Enmax fixed vs. floating rates...

[topfiverecords]

Originally Posted by Sylvanfan

Probably let's you keep the AC off in the summer.

Luckily due to proper architecture there is never a requirement for AC.

[Zary's-Mustache]

Originally Posted by accord1999

It's really not much of a gamble, since you can change from one to the other once a month.

Yes but then why have it this way? I think it's purposely made like this so people pick one, forget about it and pay more. Why else would it be like this? I'm honestly curious because I don't know if other provinces or countries do it like this.

I just don't see why we can't just have one rate.

[Zary's-Mustache]

Originally Posted by photon

I may need to increase my parents' rent

I may need to increase my mom's rent as well about 50%

What's 50% of 0?

[Bill Bumface]

Originally Posted by Zary's-Mustache

Yes but then why have it this way? I think it's purposely made like this so people pick one, forget about it and pay more. Why else would it be like this? I'm honestly curious because I don't know if other provinces or countries do it like this.

I just don't see why we can't just have one rate.

It's like mortgages. You can choose, based on your risk tolerance. One gives you a guarantee, one can go up or down. You pick.

Having one rate means you don't get to make that decision for yourself.

[topfiverecords]

Originally Posted by Zary's-Mustache

Yes but then why have it this way? I think it's purposely made like this so people pick one, forget about it and pay more. Why else would it be like this? I'm honestly curious because I don't know if other provinces or countries do it like this.

I just don't see why we can't just have one rate.

When people call to complain about how expensive their bills are they can throw it back in their face that they personally made the wrong choice and it's not Enmax's fault.

[Bring_Back_Shantz]

Originally Posted by Zary's-Mustache

Yes but then why have it this way? I think it's purposely made like this so people pick one, forget about it and pay more. Why else would it be like this? I'm honestly curious because I don't know if other provinces or countries do it like this.

I just don't see why we can't just have one rate.

It's this way because the Ralph Klein government decided we should have an energy only electricity market.

The fixed rate is utility companies giving you the option to lock in your rate if you don't like the idea of your cost swinging unpredictably.
For reference in 2022 we saw average prices as high as $0.30/kwh, and last month it was $0.063/kWh.

It's not purposely made this way by utility companies so you forget and end up paying more, it's the law that the floating rate exists, and utility providers are giving you an option that provides certainty (may also be legislated, I don't know that part of the retail biz).

Like Bill said, it's a risk tolerance thing. If you want to know what your bill will be, lock in.
If you are okay with it going up and down and think you'll save money that way, you can pick that option.

I've been on a fixed rate for some time and absolutely killed it, savings wise for the last few years. The last 2 months I've been paying slightly more.
Now with the fixed rate at (I think) ~$0.115, I may go floating when my fixed rate expires later this year.

[timun]

Originally Posted by bizaro86

I think the biggest argument for rolling the fixed costs into the price of gas is that it would incentive people to reduce consumption. Right now it basically doesn't matter.

I think the underlying problem is that people think of the delivery costs, rate riders and other charges as "fixed" and therefore there is no incentive to reduce consumption, when mostly they are not fixed. The rate is fixed by the AUC, you can't shop around for a better 'deal' on these charges, but the total charge tracks with your consumption.

Dissecting my last bill for example, I had 29 days, 9.78 GJ, $136.30.

(Amounts marked with an asterisk below are off by a penny due to rounding.)

My energy charge is a fixed $4.09/GJ, so $4.09 x 9.78 = $40.00
My administration charge from Enmax is $0.28 per day, so $0.28 x 29 = $8.11*.

The fixed delivery charge is $0.885/day, so $0.885 x 29 = $25.67
The variable delivery charge is $0.977/GJ, so $0.977 x 9.78 = $9.55*
The only rate rider applying right now is Transmission Service Charge Rider T, which is $1.258/GJ; $1.258 x 9.78 = $12.31*

The municipal franchise fee paid to the City of Calgary is far and away the most complicated part of the bill, because it's 11.11% of the "gross revenues" (energy charges + delivery charges + rate riders), but charged at the "deemed value of natural gas" equal to the gas cost flow through rate rather than the actual energy charges. The "deemed value" was $4.430/GJ for February and $2.133/GJ for March, and the weighted, blended cost "deemed value" against which my energy was charged to calculate the municipal franchise fee was ~$2.612/GJ.

