Consumers to Pay 100% More for Natural Gas Compared to Jan 2016

The electricity market has been dominating the news this month, but there is an important piece of energy news that has been overlooked, and that’s Natural Gas prices.

Simply put, consumers will be paying 100% more for Natural Gas compared to what they paid last year in January. Why? Many things affect the price of gas, including weather (and we are in a cold snap now), storage levels, coal to gas switching, exports/imports and more. The addition of the Carbon Levy (the new tax), which comes into affect January 1, adds an extra $1/GJ to already increasing prices.

The Carbon Levy has been a controversial topic since its introduction in May of 2016. Albertans have come together to rally against it and the government is hosting a series of town hall meetings to solicit public feedback on its implementation. The changes are just around the corner, so it will be important for everyone to understand what this means to them and what they can expect come January 1.

What Can I do to Save Money?

We believe there are two things that you can do before the New Year to help offset the extra costs you will see because of the Carbon Levy.

  1. Shop Around for Competitive Utility Rates: Many consumers don’t realise that they have a choice when it comes to who supplies them with their utilities. Consumers who are still on the Regulated Rate Option (RRO) with large utility companies are paying as much as 30% more for their electricity than if they were signed up with competitive Energy Marketers like Spot Power. Some farmers in Alberta who are stuck buying electricity from their REAs are paying upwards of 65% more than the competitive rates available in the market. To see what kind of savings you could receive, just send us a copy of your current bill to request a quote from us and our Customer Care team will find the best rate for you!
  2. Take Advantage of Upcoming Energy Efficiency Programs: we recently put together a guide with 10 tips on how you can save energy this winter. These are a few quick and easy things you can do to use less energy overall. In addition to these tips, stay tuned to the UTILITYnet blog as we will be the go-to source for information on the new energy efficiency programs being rolled out by the government in early 2017. These government sponsored programs will include free installation of residential efficiency products like lighting, water fixtures, heating components and rebates for efficient appliances, lighting and insulation for your home. The government has set aside $645 million to fund Energy Efficiency programs. This is one place your new carbon tax dollars are going.

More Information on the Carbon Levy

On May 24, 2016, Alberta’s Environment and Parks Minister, Shannon Phillips, introduced Bill 20: the Climate Leadership Implementation Act. The purpose of the act is to impose a carbon levy on consumers of all carbon-emitting fuels, these include transportation and heating fuels such as diesel, gasoline, natural gas, and propane. It does not apply directly to the consumer purchases of electricity.

Starting January 1, 2017, the carbon levy will be applied to fuels at a rate of $20/tonne. In 2018 the levy will increase to $30/tonne.

Type of FuelJanuary 1, 2017January 1, 2018
Marked Farm FuelsExemptExempt
Diesel+5.35 ¢/L+8.03 ¢/L
Gasoline+4.49 ¢/L+6.73 ¢/L
Natural Gas+1.011 $/GJ+1.517 $/GJ
Propane+3.08 ¢/L+4.62 ¢/L

What impact will this have on me?

The simplest answer – costs are going up.

Every time you turn the heat up, fill your car up with gas or cook on your barbecue, you are incurring some extra cost. The price tag for every consumer? Well it will depend on your energy usage and driving habits, but an estimation for what you could expect is below. There are some exemptions - Federal building, First Nations and Marked Fuels for our farming community will be exempt. While they are exempt from paying the tax - we wonder if they will still get the rebates promised by our government?

But these aren’t the only increased costs you will see. Business also have to pay more for the gas that goes in their delivery trucks and the gas used to heat their buildings, which means in order to pay for these extra expenses, businesses will have to increase their prices. Ultimately Albertans will be stuck footing the bill. These costs, called "indirect costs" of the carbon levy are estimated to range between $50 and $70 per household in 2017, increasing to $70 and $105 in 2018.

What about rebates?

The government of Alberta estimates that 60% of Alberta households will receive a rebate that covers the average cost of the carbon levy.

Rebates will be provided to lower and middle-income Albertans. Albertans who file a tax return and meet the income criteria will automatically receive a rebate.

Partial rebates will also be available. The maximum family net income to receive a partial rebate is:

Couple With 1 Child$100,750$104,875
Couple With 2 Children$101,500$106,000
Couple With 3 Children$102,250$107,125
Couple With 4 Children$103,000$108,250

Don't be blind sided by the increasing Natural Gas prices. Take charge and explore how you can save money on your utility bill in 2017. Request a quote from a competitive Energy Marketer.

For more information on the carbon levy visit the Government of Alberta website.

Deanna McArthur | Dec 14, 2016