Alternative fuels in Alberta

While electricity and natural gas are common sources of energy in Alberta, many households and small businesses in Alberta still use alternative fuels, particularly in rural areas. For Fall 2022/Winter 2023, the Alberta government announced a natural gas rebate, given that a household meets the eligibility requirements. However, non-natural gas rebates are also available for propane, heating oil and kerosene if the site meets the specified eligibility requirements for whichever specific fuel.  

Read on to learn more about alternative fuel types and their availabilities. 

Propane 

Also known as liquified petroleum gas, propane is an alternative fuel that is the result of natural gas processing or crude oil refining. Common applications for propane include cooking (barbecues, gas burners, etc.), space heating, water heating and crop drying. Additionally, it can be used for transportation such as buses and other high-mileage vehicles. 

Typically, propane is stored at high pressure inside tanks – when the pressure is released, it vaporizes and turns into gas used for combustion which allows for the applications mentioned above. 

Canada produces around 11 million cubic metres of propane per year, with approximately 50% of this figure being exported. According to NRCAN, around 1% of Canadian households heat their homes with propane, with the majority of these homes being in Ontario. 

Currently, as of mid-to-late 2022, there are supply-chain issues in regards to propane according to CTV news article. As such, there has been a spike in the cost of propane to 86 cents, versus the price last year which was 67 cents. 

Heating Oil 

Also known as furnace oil, home heating oil is a by-product of crude oil made from the distillation of petroleum. As the name implies, heating oil is typically used for heating applications. There are two types of heating oil – kerosene and gas oil. Gas oil is used for commercial and agricultural purposes, while kerosene is more so used in homes. 

Much like propane, kerosene and gas oils are combustible, which allows for heating. 

According to the Canada Energy Regulator, heating oil is used more frequently in Atlantic provinces, like Prince Edward Island and Nova Scotia. Overall, across Canada, fuel oil makes up just 4% of residential heating energy, with very little use in non-Atlantic provinces. 

Like propane, furnace oils are also seeing a sharp increase in price due to low global inventories, according to a CTV News article. 

What are alternative fuels used for?

The definition of alternative fuel covers a broad spectrum. For this answer, we’re considering “alternative” as a fuel option other than electricity and natural gas. According to the 2016 Household Energy Use report by the World Health Organization (WHO), alternatives fuels are more commonly used for the following activities:

• Cooking.
• Heating.
• Lighting.

Learn more about how you can manage your energy costs: 

In Alberta, the energy market is deregulated, meaning consumers are free to select the energy products that suit their requirements. EnergyRates.ca, a free website in Canada, an unbiased cost comparison tool that can help you find the best energy rates in your area. Residential, small business, small commercial, large commercial and industrial electricity and natural gas consumers can all use EnergyRates.ca. It’s easy – all you need to do is fill in the form above to get started. 

2022 has been an expensive one for people throughout Canada and the rest of the world.

In Alberta, gas prices have hit heights not seen in years, Albertan electricity prices hit record heights this year, and similarly, natural gas prices hit heights not seen since 2008, reaching prices as high as $9/GJ. While the price of driving, heating our homes, and energizing our gadgets, and driving have all gone up, there are some attempts to alleviate this financial crunch coming from the government.

Previously, the Albertan government had announced plans to help Albertans by offering an electricity rebate and removing the provincial fuel tax. Another initiative, announced in February during the provincial budget, is the introduction of a Natural Gas Rebate. While not much about the specifics had been announced at the time, recently the Provincial government has announced more details on this rebate, which we will detail below. Some specifics are still being determined, which we will update on this page as announcements are made.

The natural gas rebate in Alberta: dates and amounts

From October 2022 to March 2023, eligible Albertans will see a rebate applied directly to their utility bill if the conditions of the rebate are met.

When the regulated natural gas rate offered by one of three of Alberta’s regulated utility providers (which are ATCO North, ATCO South and APEX Utilities) surpasses $6.50 per gigajoule, eligible Albertans will have the difference returned to their pockets.

