Alberta: It’s Time to Fix Your Utilities

By April 19, 2022 General No Comments


With market uncertainty and inflation on the rise, now is the time to lock in your natural gas and electricity pricing!

It’s the end of April, and we’re nearly there — spring is around the corner. As we come out of winter and the shock of commodities spiking in those frigid months, many of us look forward to the end of the season for relief from high heating and electricity pricing. With so many new variables to contend with, however, utilities pricing is expected to continue to rise.

Factors Impacting Commodity Pricing

Going Green in the Great White North

As the Alberta government prioritizes green energy and closes coal-fired plants, questions remain about the capacity and reliability of the remaining systems. Bearing in mind that natural gas producing approximately 278 kWh for every gigajoule, the relationship between these commodities is yet another factor to be considered.

December of 2021 was a cold month in Alberta and, while this is to be expected, the extreme drop in temperatures in the last week of that month put considerable strain on the electrical grid. Despite this, TransAlta, eager to meet its very public commitment to getting out of coal, announced this achievement on December 31st:


“…This achievement, coupled with TransAlta’s growing and diversified generating portfolio, including hydro, wind, solar and battery assets, helps position TransAlta to be a highly competitive provider of reliable, low and zero-emitting electricity for customers in Canada, the United States, and Australia.”

While this outward celebration was occurring, however, coal-fired plants were still working at nearly full capacity. In fact, the day that the Keephills plant was to be shut down, it was actively (and necessarily) producing over 300MW of its 395MW capacity. Both Highvale and Keephills #1 were shut down in December, and while other plants have been converted to natural gas generation, these units were permanently taken out of service.



On its last day, Keephills Unit 1 was producing 400% of the electricity offered by all green energy combined — at 75% capacity.


Alberta’s wind and solar generation capacity is a combined 2,605MW in the best weather conditions. With reduced daylight hours in the winter and wind turbines fins becoming dangerously brittle to operate beyond -30°C, green energy generation was abysmal. Solar farms (13) were moving 58MW of a possible 336MW and wind was producing 18MW of a possible 2,269MW. With a portion of our electricity grid being reserved exclusively for green energy, pressure is put on traditional energy generation systems which impacts consumer pricing. This begs the question: In a frigid winter climate that cannot safely sustain outages, will the current approach be sustainable for Albertans?

Carbon Tax

The Federal Carbon Tax began with a fee of $20.00/ton and continued to increase by $10.00/ton annually. This tax is passed on to the consumer, and revenue is expected to exceed $1.8 billion by the end of this year. As businesses incur more cost due to the Carbon Tax, the consumer feels the pain at the grocery store, in the cost of air travel, and at the pumps, to name only a few. Jason Kenney’s gas and diesel tax suspension is expected to reduce the price of diesel and gas by 13 cents per litre. Although these measures may be marginally helpful, expect the price reduction to disappear if the West Texas Intermediate stays over $90 USD.

Pandemic

Since the onset of COVID-19, uncertainty has played a large role in the interest and confidence of investors in the Alberta economy. Coupled with ever-changing mandates, this sense of uncertainty has further hampered the economy, since none of us know for sure when these mandates will cease. Without confidence that Alberta businesses can resume their efforts, investors tolerate less risk.

Geopolitics

Continued conflict between Russia and Ukraine further decreases investor risk tolerance. With increased scarcity of oil products, scarcity of natural gas follows, as natural gas is a by-product of oil extraction. The impact of this scarcity drives price increases across the board and is likely to continue in this trajectory.

Why Burst Energy?

Burst Energy is proud to be a part of small number of independent retailers who offer fixed rates on natural gas and electricity. Fixed rates introduce more stability in your utility bills month-over-month then variable rates and mitigates the cost of heating spikes that are often seen in our colder months. In the current market conditions, we recommend you select a fixed price.

Burst Energy is also a member of the UCA Helps retailer network and is actively listed on this trusted Alberta Government run website.

We offer fixed rates of 7.49¢/kWh and $5.47/GJ respectively and this pricing remains valid for 5 years. Click here to learn more or email quotes@burstenergy.ca to get your complimentary bill review today. Join the already thousands of Albertans who are serviced by Burst Energy and enjoy some of the lowest fixed rate utility pricing available on the market today.