$2.612/GJ x 9.78 GJ = $25.55
$25.55 + $25.67 + $9.55 + $12.31 = $73.08 x 11.11% = $8.12

Carbon tax was $3.3267150/GJ; $3.3267150 x 9.78 = $32.54


$40.00 energy charge
+ $8.11 admin charge
+ $25.67 fixed delivery charge
+ $9.55 variable delivery charge
+ $12.31 rate riders
+ $8.12 municipal franchise fee
+ $32.54 federal carbon tax
$136.30


Now, out of all of those charges, only $36.63—comprised of the $8.11 admin charge, the $25.67 of fixed delivery charge, and $2.85 of the municipal franchise fee—were fixed, per-day charges I had no control of whatsoever. The other $99.67 worth of charges were variable, tied directly to my consumption. My effective consumption charge was $10.19/GJ, and that's the figure I should use as the base of any decisions on energy-reduction measures.

And here's the big problem:

I do think rolling it in has the potential to increase the fixed charges over time though, because if they're less visible there will probably be less push back from the regulator to keep them reasonable. And 10% increase yearly are really significant once they start compounding.

We're already in this situation. Consumers don't see the rates that underlie the delivery charges, rate riders and municipal franchise fees, so there's essentially no pushback from the consumers whatsoever other than vague notions of "this is bull####", which no one (i.e the AUC) take seriously.

[Zary's-Mustache]

Thanks for all that. You seem really knowledgeable on this stuff. Do you think a floating gas is a good idea right now?

[timun]

From a couple pages back :

Originally Posted by timun

If you've been paying a fixed rate less than $3.70ish/GJ, then it's been pointless to switch to floating. If you're paying more on a fixed rate than that, then it hasn't worked in your favour for over a year now

Given you're on $4.79/GJ fixed, there's no harm in switching. Might as well. Frankly you won't see much difference over the summer anyway, unless you do a lot of barbecuing with natural gas.

[DoubleK]

Originally Posted by timun

I think the underlying problem is that people think of the delivery costs, rate riders and other charges as "fixed" and therefore there is no incentive to reduce consumption, when mostly they are not fixed. The rate is fixed by the AUC, you can't shop around for a better 'deal' on these charges, but the total charge tracks with your consumption.

What would you suggest as an alternative? Alberta Hydro?

As for your other point on consumers don't push back and the AUC simply rubber stamps rates, my experience in rate proceedings would strongly disagree with your statement.

[timun]

I'd start with publishing delivery charges, rate riders, etc. on everyone's bills. We show the math for the energy charges: we should show it for everything else.

With respect to pushback in rate proceedings: in my experience the average consumer doesn't even know the AUC exists, let alone what they do and that they have rate proceedings in the first place. Hence the anger at the situation: they have no idea what the charges on their bills are, just that they're there and it doesn't seem to matter how much energy one uses, and they feel they're getting ####ed one way or another.

[MRCboicgy]

Originally Posted by topfiverecords

Is your reduced energy consumption correlated with your recent increase in hot air?

Really?

[DoubleK]

Originally Posted by timun

I'd start with publishing delivery charges, rate riders, etc. on everyone's bills. We show the math for the energy charges: we should show it for everything else.

I don't disagree with you but what would that accomplish? You've pointed out problems but zero solutions.

With regard to the rest of your post, I will file that under rhetoric. The utility I used to work for kept their rates flat for 6 years, something that I was quite proud of. Not one of our peers did the same. In my view, they left money on the table as they clearly didn't get any social license for doing it.

[Whynotnow]

Originally Posted by timun

I'd start with publishing delivery charges, rate riders, etc. on everyone's bills. We show the math for the energy charges: we should show it for everything else.

With respect to pushback in rate proceedings: in my experience the average consumer doesn't even know the AUC exists, let alone what they do and that they have rate proceedings in the first place. Hence the anger at the situation: they have no idea what the charges on their bills are, just that they're there and it doesn't seem to matter how much energy one uses, and they feel they're getting ####ed one way or another.

