At Direct Energy Regulated Services (DERS) we buy electricity on our customers’ behalf from an open, competitive market driven by supply and demand. The price we end up paying to wholesale producers for electricity forms the price our customers pay per kilowatt hour and it varies from month to month. Summer demand this year has been historically high due to higher temperatures across Alberta. These high temperatures not only increase demand but can also reduce the supply of electricity by limiting both the capability of thermal generators and transmission lines’ ability to move electricity.
While DERS’ average Regulated Rate Option (RRO) has been competitive over the past year, averaging 7.3 cents/kWh between August 2020 and July 2021, the RRO saw an increase in July and will again increase in August. DERS is limited on when it can purchase electricity for you and must abide by Alberta legislation and our rate setting plan that is approved by the Alberta Utilities Commission (AUC). We purchase electricity from wholesale generators in advance of the month it will be used. These are called “forward prices”. Forward prices for the summer months have been climbing, in part as a result of planned and forced outages by some generators and the impact the recent heatwaves have had on demand, resulting in higher prices for our customers.
Forward prices are expected to decrease slightly in September and are currently forecast to come down through the fall as generators on outages come back online. The Alberta market has seen high prices before, but they have come back down as higher prices encourage more supply to be made available and new generators to be built.
We know unexpected rate increases can be tough to budget for, which is why we offer the Budget Billing plan. Budget Billing allows you to spread your energy costs equally throughout the year to make budgeting and planning easier. You can sign up through our Online Account Manager or by calling one of our friendly advisors at 1-866-420-3174.
In the meantime, you can help reduce your electricity consumption with a few changes such as closing your blinds during the warm parts of the day, opening windows in the morning and evening to take advantage of a cooler breeze, and utilizing your barbecue rather than your oven. Take a look at our other handy energy saving tips for any season, found here.