How can you get the best deal on power in Calgary? We crunch the numbers

Calgary's utility market is still dominated by Enmax but dozens of smaller companies are scrambling for a chunk of the pie.

Will they save you money? They could. Depends on your bill.

With inflation driving up costs across the board, many Calgary residents are looking for a deal. And they tell us energy contracts are like a "black box" — confusing, especially when you're wary of a scam. 

"You're trying to find an answer and there is not really any documentation," said Ariel Espinosa, a homeowner, management consultant and one of 850 residents who have been texting with us about utility bills.

High prices last winter drove him to call Enmax for answers.

He was tempted by the Direct Energy salesman. The rate was lower, but what about admin fees?

The information just wasn't clear. 

So we gathered questions from our text messaging community, then dove into company websites, interviewed key players and built up the spreadsheets.

Here's what we found.

The big 3: Watch out for high admin fees

First thing to know: Alberta's energy system is only partly free-market. The only choice you have is for the energy retailer. That means each company has to charge the same transmission, distribution and other set fees. It's the administration/retail fee and the cost of the power or gas that change.

Let's start by looking at the three largest companies by market share.

The giant is Enmax, the one that used to be a department of the City of Calgary and still pays a dividend to the city. 

Enmax is the default option for anyone who has not signed another contract. In Calgary last year, 27 per cent of households were still on the default option, and an additional 57 per cent have joined EasyMax by Enmax, where they choose between fixed and floating rates.

ATCO and Direct Energy are next.

ATCO has five per cent of the market, and it's rates are nearly identical to EasyMax. No real savings or extra cost there.

Direct Energy has 6.5 per cent of the market and offers a $25-per-year cashback option plus a free Google Nest Hub on a five-year electricity contract. 

But here's where the fees could get you. You're losing $5 a month by forking out extra on their administration fee. So with cashback, you'll end up paying $3.80 a month more in the end.

Is it cheaper? Depends how much you want that Google Nest Hub.

Cost savings for a large house

So where can you save money? Depends on the size of your house.

A quick search at UCAhelps.alberta.ca (the website of the provincial advocate) first brings up nearly a dozen companies that all run their billing and customer service through the same Calgary-based company: Sponsor Energy. That includes franchise companies such as Energy for Less, Burst Energy and Regional Energy.

UCAHelps lists them as having the best rate. But again, watch for those higher admin fees.

That's why this is only a cheaper deal for a bigger house.

For example, look at Sponsor Energy (which runs other companies' billing systems and sells energy itself). Its fixed rate per kWh is 7.94 cents and it charges a per day retail fee of 50¢. It's a lower rate than EasyMax but higher admin fee.

So a small duplex using 500 kWh a month would end up paying $5 a month more with these companies than if they signed with EasyMax.

The two deals break even at 1,000 kWh a month. And a big five-bedroom ranch house or a place with a hot tub using 2,000 kWh a month would save $5 a month.

But each of these companies aren't just trying to sell cheap energy. Sponsor Energy, for example, creates partnerships with local charities to sell its power.

Dan Brownsberger, the company's community development manager, says it gives $50 to the charity of your choice for any new sign-up, which is roughly half of what the company earns per customer each year.

"Our model was based on the charities spreading the word," said Brownsberger. "Electricity, natural gas — it's a grudge purchase. But at least (customers) can feel good that, you know, their choice made a difference to their favourite charity."

Saving on energy for a small house 

So what about a small house? In this case, one way to lower your bill is put up a deposit, called a "prudential" in the utility world. 

There is a second group of 26 small companies that all operate with this model, supported by the Calgary-based company Utility Network. Companies such as Get Energy, Abode Power or the non-profit EmCo all require a $100 to $200 deposit to reduce the risk of default. 

The savings are still small. With Abode Power, for example, that little duplex could save $4 a month over EasyMax on the fixed rate (7.91 cents per kWh and $6.31/month admin fee). But it can add up. A house using 1,000 kWh a month would save $100 a year with those rates.

"It's just a way to secure those lower rates," said Darren Chu, program development manager for Utility Network and son of the founder. 

"We as the licensed retailer have to post prudential. Our energy marketers post prudential with us. So we allow customers to post their prudential, and we pay them five per cent interest on it. It's a way to both secure our prudential and as a way to give a little bit back to the customer. You know, it's probably hard to find a five per cent interest rate anywhere out there right now."

That interest gets credited annually to a customers' account.

Many of these 26 companies also try to stand out in the market by giving to different charities, between 10 and 100 per cent of the profits. Or they have specific rates targeted to homes with solar power, and sell the idea of personal, local service. The family-owned company has just 25 employees, including the call centre in Calgary.

But do I really want to lock in?

Most of the contracts now have no penalty for an early exit. So it's not really locking in, and you can switch between the floating and fixed rate when you need to. But because of the shift to a market-based electrical system, analysts predict the fixed rate will be cheaper than a floating rate for at least another year. 

There are options with variable rates, too, but they're not as easy to compare. Many small companies try to compete with the big players by offering a wholesale rate plus a transaction fee.

But those rates aren't published online. Chu asked his analyst to pull the data per month for the last five years. He shared that spreadsheet with us, which suggests 60 per cent of the time, the Utility Network variable offer was better than the regulated option set by the Alberta Utilities Commission for Enmax. 

But we don't have data to see how the variable rates offered by EasyMax or ATCO compare.

Are there good options for natural gas?

We found fewer options for natural gas. EasyMax and ATCO have flexible fixed-rate options. 

The Sponsor Energy group of companies offer fixed rates, but they have a $250 fee to cancel the contract early. Their website says that's because they are bulk buying the gas upfront for customers. 

Utility Network companies don't offer the fixed prices anymore. They just couldn't compete in this market, said Chu. 

"We have to hedge and supply our own energy. And right now, it's very expensive to secure any kind of volume-sized hedge in order to retail those on fixed rates."

Good luck and a caution 

The best resource we found was the cost comparison tool at UCAhelps.alberta.ca. But the rates cited were often slightly off the rates posted on each company website. It gives a place to start if you're willing to keep digging.

Also, these rates are always changing. So don't just rely on this analysis. Check the rates yourself, and see if you like and trust the company.

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