My natural gas contract is up for renewal. My current contract is for 33.9 cents per cubic metre. I can renew at that price for a year. They are also offering a 5 year contract at 31.5 cents per cubic metre. Can anyone advise me on this matter? Assuming no one out there has a crystal ball that will tell us what will happen to natural gas prices in the next 1-5 years, how do I find out who else I can buy natural gas from so that I can compare prices?
Natural gas prices
- Thread starter Questor
- Start date
G
Gord's Bro
Try this site. Enbridge (or whatever their market arm is now!) isn't there but information may help.
http://www.energyshop.com/
I recently renewed with Enbridge for a three year DECLINING rate (penny less each year) but damned if the lowest rate still doesn't seem higher than spot rate.
Good luck and let me know if you come up with some bargains, even if I have to wait three years to cash in!
G's B.
http://www.energyshop.com/
I recently renewed with Enbridge for a three year DECLINING rate (penny less each year) but damned if the lowest rate still doesn't seem higher than spot rate.
Good luck and let me know if you come up with some bargains, even if I have to wait three years to cash in!
G's B.
Thanks GB for the link to the website. That is helpful. There seems to be only minor variations in the price, although Canadian RiteRate Energy is a little bit cheaper (3 year fixed at 30.9 cents, 5 year fixed at 28.9 cents).
My utility company is Enbridge as well. But apparently because of deregulation, consumers must now choose which supplier to buy from. The supplier then sells to Enbridge who delivers it to consumer. My current supplier is Ontario Energy Savings (should be "Gouging") Corporation. So they are the folks that set the price even though I still receive my bills from Enbridge.
My supplier has also offered a "signing bonus" to me if I take the 5 year contract. The bonus is a cheque for $32.50. This strikes me as a really tacky promotion that aims to exploit the greedy streak that most of us have.
Today's prices seem to be inflated considerably from a couple of years ago. I read on one website this is because we have had cold weather which puts pressure on supplies. So I am wondering if I sign short term, the price spike may pass and lower rates will return.
Toad: your rate is lower than any of the rates I got when I plugged in my postal code at the website provided by GB. So I am wondering what you location is. I am in Toronto. What is the name of your supplier?
My utility company is Enbridge as well. But apparently because of deregulation, consumers must now choose which supplier to buy from. The supplier then sells to Enbridge who delivers it to consumer. My current supplier is Ontario Energy Savings (should be "Gouging") Corporation. So they are the folks that set the price even though I still receive my bills from Enbridge.
My supplier has also offered a "signing bonus" to me if I take the 5 year contract. The bonus is a cheque for $32.50. This strikes me as a really tacky promotion that aims to exploit the greedy streak that most of us have.
Today's prices seem to be inflated considerably from a couple of years ago. I read on one website this is because we have had cold weather which puts pressure on supplies. So I am wondering if I sign short term, the price spike may pass and lower rates will return.
Toad: your rate is lower than any of the rates I got when I plugged in my postal code at the website provided by GB. So I am wondering what you location is. I am in Toronto. What is the name of your supplier?
G
Gord's Bro
You're welcome. Not sure if we can really compare totally since, if you move away from Enbridge the distribution costs (as opposed to the actual cost of the gas), admin fees, might eat up any profit. (Have you noticed, by the way, that admin fees -- especially for electricity -- cost more than the actual product?)Questor said:Thanks GB for the link to the website. That is helpful. There seems to be only minor variations in the price, although Canadian RiteRate Energy is a little bit cheaper (3 year fixed at 30.9 cents, 5 year fixed at 28.9 cents).
Bottom line might be take a rate you can fit into your budget for as long as you can get it. That said, just don't do daily comparisons of your rate and what they are charging on a particular day - you'll drive youself nuts!!!
G's B.
Direct energy has been a great success - scaring people into locking in prices that are way too high for "peace of mind"kooley said:I don't think that you ever get screwed paying the current market rate over time.