Rebates will cover the difference between $6.50 and the regulated rate that calendar month. For example, if the rate is $7.50/GJ, eligible consumers would get a rebate on their bill covering $1 for every gigajoule used.

The rebates will start in fall 2022 and will last throughout winter 2023. While we have already seen sharp spikes in energy bills in the last year, the colder weather of these months combined with increased demand mean that natural gas – relied on by many Albertans to heat their homes – typically sees its price spike during the colder months. Offering rebates during this period makes sense to alleviate our energy bills when they reach their peak. Check out this article to understand how extreme winter temperatures can affect your heating costs, as well as for other ways to save when the thermometer drops.

On their page, the UCP government added that “[they] are working with utilities and regulators to determine the exact details of the program”. As that information is released, we will update this article accordingly.

Eligibility

Since you will automatically receive the rebate if you are eligible, knowing the eligibility requirements will be important. You are considered eligible for the rebates if you meet the following criteria:

• You are “connected to the system”.
• You are on either a regulated plan or a competitive plan for your natural gas.
• You use less than 2,500 gigajoules of natural gas annually.

Non-natural gas rebates are also applicable if you use alternative fuels to heat your household, small apartment building complex, or small industrial or commercial site. If you use less than the listed limit of the following alternative fuels, you should be eligible for

• Propane: 16,334 litres per month
• Heating oil: 10,780 litres per month
• Kerosene: 11,068 litres per month

How will the natural gas rebate work for Albertans with a competitive retailer?

Since the rebate will be triggered by regulated rates in Alberta, many questions started to pop up, including how this would work for households and businesses under competitive retailer plans.

Our team reached out to the Ministry of Natural Gas and Electricity to understand more, especially because floating or fixed competitive rates differ from regulated rates quite often.

Although the rebate will trigger when the highest default natural gas rate among the three default gas suppliers is above $6.50/GJ, it will be applied to all eligible consumers, including those who have a variable or fixed rate below $6.50/GJ. According to the government, this ensures that customers will not be penalized for taking measures to protect against potential future price spikes by signing contracts.

For example, if the default rate tariff rose to $7.00/GJ in December 2022, then all eligible consumers, competitive contract or on the RRO, would receive a rebate of $0.50/GJ on their bill ($7.00/GJ – $6.50/GJ = $0.50/GJ rebate). The rebate amount would be calculated as above and applied directly to the utility bill by the service provider.

The provincial government warned of a recent utility bill-related scam targeting Albertans this Spring.

With Albertans impatiently waiting for the $150 electricity bill relief announced last March, scammers are taking advantage of consumers and sending fake text messages on behalf of the provincial government.

READ MORE: How to Avoid Gas and Electricity Scams

These phishing text messages have been offering a $300 rebate — which is double the amount announced by the government, $150 — and usually include a link. 

Authorities are now asking Albertans not to click on any suspicious links or share any personal, banking, or energy account information via text messages.  

🚨Phishing scam alert🚨
If you’ve received this message offering an energy rebate, don’t click on the any of its links, or provide any personal or banking information – it’s a scam. The @YourAlberta rebate will be applied directly to bills, with more information coming soon. pic.twitter.com/6c5Y7ipKa8

— Service Alberta (@ServiceAlberta) May 4, 2022

A Facebook post by Consumer Protection Alberta also says: “The text also contains a URL that has “Service Alberta” in it. Albertans who receive this message or any other electronic message claiming to offer energy rebates should not click any links or provide any personal or banking information.”

With skyrocketing energy bills and the increasing number of consumer complaints, Service Alberta has announced that the government will NOT send rebate-related text messages to Albertans, and that consumers will NOT have to claim their rebates.

The $150 rebate will be paid in three $50 monthly payments and will be directly applied to monthly electricity bills this summer. 

If you believe you are a victim of fraud or suspected fraud, authorities suggest you call your local police department for help, or the Canadian Anti-Fraud Centre at 1-888-495-8501.

