Natural gas prices down, electricity up in Alberta in February

For the fifth straight month, natural gas prices in Alberta are not high enough to trigger the province’s rebate.

The province issued a bulletin Thursday saying the standard price of natural gas in February is $3.715 per gigajoule (GJ), well below the trigger rate of $6.50 per GJ and $6.446 per GJ in January.

When the natural gas rebate was originally announced, it was to apply for the six-month period 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 for Affordability and Utilities Secretary Matt Jones, said in a statement.

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However, electricity prices are developing in the opposite direction.

Data from the Alberta Utilities Commission on Friday showed that the Regulated Rate Option (RRO) – the standard rate for electricity customers without a contract – has risen again.

Enmax customers in Calgary will see RRO prices rise from about 27 cents per kilowatt hour (kWh) to almost 29.7 cents per kWh in February. Epcor and Fortis RRO customers can expect a price increase from 30 cents per kWh to almost 33 cents per kWh. Direct energy RRO rates will increase from 27 to 32.7 cents per kWh.

Blake Shaffer, an assistant professor of economics at the University of Calgary, tweeted that the rates were new all-time records.

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Albertans on RRO do not have to pay the full brunt of persistently high prices under the government’s electricity price protection.

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From January to March, all prices above 13.5 cents per kWh are paid back over the 21-month period from April 2023 to December 2024.

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

The opposition said the government had “poorly managed” the electricity system and said “its incompetence means Albertans are paying higher bills”.

“Albertans are already struggling to keep the lights on and food on the table, but month-on-month electricity costs have been rising under the UCP with little to no help from Albertans,” said Heather Sweet, MLA of Edmonton-Manning in an opinion.

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

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

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

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Under the previous government, Albertans had a different kind of price protection: a cap of 6.8 cents per kWh. This was abolished after the 2019 election.

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

In May 2022, all utilities’ RRO rates were about 10 cents per kWh.

The province’s Affordability Action Plan website indicates that Albertans could switch at a fixed rate offered on a fixed-term contract. The current tariffs for a five-year term from the above companies are between 12.6 and 16.2 cents per kWh.

Energy suppliers also offer natural gas fixed rate contracts.