In 2011 we decided to enter Alberta’s energy industry. Our goal was simple, we wanted to offer electricity, natural gas, and green energy to Albertans for less. People told us we were crazy and that no one could compete with the incumbent government utilities.
We begged to differ and proudly joined a group of local Energy Marketers who, together with Utility Network and Partners Inc. (UTILITYnet), compete against the big retailers and subsidized regulated utilities. This collective group of companies is known as the Peoples Utility, and was created with Albertans in mind.
When we started NewGen Energy we knew we wanted to be different than the large Regulated Rate Utilities that dominated the market. We knew we wanted to be better.
Today, collectively our group now has customers in over 300 Alberta communities. We are focused on our local community but can offer services throughout all of Alberta. Most importantly, NewGen Energy guaranteed rates are lower than the government capped Regulated Rate Option (RRO). No one can compete with government utilities? We have proven that it is possible!
We are focused on providing local customer services; lower energy rates; educating consumers on the energy market; providing innovative services; and, un-complicating the complexities of buying energy.
We firmly believe that buying energy in Alberta should be simple, hassle free, with open contracts, with zero penalties, and fairly priced. Most importantly, we believe that provincial regulated utilities should not be allowed to ship jobs offshore and receive carbon tax dollar subsidies to help guarantee their profit margins.
Innovation Without Borders
Part of our strive to be different is our commitment to innovation. We are proud to offer a number of customer centric programs, most of which are unique to companies like us in the new People’s Utility.
Some of these programs include:
· No exit fees: customers can leave or change rates with just 10 days notice with no fears of penalty fees
· Energy options that include both variable and low guaranteed rates that protect consumers from price fluctuations
· Special and lower rates for seniors
· A strong community focused program of giving back to those in our local neighborhood
· Pick-a-date program: letting our customers pick the date when they pay their utility bill
· Budget billing: to help customers better manage their household expenses
· A unique loyalty payment program which allows customers to earn rewards points
· A number of green energy options focusing on the future
Many of these programs have been ignored by the large regulated utilities. This is what makes us different.
Concerned About the Future
Today, the private sector and other businesses like ours have never been more at risk. Current government policies, subsidies, and outsourcing (under this government and the previous governments) has had a major negative impact on the future health of our industry.
We are wrong to leave our children with a growing debt that they will have a hard time paying down or leave them a dwindling workforce ravaged by outsourcing.
Alberta’s electricity market is going through a restructuring. The province will phase out coal-fired power plants and try to reach a goal of 30% of electricity generation coming from renewable sources by 2030. This transition is going to be expensive. The first major expenditure we encountered on our way down this path was the cancellation fees of the Power Purchase Agreements (PPAs), which totalled $2.25 billion. This is money that the government had to borrow and loan to Alberta’s Balancing pool to keep it afloat. Additionally, to try to encourage more investment in Alberta’s power market, a new capacity market, which will guarantee those participating a guaranteed base income stream, will be introduced in 2021. In the end, consumers will be on the hook for all the extra costs that arise.
With new policies already in the works, electricity prices have become unstable and an increase in prices has begun. In preparation for this the government has introduced a subsidy on the Regulated Rate Option (RRO). Regulated Rate providers like ENMAX, EPCOR, and Direct Energy are receiving millions of dollars in subsidies to keep their rates artificially at 6.8 cents/kWh. Funding for this subsidy is coming out of the Carbon Tax. Over $70 Million in subsidies estimated this fiscal year alone.
Why are we concerned? This policy is tilting the playing field towards the RRO utilities and away from small independent companies like ours. Additionally, many of the RRO utilities who are being subsidized are some of the same companies that have outsourced hundreds of jobs outside of Canada.
Regulated Utilities Cut Costs, Increase Profits and Ship Jobs Out of Alberta
Have you ever heard of the Local Multiplier 3 (LM3)? It was developed by the New Economic Foundation as a simple and understandable way of measuring local economic impact. The multiplier effect measures the number of times a dollar circulates within an economy. It was developed on the idea of the ‘leaky bucket’.
Think of this: ATCO outsourced over a billion dollars when they signed a 10-year deal with Wipro, a company out of India. $120 million a year. Direct Energy did the same and even sold off all their natural gas holdings for $722 million to a group from China. To a lesser degree ENMAX did the same by outsourcing their IT jobs to India. How many dollars using the multiplier will be lost to our economy?
If you imagine the local economy as a bucket full of water, every time you spend money that goes outside the local area, it leaks out of the bucket. Generally, our energy is focused on trying to pour more money into an area so as to keep filling up the bucket. However, a better starting point for strengthening the local economy should be to try to prevent the money leaking out in the first place. Remember – the money leaking out is your tax dollars.
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Last year, during the winter months, the typical homeowner spent about $38 for the natural gas they consumed, and an additional $26 for the carbon tax. This is an effective commodity tax rate of almost 70%.
At NewGen Energy we believe strongly in a path towards a greener future and helping to green Alberta’s electricity grid, which is why we provide an option for our customers to green a percentage of their electricity consumption from 5% all the way up to 100%. But, the current RRO cap, funded by the carbon tax is not doing anything to move us towards a greener economy. We believe the carbon tax dollars should be used for what it was originally intended for.
Want to support a local Albertan company that doesn’t ship jobs out of the province and supports the local community? Sign up with NewGen Energy today.