Having worked at a utility for a dozen years myself I can fully support this. I can’t count the number of times people came at me with the discussion around their gas costs were only $20 this month but the delivery charges were $80, it’s such a ripoff. I’d calmly explain they are paying for billions of dollars of infrastructure that extend back from their house all the way to the wellhead basically. Then, and since this conversation often took place at the golf course I’d ask them what their new driver cost. Often it was nearly $500, and I’d ask them how much actual raw material is in that driver, we’d probably agree at most it’s $50 bucks, The rest is to pay for the advertising, the factory, the r and D costs, and obscene profits, etc, the difference is you don’t get an itemized bill for it.

Understanding utilities isn’t that hard, but most people don’t take the time to.

[Raekwon]

My plan expires in August and i'm really dreading going from 0.0679/kWh to the lowest I see offered rate now 0.11/kWh and Gas $3.79/GJ.

So i'm finding the floating rates a little confusing

NSFW!

Electricity Variable Rate Plan†
(Variable + 0.40 ¢ / kWh) (+ Admin Fee $9.35 / Site / Month) No Early Exit Fees

and

NSFW!

Electricity Fixed 5 Year Plan†
9.92 ¢ / kWh. Admin $13.35/Month. No enrollment fees. No early exit fees.

, at an average of 2000kWh/month for Electricity and average of like 5 GJ/Month for Gas. Looking at Electricity prices from last summer it feels like variable is a bad idea for electricity, no?

https://www.epcor.com/products-servi...ity-rates.aspx and Gas still seems like variable is best? https://www.alberta.ca/alberta-natur...eference-price

[timun]

Originally Posted by DoubleK

I don't disagree with you but what would that accomplish? You've pointed out problems but zero solutions.

Is showing the math not a solution to the problem of consumers believing the regulated delivery charges are fixed and they have no control over them? Maybe I have too much faith in people, but I was hoping it would alleviate a lot of griping about how "it doesn't matter how much gas I use because all those other bull#### charges are 80% of my bill anyway!" if people are shown that most of the "bull#### charges" would go down if their consumption went down.

Originally Posted by DoubleK

With regard to the rest of your post, I will file that under rhetoric. The utility I used to work for kept their rates flat for 6 years, something that I was quite proud of. Not one of our peers did the same. In my view, they left money on the table as they clearly didn't get any social license for doing it.

This goes to my point though: how would consumers know that you kept rates flat if you never showed them the rates?

[topfiverecords]

Originally Posted by MRCboicgy

Really?

Concerns?

[PepsiFree]

Originally Posted by timun

Is showing the math not a solution to the problem of consumers believing the regulated delivery charges are fixed and they have no control over them? Maybe I have too much faith in people, but I was hoping it would alleviate a lot of griping about how "it doesn't matter how much gas I use because all those other bull#### charges are 80% of my bill anyway!" if people are shown that most of the "bull#### charges" would go down if their consumption went down.

If this was in reference to my comment, it was more about the actual price of the gas/electric than the usage. I understand at a high level that it all goes up and down with consumption, my point was more that it seems like the difference between a rate of 2.79 vs 3.79 barely matters since it’s such a small portion of the bill.

Unless you’re telling me that all those other charges go up or down based on your rate as well.

[Sylvanfan]

Well I'm annoyed that my daily admin fees and fixed delivery charges are both up approximately 10% this year with the fixed delivery also hitting my local franchise fee. Those are sizable increases.

[Sylvanfan]

Originally Posted by PepsiFree

Unless you’re telling me that all those other charges go up or down based on your rate as well.

The way Calgary calculates the Municipal franchise fee, the market cost of the gas does impact that charge.

But that's supposed to stop and go to a consumption based model. Which as best as I understood was in the works to happen by 2027...and current regulations being the delay. More politicians saying they're making a difference when they're just taking out a barrier they previously created.

There's a lot of variation in that fee though. I'm in St.Albert where we pay 20.3% of the other fees to make up our franchise fee. In Edmonton its 35%. Looking at a list last night its anywhere from 10 to 37% depending on the Municipality