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Fixed vs Floating Energy Rates

Understanding Your Energy Options

Depending on where you live in Alberta, you’re likely to have two options when buying electricity and natural gas. You can choose to default to the regulated rate (e.g. market-based monthly rate) or you can choose a fixed or floating rate plan. While not all energy needs are equal, our deregulated energy market in Alberta provides energy consumers with a unique opportunity to take advantage of both regulated and competitive rate plans depending on how the energy market is performing.

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Since regulated and floating rates can fluctuate up and down on a monthly basis, customers who choose to forgo securing their rate with a contract, could run the risk of paying more for their energy usage in the long run (especially during the winter months).

We have multiple options to help you find the right energy plan for your home. Is it better to have fixed or floating rate? While a market-based rate can save you money when the market rate is low, a fixed-rate plan provides more price stability and could be a better choice for you - and your wallet. Here’s a comparison chart of available energy rate plans to help you choose the right fit for your needs:

Direct Energy Fixed Rate Direct Energy Floating Rate Regulated Rate

Energy Rate

  • Set rate throughout term length
  • Based on monthly market prices + a set add-on charge
  • Flex-through pricing for natural gas (Market +2.00 $/GJ) and electricity (Market +1.50¢/kWh)

Exit Fees

No Exit Fees

No Exit Fees

No Exit Fees

Benefits

  • Fixed price stability
  • Flexible term options (1 – 5 years) with no exit fees
  • Predictable bill to help you forecast your monthly costs.
  • Get special incentives just for signing up like our Cashback Plus Rewards where you can earn up to $250 cash back.
  • Contribute to renewable sources and add a percentage of green energy to your electricity plan or energy bundle
  • Get one bill when you bundle electricity and natural gas; bundled services are not available with the regulated retailers
  • Take advantage of seasonal lows in the market price.
  • Rate cap protection in the winter - never pay more than $5.99/GJ for natural gas during the coldest months (November to March)
  • You don’t need to sign a contract.
  • Rate is reviewed and approved by the Alberta Utilities Commission to ensure it is reasonable and fair.
  • When market conditions are favourable, the regulated rate can be lower than the fixed rate plans available.
  • Regulated electricity and natural gas can be turned on as soon as you need it.

*Customers are free to purchase natural gas services or electricity services from a retailer of their choice. For a list of retailers, visit ucahelps.alberta.ca or call 310-4822 (toll free in Alberta).

Benefits of Fixed Rates


Electricity rates have been at an all-time high over the last year.Learn more about what affects electricity market pricing.

The good news is that you have the power to choose the energy option that works best for you and your home. If price stability, multiple term options, and special promotions are appealing to you, then a fixed-rate electricity or natural gas plan might be a better energy option for you! With a fixed rate, you are charged the same amount of money for each kilowatt-hour (kWh) of electricity or unit of natural gas gigajoules (GJ) you use.

Energy consumption typically varies based on the season, but if you usually use a predictable amount of energy each month, a fixed-rate plan can make it very easy to budget. For example, if you secure a fixed rate for five years, you’re likely to pay nearly the same amount five years from now. In some instances, the rate you lock in may be a little bit higher than the current floating rate, but this option could protect you from unexpected events that could affect the market rate over time.