Energy Prices Going Up?

Ontario stares down a 40% increase in Natural Gas and 33% increase in electricity rates; are higher prices here to stay?

Enbridge ran out of inventory this past ‘unexpectedly cold & long winter’ and in a pinch, was forced to buy more natural gas at a significantly higher price. To make up for their profit shortfall, Enbridge will pass it along to customers with a ‘temporary’ 40% increase in gas prices. The consensus is that historic natural gas prices really couldn’t go any lower than they were over the past couple of years, so an increase could only be expected.

Historical electricity prices have generally been lower for the Ontario home owner than they have been for Americans, but those days may be numbered. For different reason, electricity prices are also going up in this province to the tune of 33%, and that’s not a good thing for long-term employment in Ontario’s manufacturing sector.

The real question is: how vulnerable are we to higher utility prices? The NEB’s crystal ball is hazy as they can’t seem to forecast much beyond a year – which isn’t much of a forecast really. Hydraulic fracturing is a very intensive process that briefly yields natural gas inexpensively, but new sources have to be taped to keep up with demand making long-term forecasts on natural gas prices difficult.

Will climate change bring about more climate ‘surprises’ as time goes on? As Ontario builds natural gas peaker plants to generate electricity, will the competition for more natural gas produce higher prices? Will a spike in natural gas magnify electricity prices?

Either way, the best way to isolate yourself from the volatility is to use as little of it as possible and we believe we can help any homeowner live comfortably with significantly less!