There is a wide range of dangers related to clicking on malicious links. This could install malware, viruses, or ransomware on your device, and make it easier for scammers to retrieve your passwords, personal information, payment details, photos, files, and more. 

READ MORE: Rising natural gas prices: Why are natural gas rates so high in Alberta?

How Bill 86 could impact Alberta’s electricity grid

The Alberta government introduced Bill 86 in November 2021, which talks about integrating energy storage into Alberta’s interconnected electric system.

The previous legislation and regulatory framework restricted the use of energy storage technologies because of the following reasons:

• Lack of technical know-how on how costumers could self-supply and also send the excess to the grid.
• The absence of specific rates for energy storage resources in the AESO and distribution utilities’ tariffs.
• Lack of clarity or process concerning when and how energy storage resources may be considered as non-wires alternatives.
• Lack of clarity on how energy storage assets would be treated concerning a utility’s rate base, whether the utility owns the asset or obtains the services under contract with a third-party-owned asset.
• Lack of clarity on how energy storage assets would be treated concerning a utility’s rate base, whether the utility owns the asset or obtains the services under contract with a third-party-owned asset.

This bill intends to update the existing legislation with evolving energy technologies to enable greater integration of technical innovations to Alberta’s electricity system, providing long-term benefits for both consumers and the electricity industry.

This new bill will require participating companies to meet public health and safety standards and pay tariffs set by the Alberta Electric System Operator (AESO) to keep them from driving up electricity costs for consumers. The new system will also help Alberta prepare for the rise of electric vehicle charging, rooftop solar power and bi-directional charging between EVs and the grid.

As Alberta becomes the hub of clean technology innovation and implementation, passing this bill under the Electricity Statutes Amendment Act will:

• allow the integration of energy storage into Alberta’s interconnected electricity system in both the competitive electricity market and the transmission and distribution system.
• allow unlimited self-supply with export, technology that allows electricity to be generated on-site with excess power sent to the grid while ensuring that transmission system costs are balanced among all system participants.
• build on the Alberta Utilities Commission Distribution System Inquiry on modernizing Alberta’s electric distribution system to ensure the cost-effective integration of distributed energy resources in the system.
• add a requirement for distribution owners to prepare long-term plans as per future regulations, which will describe the outcomes and timing of the plans.

When fully functional and implemented, and if passed, this will also allow consumers to become a generator and earn through the sale of electricity to the grid.

Would this new piece of legislation require technological changes?

Bill 86 allows competitive procurement of energy storage resources as non-wire solutions, which refers to investments or operating practices that replace the need for building or expanding distribution or transmission systems.

This would open up participation in the province’s power grid, allowing companies to self-supply unlimited amounts of power and sell excess amounts to the grid for consumer use. Once passed, this bill will also make the amendments of upgrading the distribution system to allow bi-directional transfer of electricity and monitoring the same.

Bill 86 would encourage forms of energy storage like battery storage systems which could help deal with the ‘intermittency’ of renewable energy, decrease carbon emissions, improve the reliability of the power grid and encourage microgeneration or distributed generation that will help in offsetting distribution costs to come down for many remotely locations businesses and consumers.

The new technologies that are not covered in existing legislation, like electric vehicle charging and residential solar power generation, smart grids can also get their way into the system.

Selling electricity back to the grid: How does it work?

One of the major benefits of this arrangement is it will help customers to offset their usage and pay less on their utility bills since they’re producing their own energy. This can be done while maintaining a secure connection to the grid for those times when they need to purchase electricity.

The bill will allow the safe interconnection of customer-owned generating resources to utility-owned networks. Typically, a bi-directional meter is installed to measure the additional electricity a customer requires from the electricity grid and any excess generation that may be supplied back to the grid. This helps in proper monitoring of electricity flow and billing to the customer.

The deregulated energy market in Alberta allows you to shop and choose the energy product that suits your requirements. Visit  www.energyrates.ca, a free website in Canada, for an unbiased cost comparison tool that can help you find the best energy rates in your area. Residential, small business, small commercial, large commercial and industrial electricity and natural gas consumers can all use EnergyRates.ca. It’s easy – all you need to do is fill in the form above to get started.

