Your Energy Bill is About to Get a Major Jolt: What Alberta's New Energy Reality Means for You

Imagine opening your utility bill and seeing your natural gas costs double or even triple within the next year. Your electricity bill will jump too!

The average price for natural gas in 2024 was a modest $1.30/GJ, but could potentially more than double to $3.32/GJ by 2026, and even triple to $3.79/GJ by 2032. This isn't a distant forecast; it's the imminent reality as Canada's first major liquefied natural gas (LNG) export facility on the BC coast began operations on June 30, 2025.

This pivotal shift isn't just about higher utility bills for your home, farm, or small business; it's about a fundamental re-evaluation of Alberta's entire energy landscape. At Big Rock Power, we believe understanding these shifts is key to making informed decisions for your energy future.

The New Energy Equation: LNG and the Rise of Natural Gas Prices

For decades, Albertans have enjoyed a distinct advantage: relatively inexpensive natural gas.

Our province, is sitting atop the vast Western Canadian Sedimentary Basin (WCSB) and has been a prolific producer. Our landlocked geography meant our abundant supply primarily served the North American market, often at a significant discount compared to global energy prices. This era of historically cheap gas has underpinned everything from home heating to industrial operations, becoming a cornerstone of our provincial economy and a comfort to our wallets.

However, this long-standing dynamic is now undergoing a profound transformation. The catalyst? The LNG Canada facility in Kitimat, British Columbia. This monumental project, the largest single energy investment in Canadian history, officially commenced operations with its inaugural cargo shipment of ultra-chilled natural gas on June 30, 2025. This isn't just another pipeline; it's a direct, high-capacity conduit from our abundant WCSB reserves to the high-demand, high-priced energy markets of Asia.

Think of the implications: we've effectively opened a new, lucrative export valve for our natural gas. LNG Canada's initial phase alone is designed to export 14 million tonnes per annum (mtpa), with a potential Phase 2 expansion to 28 mtpa. This translates to a substantial new appetite for our gas, anticipated to boost current WCSB natural gas consumption by approximately 10%. This significant increase in demand will inevitably exert upward pressure on the Alberta benchmark AECO price, the very price that dictates your natural gas bill.

So, what does this mean for your natural gas bill in the coming months and years?

Forecasts from reputable sources paint a clear picture of rising costs!

Advisory firm Deloitte, for instance, projects the Alberta benchmark AECO price, which averaged a modest $1.30/Gj in 2024, to climb to an average of $2.08/Gj in the latter half of 2025. This upward trend is expected to accelerate, with Deloitte forecasting an average of $3.32/Gj in 2026, and potentially reaching $3.79/Gj by 2032.

The Alberta Energy Regulator (AER) echoes these projections, forecasting the AECO-C price to increase to Cdn$2.71/GJ in 2025 and reach Cdn$4.37/GJ by 2034 under its "Short-Term Uncertainty Scenario (Base Case)". Even under a "One-Year Tariff Scenario," the AER still forecasts the AECO-C price to increase to Cdn$1.56/GJ in 2025, reaching Cdn$4.09/GJ by 2034.

This isn't a temporary market fluctuation; it's a fundamental revaluation.

Experts predict that Canadian producers, despite increased drilling and capital spending, may not fully meet the demand from current and in-progress LNG projects for another four to seven years. This implies a sustained period of strong natural gas pricing for Alberta.

While this new global connection offers immense economic benefits for producers and the provincial treasury through increased export revenues and royalties, it undeniably shifts a portion of the cost burden onto domestic consumers. It's a classic economic trade-off, where the increased value of our resource on the global stage translates to higher costs at home.

Beyond just higher prices, we can also expect increased volatility!

TD Securities warns that given limited incremental storage additions, the market could experience higher gas price fluctuations, both upward and downward. This heightened volatility will require careful planning for households, farms, and small businesses alike, making budgeting for energy costs more challenging.

