Should you lock in Utility Costs?

[dannielsen]

Hi everyone,

I locked in my gas costs a few months ago at 8.99 per GJ and the current market rate is only 7.22 and I have read that they expect it to go down. This difference works out to apx. $20/ month on a 4 bedroom house.
Looking at this from a long term point of view, what are your thoughts in regards to riding the market rate or keeping the 5 year fixed rate.
Same question for Electricity. I can lock in at 12.99 for 5 years or ride the market, which is currenlty at 10.05
Please note that rates are different in each area, I am in central Alberta.

Thanks for your input and advice.

Dan

 

[Thomas Beyer]

QUOTE (dannielsen @ Feb 9 2009, 09:33 PM) Hi everyone,

I locked in my gas costs a few months ago at 8.99 per GJ and the current market rate is only 7.22 and I have read that they expect it to go down. This difference works out to apx. $20/ month on a 4 bedroom house.
Looking at this from a long term point of view, what are your thoughts in regards to riding the market rate or keeping the 5 year fixed rate.
Same question for Electricity. I can lock in at 12.99 for 5 years or ride the market, which is currenlty at 10.05
Please note that rates are different in each area, I am in central Alberta.

Thanks for your input and advice.

Dan
locking in is ALWAYS more expensive, on average ... as the utility provider has to cover their risk of an unknown rate 3 years out by passing the risk, i.e. cost onto you ...

lock in only if you know the rate is at the bottom ... for 5 years ... say gas @ $3/GJ or electricty @ 4 cents ...

 

[dannielsen]

Thanks for your reply,

I feel like a bit of a sucker, I will try to get out of my contract. When they come to the door and give you their sales pitch, I am usually very hesitant to sign anything, but they were so confident and they had tonnes of graphs and stats showing that the price of gas was going to go thru the roof in the next year.
They were very good. I guess this is a live and learn experience.