Gas rates - locking in?

[Bullseye]

Anyone here locked in, or thinking about locking in their gas rate? The spread between the variable rate and the fixed rate plans has become smaller, it looks like, thinking about going the latter route.

I realize it's a gamble no matter what, just looking for opinions or insights.

[Bullseye]

Something I'm not clear on with the fixed rate marketers...they all say it can take a few months to get signed up with them properly, does this mean my rate would be the one I signed up with now, or the rate as the time it switches over?

Right now it looks like the spread is about 7 cents, if you factor in the transportation cost difference.

[Justin C]

You will get the rate that you signed up for.

Have you been looking at www.energyshop.com ?

[Bullseye]

You will get the rate that you signed up for.

Have you been looking at www.energyshop.com ?

I have, yes. I've been reading through everything on the site.

[sunnybono]

I too am a bit iffy as to when I should sign up. Just go my enbridge bill yesterday and the market rate was approx $0.27/cubic meter. Cheapest fixed rate is $0.37 on energyshop.ca.

I realize that less gas is used during the summer months, thus the difference in price, but do you guys think its worth signing up????

sk :)

(p.s. pls excuse me if u think I hijacked the original thread)

[TheDude79]

picking a fixed rate gas contract is just like trying to time the market, IMO.

Some people will get it right and save money, but many more won't get it right and they'll lose money. That said, I wouldn't lock into a rate looking to beat the market price. If you're looking to create certainty that your monthly bills will be stable and are willing to accept the added cost, then go for it.

[Whitedart]

Just go my enbridge bill yesterday and the market rate was approx $0.27/cubic meter. Cheapest fixed rate is $0.37 on energyshop.ca.


Just as mortgage rates have gone up, gas may or not go back up. If you need the stability of a locked, fixed gas rate like a mortgage, then it may be a good idea to lock into a contract for natural gas.

At 10 cents a unit less for Consumers Gas at present, I will be sticking with them for the time being. It rates are heading up, I always have the option of a contract, but am also prepared to ride this out a little. Gas rates increased a lot as oil prices have risen, but they have also come back down through the spring, although the contract prices haven't.

[monomono]

I used to think it would be like interest rates and in the long term variable would be better, but looking at the steady climb in gas rates over the last few years I just locked in at 39c.

[coolspot]

Remember - there is no free lunch - Fixed Rate Marketers are banking on the fact gas will not rise as fast as their fixed rate. Hence gas is more expensive the first couple years to offset any discounts in subsequent years.

So generally speaking, fixed rates are not that beneficial - unless gas prices increase substantially. In the end, the total amount you've paid is probably similar to without a contract - but now you've paid in advance...

The money you "saved" could have been invested instead ;)

[maniacshopper]

fixed rate is BS. It sounds like a good idea.

According to economics, let the market work itself out, it will correct itself.

You think crude will stay this high forever? Sure all those reports, we'll run out of oil in 30 years., 20, etc.

That's what they do to prop up prices.

Remember buy on rumor, sell on news.

[fireguy9]

I locked in with www.riterate.ca and they were the best rate going

[monomono]

fixed rate is BS. It sounds like a good idea.

Tell that to my neighbours who locked into a 5yr fixed rate of like 20c or something a few years ago... they will be saving big.

[Wiseman]

Tell that to my neighbours who locked into a 5yr fixed rate of like 20c or something a few years ago... they will be saving big.

Where do you live? I've been keeping an eye on the lock in rates for the past 3 1/2 years.. it's never been lower than 29 cents.

[monomono]

In the GTA... sorry I can't remember the exact rate they had, it was twenty-something.

[rina80]

I locked in at 26 cents 5 years ago, and considering this winter variable gas prices were at 43 cents, I factored in my bills, and on average I believe the quout on energy shop that the average customer who locked in 2000 did save 800$ by doing so.
As for gas prices not staying high, really what in life has every come down and stayed down in prices?
Natural gas, hydro, gasoline, everything just keeps going up, sure it may temporarily come down (i.e. gas in the summer time) but when my contract ends in the next month I'll definitely be locking in again.
As for the claim that it takes 3 months, yes it does take 3 months for the gas contract to kick in, and for those 3 months, you'll still be paying the variable rate. The rate you lock in at (currently 38 or so) will take effect in 3 months, so if you sign now, then end of october, just the right time for when heating will be needed again, and the variable rate will start to rise.

[slim_shady]

One thing to keep in mind is that if you do not sign a fixed price contract, you are paying cost-price for your natural gas. There is no profit for your utility built into those prices, they make money in the administration/delivery charges (which don't get cheaper when you sign a contract).

Gas supply costs the same for every company, even the ones that offer fixed-price contracts. Therefore, they need to constantly have people paying above the market rate for them to be profitable.

Think about it, if everyone saved money by signing the fixed price contracts, they would go out of business as they would be selling all their gas below cost.

It is a gamble for both the consumer and the company, there is no guaranteed savings.

[Skipper]

Are the benefits still the same if you factor in costs like... transport to gas company and storage costs? like.. the gas itself may be cheaper, but they always tack on sooo much. just like rogers!

[thezone]

Are the benefits still the same if you factor in costs like... transport to gas company and storage costs? like.. the gas itself may be cheaper, but they always tack on sooo much. just like rogers!

There isn't too much to tack on as everything other than the gas is paid to the person you sign on with and transport fees etc are still paid to enbridge (i'm pretty sure)

[Gee]

really what in life has every come down and stayed down in prices?


Computers and Electronics

[gedwards]

Think about it, if everyone saved money by signing the fixed price contracts, they would go out of business as they would be selling all their gas below cost. It is a gamble for both the consumer and the company, there is no guaranteed savings

That is not true . The fact is over the last 5 years or so gas prices have steadily increased (quite significantly). IF that were true they would already be out of business.

The fact is gas resalers do not gamble. You are assuming that they lock in a fixed rate with their consumers and then they keep buying their customers gas each month at the market rates and then sell it below cost (if prices have increased). The reality is gas resalers make extensive use of options and futures that allows them to secure future supplies of gas locking in current prices. Long term contracts are then set higher than these futures/option rates. This gives them quite a bit of certainty regarding future gas prices. As the futures prices begin to rise they simply increase their rates to compensate.

[Wiseman]

Originally Posted by rina80
really what in life has every come down and stayed down in prices?




Computers and Electronics

And all the stuff you see at the dollar store.

[slim_shady]

That is not true . The fact is over the last 5 years or so gas prices have steadily increased (quite significantly). IF that were true they would already be out of business.

Fixed price contracts have also steadily increased over the last 5 years as well, likely at the same % increase as the utility prices.

Yes, forward contracts are used to relieve some of the risk, but they can't buy 5-year forward contracts to lock in their cost at the rate customers of today are signing up at. The fact remains they need a certain percentage of customers paying above current market rates for them to stay in business.

[Elektronauts]

Our contract just expired with Direct Energy last month (28.5c for the past 5 years) now I'm being charged 49.9c WTF!! I too am looking into getting a contract from another reseller.

[gman]

Our contract just expired with Direct Energy last month (28.5c for the past 5 years) now I'm being charged 49.9c WTF!! I too am looking into getting a contract from another reseller.

Holy crap! How did you get 28.5c 5 years ago? I am not saying the price was low. I am saying the price is damn high. My contract from Direct Energy will expiry in this October and it 23.5 cents for the past 5 years.