Alberta's Electricity Market: A Gas-Fired Reality Check

Now, let's turn our attention to electricity. Why does the price of natural gas matter so profoundly to your power bill?

Because in Alberta, natural gas is the undisputed king of electricity generation.

In 2023, a staggering 74% of our province's electricity was generated from natural gas. THis solidifies natural gas's central and dominant role in our power grid. The connection between natural gas prices and electricity prices in Alberta is not just strong; it's a direct, almost immediate correlation.

The Alberta Electric System Operator (AESO) annual market statistics consistently demonstrate this link.

For example, in 2024, average electricity pool prices (wholesale market) decreased significantly by 53% to $62.78/MWh, paralleling a 49% decline in gas prices to $1.30/GJ.

Conversely, in 2022, higher natural gas prices were identified as a key contributor to the average electricity pool price reaching its highest nominal level ever at $162.46/MWh, a 59% increase from 2021.

Alberta operates an "energy-only" electricity market, meaning generation is dispatched based on the cost of offers from suppliers, with the most expensive bid accepted setting the market price.

Given that natural gas generators constitute such a significant portion of our supply, and their primary operating cost is fuel, any increase in natural gas prices will directly influence the marginal price of electricity. This means that as natural gas becomes more expensive, so too will the cost of generating electricity, a cost that is ultimately passed on to you, the consumer.

The Utilities Consumer Advocate (UCA) provides a stark illustration of the cost disparity between natural gas and electricity. Based on their 12-month average from January to December 2024, the electricity Regulated Rate Option (RRO) commodity was more than 21 times more expensive than natural gas in Alberta.

To put this into relatable terms, while 10 GJ of natural gas might cost you around $19.40, the equivalent energy from electricity would cost a staggering $426.11. This highlights that any increase in the natural gas commodity price will have a magnified effect on overall energy costs if passed through to electricity rates, particularly for those who rely on the grid for heating or other high-consumption uses.

The impacts on electricity prices will generally follow the trajectory of natural gas price trends. Therefore, increases are expected to begin from the second half of 2025 and continue through 2026 and potentially beyond, mirroring the projected strength and duration of natural gas prices.

The duration of higher electricity prices will be directly tied to how long natural gas prices remain elevated due to the sustained demand from LNG exports, potentially lasting for four to seven years or through the 2030-2034 forecast period.

The Renewable Renaissance: A New Competitive Edge

So, amidst these rising energy costs, where's the silver lining for your home, farm, or small business?

Higher natural gas prices create a powerful and undeniable economic incentive for renewable energy. Unlike gas-fired power plants, which rely on a constantly priced fuel source, wind and solar facilities have no fuel costs once they are built. Their operating costs are minimal, making them increasingly competitive as fossil fuel prices rise. This fundamental shift in the economic landscape is poised to accelerate Alberta's already impressive renewable energy growth, driving a true renewable renaissance.

Alberta has quietly, yet rapidly, emerged as a renewable energy powerhouse in Canada.

In 2023, a remarkable 92% of Canada's total growth in renewable electricity generation came from our province. This isn't by accident; it's the result of a powerful confluence of factors:

• Abundant Resources: Southern Alberta boasts some of the highest solar power potential in North America, comparable to sunny Florida or Rio de Janeiro, with an average of 2,500 hours of sunlight per year. Our wind resources are equally impressive, consistently ranking among the strongest globally.

• Deregulated Market: Alberta's energy-only electricity market, while known for its volatility, has paradoxically fostered private sector innovation. It allows renewable projects to compete directly on price, attracting significant investment without the need for traditional government subsidies.

1. Declining Costs: Worldwide, the capital expenses for wind and solar technologies have significantly decreased over the last ten years. This trend makes them more competitively priced compared to traditional energy sources, even without factoring in fuel costs.

2. Carbon Pricing: Alberta's carbon price, which is set to increase annually and reach $170/t by 2030, adds a direct cost to the greenhouse gas emissions from natural gas-fired generation. This policy mechanism further enhances the economic appeal of zero-emission renewables, making them a more attractive investment.

