Calgarians shocked by spiking electricity bills in wake of cold snap, UCP rate cap lift

For about 50 per cent of Calgarians, opening the most recent electricity bill was an unpleasant surprise.

Rates have shot up about 19 per cent. And we just came through a brutal cold snap. Some consumers saw their bills double from the previous month.

What's going on?

"One of the main things is that as of December 1st, 2019, the UCP had removed the Alberta rate cap program," Joel MacDonald, founder of the energy comparison website energyrates.ca told the Calgary Eyeopener.

He was referring to the program that capped residential and small business electricity rates at 6.8 cents per kilowatt.

The cap was at 6.8 cents, but over the past three months, electricity pricing in Alberta has averaged 8.4 cents, giving consumers a roughly 19 per cent increase, MacDonald said.

Our cold winters don't help.

"Alberta is a unique marketplace, or electricity grid," MacDonald said.

"Most grids see their peak demand period in the summer, when air conditioning is running. Alberta, not many air conditioners but we do have a lot of heating. And although heating is mainly fuelled through natural gas, it takes a lot of electricity to run those units. So we see peak demand in the winter.

"So price was high, and overall consumption for most residential consumers went up."

Fixed rate

But not everyone's bill went up — if you have a fixed rate, you're not going to notice this spike.

But many consumers are on a regulated rate or a floating rate.

There is a regulated rate option, the one that had the price cap. There is a floating rate, and that's when you're purchasing off the spot market. If you have either of those options, your rate will be going up, MacDonald said.

If you're not sure what you've got, take a look at your energy bill.

"If it says Enmax, and either EasyMax floating or Enmax RRO product, they historically have been used to having a cap at 6.8 cents," MacDonald said. "Now, they can expect higher rates."

The only consumers who escape the rate hike are those who had signed up for a fixed rate.

And consumers can still do that, MacDonald said.

The bottom line? Read your bill, research the other options — that's where a site like energyrates.ca comes in handy — and be prepared to switch to the lowest rate. 

"Albertans are really lucky," MacDonald said. "Historically, fixed rate contracts had a contractual obligation just like a cable bill or a phone bill — if you sign up for two years and you want to leave during that two years, you have to pay an exit fee."

He said in other provinces, aggressive marketers went door to door and signed up residential consumers to "some really high-priced products." 

Exit clause

But in Alberta, consumers are free to switch between the major retailers.

"All of the fixed-price products, even if it says one year, or three year, or five year, they all have no-fee, 30-day exit clauses — or I should say all the major retailers, MacDonald said.

"Take a look at what the lowest price fixed product is. Sign up for it, and then keep an eye on if you see something lower. You can just give your notice, no fee, and switch over to the other retailer."

And then, MacDonald says, keep an eye on that bill.

With files from the Calgary Eyeopener.