The regulated gas rate is set based on the market price of natural gas, and several factors contribute to price increases. These recent factors include inflation, the impacts of COVID-19, the war in Ukraine, and an unexpected increase in gas usage caused by colder weather.
How will the gas price increase impact you?
Fortunately, the gas price increase is timely with the arrival of spring. The warmer weather means most people will use less natural gas this month than last. As a result, customers can expect their next bill to be between 21% to 23% lower than last month, even with the rate hike. How much lower your bill will be will depend on how much gas you use in comparison to last month, where you live in the province and municipal charges.
How is the 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 (DERS) 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 make adjustments 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. Because we’re a regulated service you can rest assured that the prices you pay are as fair as possible. Finally, we then submit our rate to the Alberta Utilities Commission for review and approval.
DERS 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.
What happens next?
We can’t control the factors that influence the market price of natural gas, but we use valuable data to estimate the natural gas load and cost for the upcoming month. Because it’s an estimate, sometimes it’s over or under the market price.
When our predictions are under, fluctuating market prices can be in your favour. For example, in June 2017, the regulated gas rate was $1.24/GJ compared to the estimated market price of $2.80/GJ. So, you’ll pay more or less sometimes, and it works itself out over time.
We’re here to help
If you have questions or want more information about the regulated gas rate increase, please contact us.
For a list of Alberta social service agencies that may be able to provide you with assistance with your energy bill, click here.
Please check out Direct Energy Regulated Services payment plans to help make it easier to budget for and pay your energy bills.