Higher Natural Gas Prices Will Inevitably Increase Alberta Power Costs

In the ever-shifting landscape of Alberta’s energy market, one number is currently catching the eyes of industry insiders and savvy consumers alike: 11 ¢/kWh.

According to the NGX (Natural Gas Exchange) forward pricing, the financial "crystal ball" that experts use to determine future prices, wholesale electricity prices in Alberta are projected to hover around the 11 ¢/kWh mark as we approach 2029. Retail rates, the price that consumers pay, will be closer to 13 ¢/kWh. That represents a 30% price jump in the next 3 to 4 years.

Alberta's NGX (Natural Gas Exchange, now part of *ICE
) is a major North American electronic platform for trading natural gas, electricity, and environmental products. Headquartered in Calgary, it establishes crucial price benchmarks like the AB-NIT hub prices used for setting rates and royalties in Alberta. It operates as a vital clearinghouse and price discovery mechanism for energy markets.

For the average consumer, this might just seem like another statistic. But behind that number lies a complex story of global gas demand, changing societal values, and a province-wide effort to keep the lights on without breaking the bank.

As we look at the next ten years (2024–2034), here’s what you can expect for your power bill, the "why" behind the numbers, and how local players like Big Rock Power are fighting to keep energy affordable.

The Foundation: Why Natural Gas Rules Alberta’s Grid

To understand electricity pricing in Alberta, you must first understand natural gas. Currently, over 70% of Alberta’s electricity is generated by burning natural gas. In simple terms: when gas prices go up, power prices usually follow in lockstep.

For the last couple of years, Albertans have enjoyed relatively low natural gas prices due to a "supply glut." We simply had more gas than we could move.

However, the game is changing. With the completion of major pipelines and the opening of Liquified Natural Gas (LNG) export terminals on the West Coast, Alberta’s gas is no longer trapped in North America. It can now be shipped to Asia and Europe, where it sells for a much higher price.

The 10-Year Outlook

The Rebound

Experts from the Alberta Energy Regulator (AER) predict that natural gas prices (AECO-C) will rebound from recent lows of under $2.00/GJ to over $4.00/GJ by 2034.

Global Demand

As the world seeks to move away from coal, "cleaner" natural gas is in high demand as a transition fuel. This global competition means the "bargain bin" days of Alberta gas are likely behind us.

The Electricity Link

If natural gas prices double over the next decade, the "fuel cost" for our power plants rises too. This is a primary reason why that 11¢ forward price for 2029 exists.

Societal Factors: The Push for "Net Zero"

It’s not just about the fuel; it’s about the "how." Society is pushing for a cleaner grid. Canada has set ambitious targets to reach a net-zero electricity system by 2035. This means a massive shift toward wind, solar, and battery storage.

While renewable energy is getting cheaper to build, the transition itself is expensive. We are currently "building the plane while flying it." We need to maintain reliable gas-fired plants for those cold, dark January nights (when solar and wind aren't producing much) while simultaneously investing billions in new green tech. This "double-up" of infrastructure adds a "reliability premium" to our bills.

Wholesale vs. Retail: What You Actually Pay

It is important to distinguish between wholesale and retail prices.

• Wholesale (The "Pool Price"): This is what big power plants get paid every hour. It is volatile and can swing from 0 cents to $1.00/kWh in a single day.

• Retail (Your Bill): This is what you pay. It includes the energy price, plus "delivery charges," "administrative fees," and "carbon taxes."

  
  

If the wholesale market is trending toward 11 ¢/kWh by 2029, consumers can expect to see retail prices that will be closer to 13 ¢/kWh. That is a 30% increase in the next 3 or 4 years from where we are now. Certainly not the 2% annual inflation governments aim for.

Predictions from the Experts

The Alberta Electric System Operator (AESO) and other market monitors suggest that the next decade will be defined by "Flexibility."

1. More "Zero-Dollar" Hours: Because we have so much solar power now, there are many hours in the afternoon where power is essentially free.

2. Higher "Peak" Prices: Conversely, when the sun goes down and the wind stops, prices can spike to the maximum cap.

3. Increased Demand: Between new data centers, electric vehicles (EVs), and a growing population, Alberta is expected to need 26% more power by 2043 than it does today.

   
   

The Big Rock Power Difference: Keeping it Affordable

In a market that feels like a roller coaster, Big Rock Power serves as the safety harness. As a local Alberta retailer, Big Rock’s mission is built on the belief that energy is a necessity, not a luxury.

In our recent article, "How Does Alberta's Electricity Grid Work?", we explained that the Alberta market is "deregulated." This means you have the power to choose who sells you energy. Big Rock uses this to your advantage by:

• Hedging the Risk: Big Rock buys power in advance to offer stable, fixed-rate plans. While WHOLESALE market pricing is predicted to be 11 ¢/kWh in the future, Big Rock currently offers promotional rates and long-term stability that can shield you from those spikes.

• The Solar Club: For those looking to beat the system entirely, the Big Rock Solar Club allows Micro-Generators to sell their excess solar power back to the grid at premium rates, helping them pay off their systems faster and lower their overall carbon footprint.

• Transparency: Unlike the "big guys" who often have hidden fees, Big Rock focuses on "Rock Solid Savings." By keeping administrative costs low and focusing on local service, they ensure that more of your money stays in your pocket.

  
  

Conclusion

If you are reading this on Larry Peters’ Substack or the Big Rock blog, the message is clear: Knowledge is Power. The next ten years will bring higher global demand for our gas and a massive overhaul of our power grid. While the "11 ¢" wholesale prediction sounds daunting, it is a reminder that the days of "setting it and forgetting it" with your utility provider are over.

To stay ahead of the curve:

1. Watch the Trends: Keep an eye on natural gas exports; they are the new engine of our economy but also the driver of our costs.

2. Consider Fixed Rates: If the experts are predicting a steady rise in costs through 2029, locking in a lower rate today is a solid hedge against future price shocks.

3. Support Local: Choose a retailer like Big Rock Power that understands the Alberta market and works to keep prices fair for neighbors, not just shareholders.

   
   

The grid is changing, but with the right partner and a clear understanding of the market, Albertans can ensure their energy future remains bright and affordable.

For more insights into how you can save on your next bill, visit our blog at *Big Rock Power Blog or contact our local team to discuss which rate is right for your home