References:

• https://www.alberta.ca/modernizing-albertas-electricity-system.aspx
• https://docs.assembly.ab.ca/LADDAR_files/docs/bills/bill/legislature_30/session_2/20200225_bill-086.pdf
• https://www.mondaq.com/canada/utilities/1137876/bill-86-integration-of-energy-storage-and-unlimited-self-supply-of-electricity-in-alberta
• https://www.cbc.ca/news/canada/edmonton/bill-would-allow-companies-to-self-supply-unlimited-power-sell-excess-to-alberta-power-grid-1.6252651
• https://www.stalberttoday.ca/local-news/new-legislation-could-see-changes-to-albertas-power-grid-4769312

Rising natural gas prices: Why are natural gas rates so high in Alberta?

Over the past few months, Albertans have been receiving extremely high natural gas bills. If we examine the historical natural gas prices between 2021 and 2022, we can see that the price has skyrocketed to as much as approximately $5.3/GJ in November 2021 (see the bottom of this post for tables comparing historical regulated natural gas rates for 2020-2022). Overall, the average natural gas rates have increased.

One major factor is extended cold snaps – constant freezing temperatures are a sure way to increase our consumption of natural gas. However, prolonged cold weather isn’t the only reason for increased natural gas prices. If you have questions such as ‘why are natural gas prices rising so fast?’ or ‘what’s going on with natural gas?’, we’ve got you covered.

Read on to learn more about what causes high natural gas rates in Alberta; the list below is not in a specific order.   

1. Higher Oil and Gas Demand

An increase in demand for Canadian natural gas exports has been one such factor behind the increases in natural gas. As the economic activity across the globe picks up, the need for natural gas also increases fast. Overall, the main driver of gas has been the European gas crisis. In particular, the war in Ukraine has played an additional role in increasing oil and natural gas demand. According to a Global News article, Russia is a critical supplier of natural gas in Europe and oil in global markets. Hence, an increased price of oil and natural gas.

As Russia reduces the volume of gas heading into Europe, the United States is exporting large volumes of LNG to Europe and consequently, Canada is exporting more gas down south to the US.

2. Extreme Winter Weather

Due to the deep freeze in late December and early January, heating was used more frequently and extensively in addition to increased electricity demand. During cold snaps, the average home uses 40% more natural gas and 8% more electricity for every 10°C drops below zero.

Alberta hit an all-time electricity usage record of 11,939 MW on January 3rd, 2022 due to a cold snap that lasted for about a month between December 2021-January 2022. The province also broke its summer record for electricity demand (11,414 MW on June 28, 2021) due to a heatwave in Western Canada.

Additionally, a colder and longer-than-expected winter in Eastern Canada and in the United States also resulted in above-average demand for natural gas, further increasing Alberta’s exports of natural gas.

While improved storage levels of natural gas storage can help with natural gas futures, they weren’t enough to put a ceiling on recent rises in natural gas pricing, according to a CBC news article.

3. Utility Payment Deferral

As a result of the pandemic, many Albertans couldn’t afford to pay their utility bills. As such, the province of Alberta put the Alberta Utility Bill Deferral into place between March 18 and June 18, 2020. Any remaining payments would then be added as a temporary rate rider to all customer utility bills. This charge appeared on residential electricity bills from November 1, 2021, and was set to last until March 1, 2022.

For natural gas, the rate rider was set at $0.78 per month, which was based on the average residential energy use of approximately 21 GJ.

4. Carbon Levy

A carbon levy is intended to put a price on carbon pollution – in Alberta, the Carbon Tax has been increasing over time. Every April, the tax adds $1.049/GJ to natural gas usage. While increased energy charges comprised 50 to 60% of the annual increase in default rate tariff (DRT) bills in each service area, the April 2021 increase in the carbon levy on natural gas also contributed to DRT bill increases, comprising around 20% of the increase, according to the Market Surveillance Administrator’s Quarterly Report for Q4 2021.

