Every energy contract decision comes down to a trade-off between certainty and cost. This year, one of our Alberta agricultural clients made that trade-off deliberately, moved off a fixed supply rate, and cut their power supply costs by 35%.
The decision they faced
Like a lot of businesses in Alberta, this client had been on a fixed power supply rate: a locked-in price that doesn’t move with the market, regardless of what’s happening with generation, demand, or weather. Fixed rates exist for a reason: they trade potential savings for predictability, which is exactly what a lot of operations want, especially ones with tight, seasonal cash flow like farming.
What they changed
Rather than renewing into another fixed term, they made the move to AESO’s pool price : Alberta’s real-time wholesale electricity market rate. Alberta is the only Canadian province with a fully deregulated electricity and natural gas market, which is exactly what makes this kind of choice possible here: businesses can genuinely choose between a fixed contract and exposure to the pool price, rather than defaulting to a single regulated rate.
Floating with the pool price means your power costs move with the actual market, hour to hour. Some periods cost more than a fixed rate would have. Others cost significantly less. Over the course of this year, for this client, it came out 35% ahead of where their fixed rate would have landed them.
Why this isn’t a universal recommendation
It’s worth being direct about what this case study does and doesn’t prove. It doesn’t mean floating with the pool price is the better choice for every business, or even for this same client in a different year. Pool prices can also move sharply higher, and a business without the cash-flow flexibility to absorb a bad month on a floating rate can be far better served by the certainty a fixed contract provides. This result reflects how the market happened to move this year, combined with this particular client’s risk tolerance and ability to handle that variability.
What this means for your business
The real takeaway isn’t “switch to floating.” It’s that the right structure, fixed, floating, or something in between, depends on your specific business, your risk tolerance, and the conditions of the year you’re actually in. That’s a decision worth working through deliberately rather than defaulting to whatever you signed last time, and it’s exactly the kind of question a second set of eyes can help answer.
