Are Natural Gas Prices Going Down?
Thanks to milder weather and lower demand this winter, the regulated natural gas rate in Alberta has dropped significantly. And the good news is that it’s forecasted to remain low in the upcoming months! There’s no better time than now to be on the regulated rate for natural gas.
What are the benefits of choosing regulated rates?
- When market conditions are favourable, the regulated rate can be lower than the fixed rate plans available.
- The rate is reviewed and approved by the Alberta Utilities Commission to ensure that it is reasonable and fair.
- You don't need to sign a contract with us when you register, and there are no enrollment or exit fees.
- In most cases, we can turn your regulated electricity or natural gas on as soon as you need it.
How does the regulated natural gas rate compare to fixed rate plans?
The regulated rate is set based on the market price of natural gas, which fluctuates according to several global and local factors. For instance, in 2022, natural gas prices more than doubled due to the impacts of COVID-19, the war in Ukraine and extreme weather conditions. However, when you average the regulated rate over the year, it was $5.82/GJ which was on par and, in some cases, lower than fixed-rate plans available in the market at the time.
How is the natural gas price determined?
We know that the market price for natural gas fluctuates depending on factors and circumstances worldwide, similar to gasoline for your vehicles. Based on market conditions, our team at Direct Energy Regulated Services estimates how much natural gas our customers will need and how much it will cost us to buy it from the producers in the month ahead. We also adjust depending on whether the rate from the month prior was too low or too high.
If the rate forecast was high, and we collected too much from you this month, then that extra amount is subtracted from the next month’s rate. If it’s low, we add the excess to the next month’s rate. Since we’re a regulated service, you can rest assured that the prices you pay are as fair as possible. Finally, we submit our rate to the Alberta Utilities Commission for review and approval.
Direct Energy Regulated Services does not influence the distribution and other fees you might see on your bill. However, we work hard to ensure our pricing for natural gas is accurate, consistent and fair based on current market conditions.
Read more about how we set our natural gas prices.
*The forecast is based on the current forward wholesale natural gas price curve on August 25, 2023, and will not be the exact rates. Natural gas rates can change suddenly based on weather, unplanned infrastructure outages, and global events.