Electricity and natural gas (energy) Contracts
- An energy contract is a legal agreement between you and a licensed energy retailer. It states the price you will pay for energy and the terms and conditions of your energy purchase.
- A licensed energy retailer is an independent electricity and/or natural gas marketing company whose prices are not regulated by a provincial or municipal government, a Rural Electrification Association (REA) or another agency.
- These companies are licensed by the Government of Alberta, but are not affiliated with government. Any special rewards or offers made by the retailer to encourage you to sign a contract are not part of any government program.
- It can take 30 to 90 days for competitive service to begin or to switch energy services from one retailer to another. If you are a new utility customer (new to Alberta or moving into your first home) this means you will have to initially connect your electricity and natural gas services with the regulated providers before going on a competitive energy contract.
Why a contract may be better for you …
- Contracts can provide peace of mind by locking in a price. As with fixed rate mortgages, these contracts can provide you with stable energy prices over the length of the contract.
- Fixed price contracts may protect you against short-term price spikes resulting from natural events such as hurricanes and earthquakes.
- Retailers may offer customers incentives to sign contracts.
- Some retailers pass along administration cost savings if consumers sign a contract for both electricity and natural gas.
Why a contract may not be right for you …
- Depending on the terms of your contract, you could remain locked in at the contract price for the term of the contract even if the rates subsequently drop.
- Some retail offers include early exit fees if you terminate a contract before the end of the term. You should be aware of how the early exit fees are calculated as they can amount to several hundred dollars – depending on the remaining term on the contract.
- An energy contract is a legal commitment between you and the retailer and stays in force until the expiry of the contract. If you are at a stage in your life where – because of health or other reasons – it may be difficult for you to make long-term commitments, then the option to sign a contract should be weighed carefully. For example, if you move to a new location in the province where utilities are included in the rent, early exit fees may apply.
What changes if you sign an energy contract …
- You will pay an agreed contract price for the energy you use for the term of your contract. The price may be fixed, floating, or a mixture of both depending on the company and the agreed-to product.
- You will begin receiving your energy from the retailer generally within 90 days after you sign a contract. If you do not get a bill from your contract retailer within 90 days, phone your contract retailer to find out why.
- Your contract is not specific to your current location. It stays with you (with your name) as the individual signing the contract. Be careful to use the correct site I.D. for the location where you want service.
- Your energy retailer may charge an early exit fee if you cancel your energy contract before the expiry date.
- Your new energy retailer will provide customer service for the products and services you purchase and will help you with questions about your bills.
- You will receive your bill from your new energy retailer. It will include an energy charge calculated at the contract price.
- You will get a new account number. If you pay your bill by telephone or Internet you will need to update your banking information.
- If you are on a budget or equal payment plan, your budget plan will not be transferred to your new energy provider. You will receive a final bill from your current company requesting payment in full.
What stays the same when you sign an energy contract …
- Your bill will continue to include charges for energy, delivery, administration and taxes.
- You will continue to pay the delivery charges to a distribution company for delivering energy to your home or business. These charges are now collected by the new retailer. Delivery charges are regulated and are the same regardless of which energy retailer you choose or whether you remain on the regulated rate.
What happens when you cancel an energy contract …
- You can cancel your contract for any reason within 10 calendar days from the date you sign a contract. If you have entered into the contract at the doorstep or over the Internet, this 10-day period starts when you make the commitment to the retailer. To cancel an energy contract, you must send a notice to your energy retailer using the contact information listed on the contract or Product Sheet. Send your cancellation notice in a way that will allow you to prove you sent it. It is a good idea to ask the retailer to confirm that they have received your cancellation notice within the 10-day cancellation period.
- For customers who enter into an energy contract over the telephone – called “voice contracting” – you have until 60 days after receiving your first bill to cancel without penalty or early exit fees.
- If you have an existing contract and do not renew or enter into another contract when it expires, your energy service will return to your area's regulated rate provider. You must contact your regulated rate provider to indicate your decision to return to the regulated rate otherwise your home’s energy may get disconnected due to no billing information.
There is no penalty for leaving or returning to the regulated rate; however, some regulated energy providers may charge an administration fee to transfer your account back to the regulated rate.
For more information
- Contact your energy retailer with questions about your energy contract.
- Contact the Office of the Utilities Consumer Advocate at 1-866-714-4455 (toll free) for more information about your options for buying electricity or natural gas.
- Contact Service Alberta at 1-877-427-4088 (toll free in Alberta) or visit http://www.servicealberta.gov.ab.ca/ to find out if an energy retailer is licensed or if you feel you have been treated unfairly. It is against the regulations for a licensed energy retailer to use misleading statements or apply pressure tactics in the conduct of their business. Service Alberta will investigate all complaints and enforce actions – including fines and license revocation – against a retailer found to be in breach of the regulations.
