Why does it make sense to lock down prices now?

There are a number of reasons to lock into a fixed price at this time:

  • Electricity prices have declined due to a reduction in demand as a result of the recession. The economy is recovering and demand is increasing. With the closing of the coal plants in Ontario this increased demand will be supplied with green power like wind and solar which are better for our environment but are much more expensive than coal.
  • Natural gas prices are at the lowest price in almost a decade. With normal winters over the next few years, consumption will increase and prices will recover. This presents an opportunity to lock in at these low prices before those price increases develop.

 

How do energy retailers offer consumers a better deal by locking in lower rates – how does it work?

Energy Marketers are able to purchase electricity and natural gas in large volumes at wholesale rates for terms of up to five years. The marketer is able to sell a five year contract to customers at a fixed price so the customer will not see an increase in their commodity supply for the full term of the contract. This provides price protection to the customer if commodity prices increase. If the customer purchases their electricity through their utility, they will be charged a price that is approved by the Ontario Energy Board which is a forecast of prices for the next 6 months. Gas prices are very volatile and the Ontario Energy Board approved price may change every 3 months.

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What should consumers consider when purchasing energy?

There are a number of considerations:

  • Look at the commodity price for natural gas or electricity
  • Consider options such as time of use pricing for electricity, if offered
  • Ensure you are comfortable with the length of term of the agreement
  • Look for potential environmental benefits such as green power and carbon credits
  • Know your rights for cancellation
  • Take time to read the details of the agreement (you have to verify your agreement over the phone 10 -60 days after you sign in order to be enrolled in the program you choose)
  • Ensure you have the authority to enter into such an agreement (only account holders and their spouses can sign up for energy agreements)
  • Make sure you have the contact information for the marketer that you have chosen

 

What happens if a customer moves?

If a customer moves they can take the contract with them to their new location.

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