The Alberta Energy and Utilities Board approved ATCO's request for a 50% rate hike Wednesday. The utility said it needed the increase to pay down a growing deficit.
But Ziff Energy, Canada's largest gas consultant, says ATCO bought its gas on the spot market this year instead of locking into a future price last spring. Bill Gwozd, who manages the company's gas portfolio, says spot buying usually ensures the cheapest rate for customers.
"It's generally better to purchase gas on a day to day process, buy what you actually need," says Gwozd. "Now, there's arguments the other way. People could say well there's risk. Well, it depends on your risk tolerance. How much risk are you prepared to accept?"
Gwozd says producers who sell gas on the futures market usually charge higher prices to guard against them falling later on. But he says prices did not drop this winter because of soaring demand for gas and growing markets in the United States.
"It's easy to go back after a decision's been made in post-audit and say, 'you know, somebody should have done this, we should have done something else,'" he says. "But, often, when things go right, it's never brought to anybody's attention."
ATCO's rate hike isn't necessarily locked in. The AEUB will hold public hearings on the increase in a few weeks.
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