Upgrading the entire power distribution system to meet demand of car chargers, hot tubs, furnaces and general improvements could cost more than $300 million, according to new estimates. City crews repair a broken power pole in this April 2021 file photo.--NEWS FILE PHOTO
cgallant@medicinehatnews.com@CollinGallant
Readying Medicine Hat’s power lines for a more electrified future could cost upwards of $300 million, a city committee heard earlier this month.
The update, given April 6, also calls on city planning staff to begin requiring larger power connections in new communities, but study the issue of retrofitting 25,000 existing homes.
City councillors also said the distribution company must act to meet customer demand, and smaller steps can be taken today to prepare for a monumental amount of work.
“A very high-level estimate for just the distribution system is about $334 million and it would take 26 years to complete … for an upgrade to every home,” said Grayson Mauch, the director of the city’s water and power department, who was tasked with studying the issue last year.
“We are studying the impact on power (delivery) rates … and $148 million would be on the customer’s side of the meter, so there are cost upgrades that customers would need to do within their homes to receive (more power).”
The current standard is to build the transmission line infrastructure and home connections to handle 100 amps. Each transformer services up to 10 houses, but usually with one of two open slots.
That means a homeowner could get lucky with an upgrade to 200 amps, but, if there is no extra capacity, the application could cost up to $40,000 to complete.
Coun. Robert Dumanowski raised the issue early last year, saying the situation was unfair and an impediment to home improvements and construction activity.
This month he called the new estimate substantial, but the need for more power is inevitable, in his opinion.
“Almost certainly homes will be above 100 amps,” he said, adding the city has the ability to pool costs to finance work over decades.
“I am hopeful we’re working on a way forward, but what’s the middle ground approach that we can take to work with the residential development community so they aren’t pinched between the need and a significant burden.”
“We’re not going to get there overnight, but what can we do today to help those who are modernizing to get them over that hump, and at the same time, not bankrupt (the utility).”
He said that could include upsizing infrastructure as needed, creating a finance model to spread costs.
The committee did recommend the planning department evaluate minimum local standards to make new house builds ready for 200 amps, which could be accomplished later this year.
The new home building community told the News that upgrading service would actually reduce their costs compared to the current system, which sees typical upgrade costs between $5,000 and $20,000, if a local network upgrade is needed.
Rather than one application, the cost would be split up among neighbours.
“It’s long overdue, but who could have seen it coming,” said Aaron Brost, the owner of Brost Developments and director with the local BILD homebuilders association.
He said new home buyers are asking for home designs that will require more service, and that cost is already being folded in. Retrofitting can be much more expensive, but the cost related to system upgrades could be better spread out to the community.
“The situation in Medicine Hat is especially (acute), because of our air-conditioning load … that takes you over 100 amps pretty quickly.”
Utility committee member Coun. Darren Hirsch said it was important to develop a clear plan now, but not overstate the city’s ability to tackle the issue single-handedly. That could influence residents’ decision making on construction, or come into conflict with current business plans.
Utility division head Brad Maynes said analysis can be done, but any change must be approved by council.
“We run the utility business as a cost-recovery model … but we can bring those options to council,” he said.
Beyond higher capacity air conditioning in generally larger new homes, demand is rising due to electric car charging, higher-technology appliances and the potential of heat-pump furnaces. Solar panel installations that put power back on the grid at times also require larger capacity hookups.
In the past six month, the city’s distribution department performed 12 upgrades, including five for infill construction, four to accommodate hot tubs, and one each for a detached garage, an electric car charger and one residential solar panel installation.
As it is, only about 50 electric vehicles are registered to owners at Medicine Hat addresses, but the city expects the number to climb dramatically in the short to medium term.
Mauch also said the city is watching pilot projects at several other utilities to manage new power draw from residential systems for vehicle fuel. That could include time-of-day limitations, by which access would be governed to 100 amp during high-demand daylight hours, but raised overnight to encourage non-peak charging.
