Albertans who are not on a natural gas contract likely received an unwelcome surprise when they opened last month’s natural gas bill.

An unseasonably cold start to spring has many wondering if the high prices are here to stay.

According to the province's utilities consumer advocate office, the long, cold North American winter caused a price spike, boosted by the weather’s slowing of onshore production and an increase in consumer demand.

Calgarian Aziz Ahsan keeps a close eye on the price of natural gas, both the market price and on his monthly Direct Energy bill. Ahsan was alarmed to see his rate shot up to $9.38 per gigajoule in March from $4.49 in February.

“It gave me a shock actually,” said Ahsan. “Why should it double?”

The $9.38 per gigajoule seems frighteningly high to most Calgarians as, over the last 12 months, the average cost is nearly a third of that price.

Is it time to sign a contract?

While the kneejerk reaction of many is to lock in to a contract to prevent future jumps, officials say the March spike was a rarity and, in April, the default rate will drop back down to $4.23 per gigajoule.

Comparing these numbers to Direct Energy's three year natural gas contract is extremely difficult.

On a contract, the consumer pays the average price natural gas traded at that month, known as the AECO C rate, plus an additional $2.00 per gigajoule except. There is an exception between the months of November and March where the rate is capped at $5.99.

Consumer Watch specialist Lea Williams-Doherty spoke with Rob Spragins of the Utility Consumer Advocate Office to discuss the confusion surrounding contracts and the lack of information about contract calculations and AECO C rates.

“It occurred to me one of the things we need to do is to make sure we've put necessary links on our website so, if consumers want to find out exactly what the AECO C price is, there's an easy way to do that,” explains Spragins.

The AECO C average for April is $4.47.

Lea Williams-Doherty crunched the numbers for Direct Energy’s three year contract and the results were inconclusive over the last two months:

April

  • A consumer would pay $6.47 per gigajoule ($4.47 AECO C rate plus the additional $2.00 per gigagoule)
  • When compared to April’s market price of $4.23 per gigajoule, the consumer pays $2.24 too much per gigajoule which amounts to nearly $25 per month for the average home.

March

  • The capped, contract rate of $5.99 per gigajoule which would have saved a consumer $3.39 per gigajoule (approximately $37 for the average home)

Under the ENMAX and Just Energy 5-year contracts, you pay a flat rate of $5.99 per month which shields you from the $9 winter spikes but denies you the $2 summer dips. When you compare that to last year's market average those without contracts paid $3.80 a gigajoule.

If you use that to extrapolate into next year, which many forecasters say you should, these natural gas contracts are losers.

To see the current AECO C rate, visit Utility Consumer Advocate Helps.

With files from CTV's Lea Williams-Doherty