High current drill rates and better than average inventory levels would seem to indicate that nat gas should decline. I would float as Kooley says
Yes, I agree. They are trying to scare people into locking into high prices. The cover letter I have been sent says they are "pleased to offer you continued peace of mind for an additional year from your renewal rate." I feel like they are trying to sell me a case of snake oil. Problem is they have done their job well...I am scared to go with the spot market. It has gone as high as 50 cents. The way I understand the spot market is if I do not renew with my supplier, then I automatically buy on the spot market through Enbridge. Maybe I will give them a call and see what the current price is.Cobra1 said:Direct energy has been a great success - scaring people into locking in prices that are way too high for "peace of mind"
High current drill rates and better than average inventory levels would seem to indicate that nat gas should decline. I would float as Kooley says
Thanks all for suggestions. The situation is much clearer now than it was a few hours ago. For those who are on natural gas, the energy shop link above has a lot of useful info, a Q&A section, as well as price history and projections.
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You should consider these locked in contracts much like fixing your motgage rate. No matter how they justify it in their marketing, the provider is charging you a premium as "insurance" against any spikes in market price during the term of the contract. Included in the extra premium you pay is enough to
1) cover their estimation of the expected increases
2)maintain a healthy cushion so they don't lose money
3) cover their extensive marketing costs (most of them have commisioned sales reps who are paid generously for new clients.
In the end if your budget is tight & you couldn't survive a major spike in pricing, then a contract is a good way to fix your cost. On the other hand, if you could withstand an abnormal increase in market price, you are more likely to come out ahead with market pricing.
Just like at the casino, the house usually wins, otherwise they wouldn't stay in business.
1) cover their estimation of the expected increases
2)maintain a healthy cushion so they don't lose money
3) cover their extensive marketing costs (most of them have commisioned sales reps who are paid generously for new clients.
In the end if your budget is tight & you couldn't survive a major spike in pricing, then a contract is a good way to fix your cost. On the other hand, if you could withstand an abnormal increase in market price, you are more likely to come out ahead with market pricing.
Just like at the casino, the house usually wins, otherwise they wouldn't stay in business.
http://netscape5.marketwatch.com/ne...-A94C-4429-B33B-C50C12A0875C}&siteid=netscape
'A typical household heating with natural gas is projected to spend $1,003 this winter compared with an average of $870 spent last year, an increase of 15 percent, the report said. Natural gas is a widespread heating source for homes in the Midwest.
The projected rise in natural gas costs for families is the result of an expected 11 percent rise in natural gas prices and a 3.7 percent increase in consumption compared with year-ago levels, the report said.
Demand for natural gas is expected to rise 1.5 percent this winter from last winter.'
'A typical household heating with natural gas is projected to spend $1,003 this winter compared with an average of $870 spent last year, an increase of 15 percent, the report said. Natural gas is a widespread heating source for homes in the Midwest.
The projected rise in natural gas costs for families is the result of an expected 11 percent rise in natural gas prices and a 3.7 percent increase in consumption compared with year-ago levels, the report said.
Demand for natural gas is expected to rise 1.5 percent this winter from last winter.'
RogerRabbit said:http://netscape5.marketwatch.com/ne...-A94C-4429-B33B-C50C12A0875C}&siteid=netscape
'A typical household heating with natural gas is projected to spend $1,003 this winter compared with an average of $870 spent last year, an increase of 15 percent, the report said. Natural gas is a widespread heating source for homes in the Midwest.
The projected rise in natural gas costs for families is the result of an expected 11 percent rise in natural gas prices and a 3.7 percent increase in consumption compared with year-ago levels, the report said.
Demand for natural gas is expected to rise 1.5 percent this winter from last winter.'
According to the article, actual gas prices are projected to increase 11 percent over this winter. While gas prices historically rise over time, they are seasonal & tend to move up & down with demand. My point is that 11 percent is not necessarilly a permenant increase.
Now compare the short term 11% increase in 'projected' cost to Direct energies 5 yr fixed rate plan which is currently priced at about 11% above market price.
Direct energy offers a breakdown of savings and losses realized by people who locked in. Interestingly the biggest savings were 3-5 years ago when gas prices overwent a major correction. Since then gains have been minimal & some people lost out.
Unless you believe we are imminantly due for another correction, you cannot win with a lock-in contract. IMHO
Enbridge currently sells natural gas at 28.57 cents per cubic metre. That price is revised quarterly according to market conditions. Compare that to the price offered by OESC, which is 33.9 cents on a one year contract, and 31.5 cents on a 5 year contract. Its tempting to lock in "for the peace of mind." And if a shift in gas costs was going to mean real problems for me, I would probably lock in for 5 years just for the security. But the price can go down as well as up, so I think I am going to go with the market price.