3. ESG Drivers: There's a growing global movement towards environmental, social, and governance (ESG) commitments among corporations and institutions. This is driving significant demand for green energy, leading to numerous power purchase agreements (PPAs) between renewable developers in Alberta and major companies like Microsoft, Amazon, and Ikea.

We're already witnessing this translate into tangible, large-scale projects across the province.

• The Travers Solar Project in Vulcan County, for example, is one of North America's largest, capable of producing 465 MW of electricity, enough to power 150,000 Alberta homes.

• The 494 MW Buffalo Plains Wind Farm, Canada's largest onshore wind farm, began delivering power to the Alberta grid in 2024, capable of powering approximately 140,000 homes.

• RBC anticipates a remarkable 61 new solar projects coming online in Alberta by 2025 alone.

This rapid expansion means renewables contributed approximately 19% of total electricity generation in Alberta in 2024, up from 17% in 2023. This growth is not just impressive; it's crucial for reducing our reliance on natural gas for electricity generation in the years ahead, offering a pathway to more stable and potentially lower electricity costs in the long run.

Navigating the Road Ahead: Challenges and Opportunities

While the economic case for renewables is strengthening, the path forward isn't without its complexities for Alberta's energy consumers. Building a truly resilient and affordable clean energy grid requires addressing several key challenges and leveraging strategic opportunities.

Challenges for Renewables: The very nature of wind and solar power, their intermittency, presents a significant challenge for grid stability. This means that while renewables are vital for decarbonization, we need robust solutions like large-scale energy storage (such as the Big Rock Solar Battery Project, which filed a Need Overview with AESO in June 2025) and flexible natural gas-fired generation (potentially incorporating Carbon Capture and Storage (CCS) technology) to ensure a reliable power supply when the wind isn't blowing or the sun isn't shining. Integrating these new sources also requires significant and ongoing investment in transmission upgrades across the province.

The Role of Interties: Connecting our provincial grids through interties offers a powerful solution to manage intermittency and enhance reliability. These interprovincial links allow us to balance electricity supply and demand across jurisdictions, potentially lowering overall system costs by importing cheaper power when available from neighboring provinces like British Columbia, which has abundant hydro power.

The existing electricity intertie between Alberta and British Columbia has a rated capacity of 1,200 MW for imports into Alberta. However, its commercial import capacity into Alberta was unilaterally reduced by the AESO in March 2023 to a mere 250-350 MW, roughly a quarter of its rated capability. The good news is that the Alberta government has directed the AESO to file a needs identification document by December 31, 2026, with the explicit goal of restoring the intertie's import capacity to or near 950 MW.

Restoring this intertie is viewed as a straightforward solution to reduce barriers for interprovincial trade and is expected to foster competitive outcomes by enabling more imports of potentially cheaper power from BC, which could lower Alberta's pool price.

Regulatory Landscape: Policy and regulation also play a critical role in shaping Alberta's energy future. The rising carbon price, set to increase annually and reach $170/t by 2030, directly increases the operating costs for natural gas-fired generation.

This, in turn, makes renewables more economically attractive. Federal "Clean Electricity Regulations (CERs)" mandate a linear decline in greenhouse gas emission intensity to zero by 2035. While this policy is projected to significantly increase electricity prices in Alberta, with an estimated cost to consumers of $45 billion between 2022 and 2036, or an average increase of $30/MWh from previous forecasts, it also provides a strong impetus for accelerated renewable deployment.

The AESO is also undertaking a "Restructured Energy Market" (REM) design process. It was initiated in September 2024, to modernize Alberta's electricity market. Proposed changes within the REM include an increase in the energy price cap from $1,000/MWh to $3,000/MWh during periods of supply scarcity.

