The Secret to UTILITYnet’s Low Energy Prices


By Nick Clark

It helps to understand Alberta’s history of deregulation. When the province deregulated in 2000, many companies in the oil & gas sector moved away from buying electricity based on the regulated rates offered by the Big Utilities.

Oil & gas companies adopted a concept called Self-Retail. This meant that industry could purchase electricity and natural gas for their own facilities from the wholesale market managed by the Alberta Power Pool. The rates were based on the spot market prices. Savings were immediate and real. 

Energy management system revealed

UTILITYnet has been managing the back-office energy management and billing validation services for companies in the O&G industry for almost 40 years. When the power market deregulated, we developed the Self-Retail Service Model for many of the largest O&G companies in Alberta. And we still are providing this service today to a wider section of industries. 

It’s true. Volatility exists in the power pool spot market. Yet, it also is important to remember this mantra as prices spike periodically: What goes up also comes down and it is possible to profit when the market dips.

In 2009, we took the same core business system we created for our industrial clients and customized the model for residential and small business consumers.
Buying on the spot market makes good business sense.

By using the same administration methods built for O&G clients, we were able to offer lower retail administration fees. Hence, the birth of Spot Power. In the following years, UTILITYnet opened its doors for use by a score of other Energy Marketers who, in turn, are offering consumers a range of unique and local retailing options.

How home and small business owners save money

The concept is simple. Buy energy based on the actual market price. Spot Power adds 1 cent per kWh, as the margin, and consumers have been able to save money by getting off of the government sponsored Regulated Rate Option (RRO) and switching over to the Flow Through rate.

The numbers favour the consumer. Since January 2009, a home residential consumer in Calgary who opted for the Flow Through Option benefited – 70% of the time - from lower prices compared to the RRO.

Over the last 90 months, consumers who stayed on the ENMAX RRO paid 9% more for the energy they consumed and over 30% more on administration fees.

The market is far more stable today when compared to periods of volatility between 2010 to 2014. During the last 12 months, the Flow Through rates were lower 11 out of 12 times. During the last 6 months, consumers on the RRO paid 48% more for the energy they consumed plus 17% more for administration fees.

The bottom line is simple. Consumers benefited from Alberta’s deregulated market. The only rates that have increased are the ones that are regulated. Today, Albertans have the ability to choose from 22 independent Energy Marketers. Four more will be launching in the next couple of months.

Ok, now here is the real benefit. Take some of your savings and invest them into helping to green the grid. Green what you can afford. Do what you can, even if it is just 15% of your consumption converted to buying Greening Offsets, it will only cost you about 5 cents per day.
Save money on your energy, help green the grid; it truly is a smart move.
Ask yourself: Why continue to pay more? Why continue to support the government’s RRO program? Here’s the 22 Energy Retailers who today are operating under UTILITYnet’s umbrella.
Your comments on this blog are welcome.
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