Get the inside edge on rates
Why does my rate constantly change?
The price of natural gas in Alberta is impacted by many different factors, including supply and demand, the economy, world events, currency exchange rates and weather. Unusually hot or cold temperatures or changes in weather patterns can affect energy rates - as can extreme weather such as hurricanes. The regulated rate is based on the spot price for wholesale natural gas in Alberta.
Like a lot of things, electricity prices are influenced by supply and demand. Here's an example of how this works: Recently, Alberta has seen an increase in population. With this population increase, there has been an increase in electricity demand. But if demand for power increases, and there are no new power plants built, electricity prices will increasse simply because the demand is higher while supply remains the same.
Another example: In Alberta, natural gas-fired generators are often used. Since power prices are also determined by the cost of raw materials used to create electricity, higher natural gas prices may result in higher electricity prices.
How are these rates set?
The Regulated Rate Option(RRO) is decided under a predetermined price-setting plan that was approved by the Alberta Energy and Utilities Board (EUB) which is now called the Alberta Utilities Commission (AUC). In 2006, the RRO changed to include an annual increase in the portion of electricity that reflects current monthly market-based prices. Today, 100% of the rate reflects monthly market-based prices. This means rates may be more unpredictable month to month, due to factors such as weather, the economy, supply and demand and fuel costs. The rate is submitted monthly for AUC review.
The regulated natural gas rate is the rate you pay for natural gas if you have not chosen to enter into a contract with an energy retailer.
The natural gas rate is based on two things: a forecast of market prices for the upcoming month and the amount that has been over - or under collected form previous months. Near the end of each month, a natural gas rate for the upcoming month is filed with the AUC for review.
What is Direct Energy Regulated Services?
Direct Energy Regulated Services (DERS) is a business unit of Direct Energy Marketing Limited focussed on providing energy adn billing services for customers seeking default service in the ATCO Gas adn ATCO Electric distribution areas. DERS serves approximately 900,000 enegized sites across the province.
Direct Energy is a wholly owned subsidiary of Centrica PLC which is a multi-billion dollar company based in the United Kingdom with operations across North America and the U.K.
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