Below, you can see the increase in Alberta’s Carbon Tax over the years:

Year	Cost/GJ
January 1, 2020	$ 1.0499523/GJ
April 1, 2020	$1.5762711/GJ
April 1, 2021	$2.1025899/GJ
April 2, 2022	$2.6289087/GJ
2023	$3.42/GJ (estimate)

Albertans use significantly more natural gas in winter, so the effects of these carbon tax increases are usually felt some months later, during the colder seasons. This means Albertans will probably be able to clearly notice the April 2022 increase in winter 2023. Natural gas usage is much lower in summer, so people usually don’t feel the effects of the carbon levy right away.

In 2030, the federal government expects these costs to be at $8.94/GJ.

5. Wrong Bill Estimates

If for whatever reason wire service providers are unable to read your natural gas meters, they will estimate your consumption based on your historical usage in previous months. However, many consumers, especially those who consume large amounts of natural gas, have noted that their natural gas estimates are incorrect.

Here are a few steps consumers can take if they believe their natural gas estimates are off:

• Check your in-house numbers to what your meters are reading – make sure to take note of any new appliances as well as making sure your meters are accessible.
• Contact your utility provider about your concerns or file a complaint with Measurement Canada. However, note that if your meter is determined to be working, your utility provider may require you to pay a testing fee.
• Some providers such as EPCOR or Enmax Power allow for customers to provide meter readings online – you can see a list of providers that allow online reading here.

Will the natural gas price cap protect my natural gas bills from rising this winter?

In the 2022 Alberta provincial budget, it was announced that there would be natural gas consumer price protection for consumers using less than 2500 GJ annually that will come into play if gas companies charge rates above $6.50/GJ between October 2022 and March 2023. The natural gas consumer price consumption comes in the form of a rebate called The Energy Affordability Program.

However, it’s difficult to forecast if this price protection will activate over the course of the next year – based on 2021, natural gas market prices peaked at $4.87/GJ, while the highest regulated rate price (RRO) was $5.328/GJ.

A week later, the provincial government also announced an electricity rebate.

Natural Gas Averages in Alberta: Tables

Date (Month-Year)	Regulated Rate
January 2022	$3.645/GJ
February 2022	$5.05/GJ
March 2022	$4.939/GJ
April 2022	$4.594/GJ
May 2022	$7.039/GJ
June 2022	$8.699/GJ
July 2022	$9.094/GJ
August 2022	$6.679/GJ

Date (Month-Year)	Regulated Rate
January 2021	$2.623/GJ
February 2021	$2.93/GJ
March 2021	$4.088/GJ
April 2021	$2.78/GJ
May 2021	$3.24/GJ
June 2021	$3.291/GJ
July 2021	$3.965/GJ
August 2021	$3.891/GJ
September 2021	$3.38/GJ
October 2021	$4.025/GJ
November 2021	$5.354/GJ
December 2021	$4.792/GJ

Date (Month-Year)	Regulated Rate
January 2020	$2.267/GJ
February 2020	$2.222/GJ
March 2020	$1.573/GJ
April 2020	$2.286/GJ
May 2020	$2.272/GJ
June 2020	$3.152/GJ
July 2020	$1.241/GJ
August 2020	$1.755/GJ
September 2020	$2.589/GJ
October 2020	$2.256/GJ
November 2020	$3.141/GJ
December 2020	$2.765/GJ

Now that you’ve learned about the increasing natural gas rates in Alberta, you’re probably wondering how you can cut your utility costs. One of the easiest ways is to compare the providers in your area and their rates.

Our team at EnergyRates.ca can help both businesses (small, large and industrial) and residential consumers save on natural gas rates by comparing different plans and helping them find the utility provider with the lowest rates in their area.

To get started, just fill in the form at the top of this page with the required information.

For an explanation of why Alberta electricity bills are getting higher, check our electricity-focused guide.

