similar to variable plans. An independent agency examines the existing market conditions every month considering the market forecasts.
The Alberta Utilities Commission sets the regulated energy rates on a monthly basis for most residents of Alberta.
Current Energy Rates Information
Our online energy rate information page can come in handy if you wish to get real-time prices on offer. Follow this link **** to find the current energy rates and different plans available by Ambit Energy Canada, a company that we recommend. You can read more about Ambit Energy Canada here. Please note the prices mentioned reflect energy rates alone and do not include any other charges, including that of distribution, administration, or transmission. There are no rate riders involved here. Variable rates also represent transaction charges.