Understanding Gas Co-op Rates
We receive calls from our customers requesting to 'lock in' their gas rate. Pioneer Gas Co-op Limited operates under the umbrella organization of the Federation of Alberta Gas Co-ops Limited, along with 52 other gas co-ops in Alberta. Co-operatives are uniquely different from all other Alberta gas utililties and retailers. We are locally owned with rate and fees set locally. We operate on a non-profit basis - meaning any funds generated are re-invested back into the utility to operate or improve the gas system (no dividends or profits are paid out). That keeps us responsive to our members and allows them to have a say on their rates and fees through our locally elected board. If you are a member of Pioneer Gas Co-op, then you have 1 share and therefore one vote at the Annual Meeting or any other special meetings of the membership. We encourage you to attend and get involved!
​
There are different types of natural gas distributors in Alberta: Investor-owned, Co-operative and Community-owned. Each gas distributor has a provincially set franchise area that gives them both the obligation and exclusive right to supply natural gas to their customers in their franchise area. From this legal obligation and exclusive right, for-profit, competitive retailers are not permitted to sell natural gas in our Co-op franchise. The local utility (Pioneer Gas Co-op) is the retailer and flows-through gas costs to the consumer. Our gas costs are set by Gas Alberta Inc. on a monthly basis. This flow-through nature of the cost doesn't allow for customers to lock in rates. Through gas Alberta's procurement process, monthly rates are usually lower than competitive retailers' fixed price options.
​
Investor-owned gas distributors are usually owned by shareholders and operate on a for-profit basis. Gas rates are set by the company but must be approved through the Alberta Utilities Commission (AUC). The AUC allows the investor owned distributor to include a profit in their gas rates and they are able to apply for cost-recovery fees if a loss occurs. The investor-owned gas distributor does not directly interact with the consumer - that is left up to natural gas retailers. It is the retailer that the consumer contracts with for their supply of gas. The investor-owned gas distributor charges the retailer the cost of transporting the gas to the consumer plus any riders they may have; the retailer passes on those costs to the consumer along with any administrative or other fees the retailer may have. With retailers, customers may be given the choice to lock in rates for set periods of time, which can provide rate stability but are generally higher than current market rates.
​
Gas Alberta Inc. is owned by the majority of Member Utilities of the Federation of Alberta Gas Co-ops Ltd. It is Gas Alberta's mandate to purchase natural gas supply from the market for these utilities at rates lower than the regulated natural gas retailers. Prior to the start of each month, Gas Alberta designs a natural gas rate (on a $ per GigaJoule (GJ) basis) to cover its estimated gas costs to supply Federation utilities for the upcoming month. This monthly pooled rate is then forwarded to the utilities to charge their customers. This rate is affected by market forces. As the market price for natural gas increases or decreases, so does the cost of gas for our residents, farms and businesses. On top of the monthly pooled rate, Gas Alberta charges the utilities a small variable rate to cover the costs of administration and goods and services relating to the safe and reliable supply of natural gas to consumers. The Co-op charges an additional fee to cover the costs of administering, operating and maintaining their gas utility and supply.
​
​
​