A Closer Look at Alberta’s $300 Electricity Rebate and Fuel Tax Removal

Alberta’s electricity prices hit record heights in January, meanwhile across the country gas prices have hit unparalleled highs. Following the 2022 Provincial Budget, where the Alberta government offered a price protection mechanism for natural gas, the Province has announced additional help as Albertans struggle with their energy and gas bills.

The government plans to provide rebates for electricity bills for the first three months of 2022, as well as put the provincial taxes on gas and diesel on hold.

🚨#Alberta has announced a new plan to help lower electricity bills🚨

The plan includes a $150 rebate starting on April 1. If you didn't already know, 2022 has seen some of the highest electricity prices for Albertans in a decade.https://t.co/9XXIBFYZ5R#BreakingNews

— EnergyRates_CA (@EnergyRates_CA) March 7, 2022

Electricity rebates: Who gets some money back?

With Alberta’s electricity prices hitting unparalleled highs in January, the government is offering rebates to help Albertan families and businesses pay their bills.

The government will offer a $300 retroactive rebate on electricity bills over the past winter. The rebate, applied directly to the electricity bill, will provide partial reimbursement for electricity bills from January to March to anyone who consumed less than 250 megawatt-hours of electricity within the past calendar year. It is expected that over one million homes, farms, and small businesses will receive this rebate.

Eligible consumers will receive a $50 monthly rebate for each of the months mentioned above, and for three more additional months as mentioned in the update below.

UPDATE: On July 6th, 2022, the provincial government announced the electricity rebate program will be expanded and will go through the rest of 2022. Eligible Albertans will receive a monthly $50 bill credit for six consecutive months, for a total of $300, instead of the initially planned $150 amount.

The rebate will be listed on each bill as a line item titled “GOA Utility Commodity Rebate,” and $50 rebates will follow in August, September, October, November, and December for a total of $300. The exact timing will vary depending on the billing cycle of each utility provider, but most energy consumers should see the electricity bill relief starting in July and stretching until the end of December.

The government is working with over 45 of the province’s energy retailers to coordinate this program.

On June 22, 2022, the Associate Minister of Natural Gas and Electricity, Dale Nally, announced consumers will begin seeing rebates on their power bills as of July 1st. Eligible households and businesses can expect to see an automatic $50 rebate on their bills. It is being applied directly to eligible utility bills, meaning no application or other action is needed to start receiving the rebate in July.

As published in the government’s official news release, the $50 rebates will apply to the entire bill, not just the energy portion. The program will cover both consumers on the variable regulated rate option as well as those with competitive retailers. This means that if you switch energy retailers and start a competitive contract, you’d still be eligible, as long as you’re under the consumption threshold mentioned above.

Consumers who believe they meet the eligibility criteria but have not received the rebates by the end of July should contact the Utilities Consumer Advocate.

Back in January 2022, electricity peaked its highest in nearly a decade at 16₵/kWh in Edmonton and Calgary.

This doesn't include fees built in to your bills either.#YEG #YYC #EnergySTAT pic.twitter.com/aDo40ePj0K

— EnergyRates_CA (@EnergyRates_CA) March 10, 2022

Removal of Fuel taxes

Starting April 1st, the government will temporarily stop collecting the provincial fuel tax.

Currently, gasoline and diesel are taxed at 13 cents per litre, while marked gasoline and marked diesel are taxed at 4 cents per litre. GST collected on the provincial fuel tax will also be paused, which works out to an additional 0.65 cents per litre savings.

The removal of the provincial fuel tax is not the only change slated for gas prices, as the federal carbon tax is rising to over 11 cents per litre from just under nine cents. Alberta’s premier Jason Kenney commented “while the federal government is set to increase the carbon tax April 1, Alberta’s government is taking the opposite approach and stepping up to offer relief.” While Canadians receive rebates from the federal carbon tax, there is valid concern regarding a further increase in fuel prices.

This is a developing story. As new details are announced, we will update this article to keep you up to date.