Natural gas prices down, electricity up in Alberta in February

For a fifth month in a row, natural gas prices in Alberta aren’t high enough to trigger the provincial rebate.

The province issued a bulletin on Thursday saying February’s default natural gas rate is $3.715 per gigajoule (GJ), well below the $6.50 per GJ triggering rate and January’s $6.446 per GJ.

When the natural gas rebate was initially announced, it was set to run for the six-month stretch between September 2022 and March 2023, but the government recently said it would be extended as part of the affordability action plan.

“We look forward to providing more information in the coming months,” Andrea Farmer, press secretary of Affordability and Utilities Minister Matt Jones, said in a statement.

Electricity prices, however, are going in the opposite direction.

Data from the Alberta Utilities Commission on Friday showed the regulated rate option (RRO) – the default rate for electricity customers who aren’t on a contract – went up again.

Enmax customers in Calgary will see RRO prices go from around 27 cents per kilowatt hour (kWh) to nearly 29.7 cents per kWh in February. Epcor and Fortis RRO customers can expect prices to rise from 30 cents per kWh to nearly 33 cents per kWh. Direct Energy RRO rates will jump from 27 to 32.7 cents per kWh.

University of Calgary economics assistant professor Blake Shaffer tweeted the rates are new all-time records.

Albertans on RRO won’t have to pay the full brunt of the continued high prices under the government’s electricity price protection.

From January through March, any prices above 13.5 cents per kWh will be repaid over the 21-month period of April 2023 through December 2024.

Shaffer said the total cost of the electricity price cap will exceed $200 million.

The Opposition said the government “mismanaged” the electricity system, saying “their incompetence means Albertans will be stuck paying higher bills.”

“Albertans are already struggling to keep the lights on and put food on the table, but month-after-month, the cost of electricity has gone up under the UCP with next to no help for Albertans,” Edmonton-Manning MLA Heather Sweet said in a statement.

Farmer said the province is working on longer-term improvements to energy affordability.

“Alberta’s government is providing real relief to help Albertans pay their electricity bills this winter, while making long-term improvements to the electricity system to help lower costs in the years to come,” the spokesperson said, pointing to the $500 electricity rebates and $600 in total affordability payments to eligible Albertans as other ways the government is helping.

Sweet criticized the apparent inaction on high electricity prices, instead saying the government “kicked the can down the road until after the election.”

Under the prior government, Albertans had a different sort of price protection: a 6.8 cent per kWh rate cap. That was scrapped after the 2019 election.

While prices next month are nearly five times higher than the old cap, they haven’t always been that high in the past year.

In May 2022, RRO rates from all of the utilities hovered around 10 cents per kWh.

The province’s affordability action plan website advises Albertans could switch to a fixed rate, which is offered on a term contract. Current rates on five-year terms from the companies mentioned above range from 12.6 to 16.2 cents per kWh.

Utilities also offer natural gas fixed rate contracts.