Blog | February 11, 2012

By Catherine GriwkowskyIf you're looking to save money, don't go with a fixed-rate contract.Andrew Leach, University of Alberta energy expert, said fixed rates will not be cheaper."They're not offering you a discounted electricity price, they're offering you a fixed electricity price," Leach said.He compared fixed-rate contracts to insurance policies or fixed-rate mortgages."You're going to pay someone a fee to take on the risk for you," he said."Like any insurance policy you're going to pay something for that. If you sign a fixed-price contract you should expect to pay over the course of a year. You're actually going to pay more for your power than a fluctuating system, but you're going to have that certainty."That certainty is tempting for people on a fixed income.John MacDonald, executive director of Seniors United Now, said he left his fixed-rate contract when he felt he was getting hosed."I'm sort of free-floating with whatever the price goes to," he said.MacDonald is concerned with steep rises in prices, which have gone up several-fold in the past year."A lot of our seniors are really feeling the crunch right now, those that don't have themselves locked into one of those plans," he said."There's a few people that have themselves locked into a plan that gives you eight cents a kilowatt hour for electricity, which is a lot lower than where mine is right now."Leach said people often look to fixed-rate contracts when rates are high, which is like shopping for car insurance right after a car accident.That fluctuation drives people to fixed-rate contracts, said Public Interest Alberta executive director Bill Moore Kilgannon."They're not doing it out of the goodness of their heart, they're going to make some good profit at it," he said.A comparison of fixed electricity rates and regulated-rate options are available on the Utilities Consumer Advocate website at Catherine Griwkowsky

This article was published in the Edmonton Sun on February 11, 2012. Read the full article on the Edmonton Sun website.