Furthermore, the government has previously intervened to buffer segments of the residential market by capping the price of the regulated rate for electricity with a loan, and there is an existing rebate mechanism if natural gas rates exceed $6.50/GJ. While these interventions offer some short-term relief, they may not be sufficient to fully offset the long-term upward pressure from a globally-linked natural gas market.

What This Means for Alberta's Energy Future and Your Choices

The operationalization of LNG Canada represents a profound and irreversible shift for Alberta's natural gas market. It is transitioning from a historically discounted, regionally-focused market to one that is increasingly integrated with higher-priced global markets. This integration will establish a "new normal" of elevated natural gas prices for Alberta residential, farm, and small business consumers.

Given the significant and undeniable reliance on natural gas for electricity generation in Alberta (75% in 2023), these higher natural gas prices will inevitably translate into increased electricity costs, affecting every household and business across the province. The timing of these price impacts is immediate, with the demand influence beginning in the latter half of 2025. A more pronounced jump in prices is widely expected in 2026. This elevated price environment is projected to persist for a considerable duration, potentially through 2030 and even beyond to 2034.

Alberta consumers are entering a new energy landscape characterized by higher and potentially more volatile energy costs due to the direct global market linkage provided by LNG Canada.

While this project is expected to bring substantial benefits to the provincial economy and producers through increased export revenues and royalties, it simultaneously shifts a portion of the cost burden onto domestic end-users. This inherent trade-off between provincial economic gain and consumer energy costs will be a defining feature of Alberta's energy market for the foreseeable future.

Mitigating factors, such as Alberta's impressive and accelerating growth in renewable energy capacity and the potential restoration of the BC-Alberta intertie, offer some long-term promise for moderating electricity prices and enhancing overall grid stability and reliability.

However, it is crucial to acknowledge that these solutions come with their own complexities and costs, including the significant investments required for grid integration of intermittent renewables and the historical political or market design hurdles associated with intertie restoration. These challenges suggest that while beneficial, these mitigating factors may not fully offset the primary upward pressure stemming from natural gas exports in the immediate to medium term.

Natural gas in Alberta is entering a complex, dual-role phase. It is simultaneously being positioned as a high-value global export commodity via LNG Canada and remains the dominant fuel source for Alberta's domestic electricity generation. This duality means that efforts to decarbonize the electricity grid will face the challenge of rising natural gas costs, potentially making the transition more expensive or slower if not coupled with aggressive renewable deployment, large-scale energy storage, and successful implementation of technologies like CCS.

The long-term future of natural gas in Alberta's domestic energy mix will be defined by how effectively it balances its role as a high-value global export with its continued importance for reliable domestic power, particularly in a carbon-constrained future. The interplay of powerful market forces, strategic regulatory interventions, and evolving climate policies will continue to shape the affordability, reliability, and sustainability of Alberta's energy supply. Consumers and businesses alike will need to adapt proactively to this evolving energy landscape.

Your Power, Your Choice: A Call to Action from Big Rock Power

Given the clear forecasts for rising natural gas and, consequently, electricity prices, now is a critical time to consider your energy strategy.

At Big Rock Power, we understand the importance of stable and predictable energy costs for your home, farm, or business. While the market is set to experience increased volatility and higher baseline prices, you have options.

Locking in your electricity prices with a fixed-rate plan can provide certainty and protect you from future price spikes. Don't wait until the full impact of these changes is felt. Big Rock Power is a solid company and an active participant in the Alberta market, committed to transparent and fair energy practices.

·         We want to hear from you!

·         How do you think rising natural gas prices will impact your household or business in Alberta?

·         What role do you believe renewable energy, like wind and solar, should play in Alberta's long-term energy strategy?

We’d like to hear your opinion.

Let's discuss how Alberta can navigate this exciting, complex, and transformative energy landscape together!

If you want to know more about Alberta's Electricity Industry including it's history and it's future follow this link.

Visit http://www.BigRockPower.ca today to learn more about your options and secure your energy future.