New Year, New You – New Condo Utilities Contract!
The new year is a time to look back and take stock of things. To reflect, reminisce, and even reconsider. To set yourself up for success and prosperity over the next twelve months, whatever they might bring.
We’re all about raising standards here at Catalyst, so we can definitely get behind this sort of inward-focused self-improvement. Some folks accomplish this by planning to hit the gym more often, learning a new skill, or picking up a new hobby. However, when it comes to your condo board, one of the best new year’s resolutions is to ensure that things are in a good position.
We’d suggest looking at your energy contracts – and we’ve got the expert joining us today to walk you through what to look for. Ryan Dryden, Regional Manager at Hudson Energy, has shared his time to chat with us about what to look out for when your energy contract and how to put your best foot forward for your condo community as we head into the new year. 2023 waits for no one – let’s jump on in!
Five Tips to Help Your Energy Rate Resolutions
1. Take Rising Rates into Account Moving Forward
The first thing to know about the energy market heading into 2023? It’s not the same one we’ve come to know over the years past.
“The entire energy market has changed,” Dryden told us. “We’re seeing power prices at over 20 cents/kWh, gas prices hitting over $6/GJ. We saw last year that many boards were surprised to see this sort of an increase in their bills – it was something they hadn’t budgeted for. Many condo boards will budget energy expenses based on what they paid last year. Well, going into 2023, then, it’s time to do that budgeting.”
Knowing that your energy bills will cost more each month is one thing – but what can condo boards do to ensure that they’re getting the best energy bang for their buck amidst these rising rates? It all starts with looking at what kind of energy plan your condo corporation is signed up for in the first place.
2. Variable Rate vs Fixed Rate
Regarding energy billing, there are two types of rates a consumer has to pick between: fixed and variable.
“So, a fixed rate is just that: it’s fixed,” Dryden explained. “It doesn’t change. On the other hand, a variable rate is when you pay whatever the market rate happens to be that month – which, currently, is much more than it has been in the past. Some condo corporations like to be on the variable rate, so they’re not locked in, but the problem is that when you get a market surge like this, you end up being extremely exposed.”
That explainer helps to break things down for us – but at the end of the day, which approach to condo utilities is best?
3. Which to Choose?
When you’re kicking around going with a fixed or variable rate plan, there can sometimes be a lot of nuance in the decision depending on what’s going on with the market at the time. Right now, though, according to Dryden, things are pretty cut and dry.
“Any condo board that has been on the floating or variable market should look at moving to a more secured, fixed-rate program,” Dryden confirmed. “First and foremost, for budgeting predictability purposes, but also because things keep climbing up and up and up. Hopefully, most condo boards out there have already moved to a fixed plan – but many of them have not, and they’re going to get hammered this winter.”
4. A Third Contender: Hybrid Rates
Still torn between the peace of mind a fixed-rate program offers and the stress that comes with being “locked in” to a plan? There might just be a third option available that could be what you’re looking for: a hybrid rate.
“Hudson Energy is one of Alberta’s only energy retailers to offer a true hybrid option,” Dryden told us. “A hybrid program allows large-volume clients to fix a percentage of their usage and float the remaining amount. So, if you’re hesitant to secure because the markets are at a ridiculously high rate and you think they might course-correct, you can get the best of both worlds by going with a hybrid plan. That way, you’re getting secured coverage if the markets continue to rise like they are – but then if the markets start to correct and go down, you’re able to take advantage of that, too.”
5. Things to Watch Out For
Beyond ensuring you’re getting the right program plan for your condo community, Dryden left us with only one other red flag to look out for regarding condo utilities: ensuring you’re getting what you think you’re getting.
“Look at your contract and be sure that you can identify in black-and-white writing the rate you’re talking about – and if there are any additional charges mentioned that aren’t included in that rate,” Dryden cautioned. “Is there verbiage that’s talking about additional fees? Broker fees, adder fees, any sort of third-party fees? If so, you want to ensure you understand exactly what those fees are, what they’re doing for you, and where they fit into your budget.
“The most important thing,” Dryden concluded, “is ensuring that you know what the rates you’re being offered cover – because there are different types of programs out there, and the details can sometimes be the difference between making and breaking a budget. So make sure you understand each and every clause of that contract before you sign on the dotted line.”
Sound advice in any situation, we’d say!
Thanks again to Ryan Dryden from Hudson Energy for sharing some knowledge on condo energy rates and programs! Still looking to learn more about energy contracts as we kick off 2023 in earnest? Get in touch with us at Catalyst Condo Management today.