Prices Soar as Alberta Recovers from Cold Snap

By March 8, 2021 General No Comments
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2020 was a year to remember (though some would gladly forget!). Still, as we stepped into 2021, nature had a surprise up its sleeve for Albertans. Frigid temperatures dipped to -40°C and held there, causing energy demand to rise steeply and prices to increase as a result.

We’re no snowflakes where living in cold conditions is concerned, but this year’s circumstances contributed to a higher demand than in previous years. With more people unemployed or staying at home due to Covid restrictions, residences required more power than in previous years and the early winter sunset meant demand was up throughout the day, peaking between 5 pm and 7 pm This increase was felt, not just in Alberta, but in North America generally. Floating rates for electricity saw increases from 5 ¢/kWh to 13 ¢/kWh in only a few days the AESO (Alberta Electric System Operator) reported demand of 11,729 MW — a 31 MW increase from January 2020 (or the equivalent of 20,000 additional homes).

With Alberta’s power grid supported by 26,000 kilometers of lines and 235 units for generation, the province was able to meet the demand but neared a level 3 outage. Levels are indicative of how much energy is being used and what reserve remains. Level 1 indicates that all energy resources are in use, with some reserve remaining while a level 2 requires additional electricity to be brought in from producers outside the area. A declaration of level 3 would have resulted in necessary rolling blackouts to support our province’s most urgent needs. Yes, even the mailman who delivers in rain, sleet or snow was forced to issue a code yellow, indicating a possible disruption in service due to these extreme temperatures.

ENMAX has reported that for every ten degree drop in weather, the average home uses 40% more energy to maintain comfortable temperature and adequate lighting.

Crisis in Texas

In a bizarre weather event, a polar vortex also moved into the state of Texas last month, causing power outages as far as Mexico. Due to the state’s infrastructure being built to support high temperatures, it was not equipped to provide the emergency support required and the situation became dangerous for many Americans who struggled to stay warm, with some outages lasting as long as three days.

Contributing to the infrastructure problem was the fact that green energy generation was hindered by snow and ice-covered solar panels, frozen-in-place windmills, and frozen piping at more conventional generation facilities, further restricting supply while demand rose to critical heights and crisis ensued. Scarcity pricing rose from 3 ¢/mmBTU USD to over 500, leading variable costs to rise by 100x their normal price for this time of year.

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Controlling Pricing by Controlling Use

Despite our understanding that utility prices increase in the winter months, there is much you can do at home to ensure that you are making the most of the energy you need and cutting use where you don’t.

  1. Plugging in Your Vehicle — Many Albertans are in the habit of plugging in when they arrive home at the end of the day and unplugging before they leave the following morning. While plugging in is important, consider using a timer to limit the number of hours to between three and four hours to save unnecessary cost.
  2. How Hot is Your Water? — To conserve electricity, consider decreasing the temperature setting on your water heater to a lower temperature. With lower temperature, your water heater requires less energy and showers can still be comfortably warm.
  3. Out with the Old — Are you still using incandescent or halogen bulbs in your home? These bulbs use drastically more electricity than a newer LED light and provide the same quality lighting. Consider a switch to LED lighting and see decreases in your monthly power bill.
  4. Drying Laundry — Do you use your dryer for all of your family’s laundry? Decreasing reliance on the dryer will decrease your power charges and hanging clothes to dry is effective due to Alberta’s low humidity index.
  5. Fridges and Freezers — Are you running an additional beer fridge, freezer or refrigerator? Unplugging those that you don’t use daily decreases your energy use and puts money back in your pocket.
  6. Standby on Appliances — Do you know that appliances in your home are using electricity even when they’re not in use? Major appliances, like fridges, are in constant use but others, like televisions and computers, can be unplugged when not in use. Don’t know where to start? Wattage testers will show you which appliances draw the most standby power. Simply unplugging these appliances when not in use can have a considerable impact on your monthly power consumption.

We may not be able to do away with the harsh Alberta winters, but taking small steps to reduce your power use is not only a good practice for cost savings, it’s kinder to the environment too.

For more information about our electricity and natural gas services, visit burstenergy.ca