Understanding Floating Electricity Rates: Pros, Cons, And Who They’re For

If you have ever looked at your power bill and wondered why the price per kWh changes month to month, you are not alone. In Alberta’s deregulated market, you can choose a fixed rate or a floating rate for electricity.

Floating rates, also called variable rates, track the market. That can mean savings when prices fall, and spikes when supply is tight. This guide breaks down how floating electricity works, whether it fits your home, farm, or small business, and what to watch for as we head into fall.

What is a floating electricity rate?
A floating electricity rate is a plan where the price you pay per kilowatt-hour changes with the wholesale market. In practice, your energy charge follows the market cost each month, plus a small retailer margin.

For example,Burst Energy’s variable plan uses wholesale price plus 0.40 cents per kWh, with a standard monthly admin fee.
When demand is low or supply is strong, market prices tend to dip. When heat waves, cold snaps, generator outages, or transmission constraints occur, prices can jump. On a floating rate, your bill reflects those movements in near real time.

How floating rates compare to fixed rates
Price behaviour: Floating rates move up and down with the market. Fixed rates stay constant for the full term.

Risk profile: Floating rates can be cheaper over certain periods, but you carry the risk of price spikes. Fixed rates shift that risk to the retailer in exchange for a premium for stability.

Flexibility: Floating plans typically have no long term contract or exit fees, so you can switch when your needs change. Fixed plans may have terms and early exit fees.

Budgeting: Floating requires some tolerance for month to month swings. Fixed makes budgeting easier with predictable energy charges.

Who benefits most from floating electricity?
Floating rates can be a smart fit if you:
Track usage closely and can shift flexible loads to off peak or favourable months.

Value flexibility over price certainty, such as when you expect to move or change locations soon.

Run operations that vary seasonally, like farms with irrigation or grain drying that can shift timing based on price signals.

Are comfortable watching the market and switching to fixed if prices trend higher.

They may not be ideal if you:
Need steady, predictable bills for tight budgets. Have high, non negotiable loads that you cannot shift, such as refrigeration, medical equipment, or continuous production. Prefer set it and forget it simplicity.

Seasonal insights for fall in Alberta
Fall is a transition period. Cooling loads drop as summer heat fades, and heating loads rise as nights get colder. A few seasonal factors to watch:

Shoulder season volatility: Mild shoulder months can see lower average prices compared to summer peaks or deep winter. Floating customers sometimes benefit here.

Early cold snaps: A sudden cold front can push demand up quickly, adding price risk. If your operations rely on electric heat or you expect a fall harvest rush, keep an eye on short term forecasts.

Maintenance season: Generators often schedule maintenance in spring and fall. If multiple plants are offline and a cold spell hits, prices can swing. Monitoring helps you decide whether to ride it out or switch to fixed.

For farms and ag operations, plan around your fall tasks. If you expect heavy electricity use for grain handling or ventilation, consider setting alerts on daily pool prices. If a price spike aligns with a must run day, you can sometimes reschedule non critical work or run equipment at lower cost times.

For small businesses, review your hours and HVAC schedules. Even simple steps, like pre heating or pre cooling during lower price hours, can trim costs on a floating plan.

Should I lock in my electric rate in Alberta?
It depends on your priorities:
Lock in a fixed rate if you value budget certainty, expect higher usage over winter, or are uncomfortable with price swings. Fixed plans protect you from spikes during extreme cold and can make cash flow planning easier.

Stay floating if you want flexibility, can handle some volatility, and are prepared to switch quickly if the market turns. Many Albertans use a hybrid approach, starting on a floating plan to watch prices, then locking in when a fixed rate they like appears.

A practical rule of thumb: if you would lose sleep over a month with higher than expected bills, fixed is your friend. If you prefer chasing savings and can adjust behaviour, floating can work in your favour.

How much is electricity per kWh in Edmonton?
Market prices change monthly, and your final bill includes distribution, transmission, and fees that vary by location and usage.

On Burst Energy’s variable plan, the energy charge has recently averaged in the mid single digit cents per kWh over a six month period, but that can change with market conditions. If you are comparing options today, review the latest posted Edmonton electricity rates and, for a broader scan, check plans that aim to
be the cheapest electricity edmonton. Always compare the full landed cost, not only the energy rate, to understand your total bill.

Tips to manage a floating plan on a budget
Know your load: Identify your top three electricity uses and when they run. Shifting even one of them can make a difference.

Watch the weather: Alberta’s electricity prices often respond to temperature extremes. Plan flexible tasks around mild days.

Set thresholds: Decide in advance what average monthly rate would trigger a switch to fixed. If you see forecasts or forward prices moving toward that threshold, act.

Use efficient gear: Simple upgrades reduce exposure. LED lighting, smart plugs, and HVAC tune ups lower kWh every hour of the day.

Consider tools: A home energy monitors guide can help you see real time consumption, making it easier to avoid surprises.

Floating vs fixed for farms and small businesses
Farms: Floating can suit operations that can shift irrigation, aeration, or charging equipment to lower cost periods. If you expect a surge in winter barn heating or continuous ventilation, a fixed rate for those months can stabilize costs.

Small businesses: Retailers, offices, and workshops with set hours often prefer fixed for predictability. If you have flexible production or can pre condition spaces, floating can produce savings, especially in shoulder seasons.

Many clients blend strategies. For example, fix a portion of expected base load for stability, and keep the remainder floating for flexibility. You can also reassess seasonally, floating in spring and fall, then fixing for winter.

How to decide in three steps

1. Estimate your next 6 to 12 months of usage and note any seasonal spikes.

2. Set a budget tolerance. Decide the highest monthly bill you are comfortable with.

3. Choose the plan that aligns. If the tolerance is tight, fix. If you have room and flexibility, float. Recheck every quarter.

Final thoughts
Floating electricity rates give you control and flexibility in Alberta’s market. They can deliver savings when prices fall, yet they come with the risk of spikes during tight supply or extreme weather. If you manage your usage, watch seasonal patterns, and are prepared to switch when needed, floating can fit your home, farm, or small business. If predictable bills matter more, a fixed plan brings stability.

Ready to compare options tailored for Alberta customers? Explore variable electricity alberta to see how a flexible plan could work for your needs, or review fixed rate electricity edmonton if you prefer price certainty going
into winter. Whatever you choose, a clear plan and a little monitoring go a long way toward keeping your power costs in check