cgallant@medicinehatnews.com@CollinGallant
COLLIN GALLANT
Nothing got Hatters hotter under the collar in 2023 than air conditioning… specifically, the cost of running it.
Sky high power bills across the province and a new contract pricing system renewed long-simmering complaints about linking local rates to the provincial average during the long, hot summer.
The back and forth between council, staff and competing protest groups eventually led to new rates, millions awarded in utility credits and a wholesale review of the utility’s business model.
That took place as general inflation squeezed household budgets and the power market, including exports out of the city, promised a $130-million profit.
In the city that’s defined itself as a public utility powerhouse for 110 years, the uproar over electricity prices was the Story of the Year in 2024.
“There’s no question about it,” said Phil Turnbull, the former alderman who chair the city’s utility committee up until 2021.
He also spent the summer advising some groups that organized to oppose high prices, but now considers himself independent, and as a private citizen will await the outcome of new business review.
“It’s easy to say, ‘Oh, the city should have done this, or I would have done that,'” said the former council member. “But people in leadership positions do have to decide what’s the best interest for both the economics of the utility and the consumer.”
In January and again in July, current council members had discussed forecasts that predicted record-breaking provincial rates, but a majority voted to again hold off on a rate review while increasing a support program for qualified low-income earners.
That came to a head though in August as contracts held over from 2022 expired for a majority of Hatters and prices doubled or quadrupled under a new contracting system.
Hatter Nicole Frey, who had harshly critiqued council on other issues, and business owner Sou Boss called for immediate action, organized a 500-person meeting and eventually petitioned the province to step in and evaluate power plant operations.
Days later, council held a special meeting to lay down the terms of a relief package and later approved credits, an interim rate and a larger review of profits and financial operations.
“It meets the ask,” said Mayor Linnsie Clark in September of the package that actually puts the local cost of power this year – considering credits and rates – as one of the lowest in Canada.
“People were feeling crunched and the energy issue really is an affordability issue,” she told the News in a year-end interview. “I’m grateful that we own our own utility and can maximize the benefit for our residents.”
Since rate-setting changed in Medicine Hat in 2009 to the average of other power and gas rates in the province, elected officials and staff have promoted the independence of a city-owned utility as avoiding large provincial transmission fees and providing municipal revenue at no more than average price to consumers.
This fall, administrators defended the philosophy behind the practice stating it gives a baseline to meet the market price of private-sector competitors – “running the business as a business,” according to energy division head Rochelle Pancoast.
Meanwhile, she said, city reserve funds built up by profits earn interest to offset taxes, cover liabilities and pay for construction. Changing the profit model or dividend will have large effects throughout city budgets, she said.
Critics however, called for an immediate switch to rates based off the bare cost of production, and went as far as to call for the province to audit the city and break up the power franchise area, thereby allowing other contract choice.
Boss led meetings in the summer and is now formalizing a group to continue to lobby council on fiscal issues and rate reform.
“I feel that this is long overdue,” she told a crowd in August. “For most (businesses), increases are in the thousands.
“Everyone, regardless, should be getting the best rate without having to gamble (on contract options) … We don’t have an option and that’s why we should be offered the lowest rates.”
Former mayor Ted Clugston made a rare statement to the media since leaving office blasting the current council.
Councillors have also preached that a careful examination is needed.
“Some of us on council saw a train wreck coming in June, and tried to address it,” Coun. Andy McGrogan, who raised the issue in the spring along with Coun. Darren Hirsch, told the utility meeting crowd at one point. “Well, here’s the train wreck.”
Premier Danielle Smith weighed in during October, having broadcast her government’s plan to address larger market problems, saying the mayor and council have put rates about where she wanted them for the province.
“I’d cut her a break,” Smith said as Clark joined her at a ribbon-cutting ceremony.
Hatters responded positively in a News poll about the council approved package, but vocal critic Nicole Frey launched a recall petition aimed at Clark, eventually only securing one-third the required signatures.
She said this fall the effort has shone a light on practices within the utility, and she still plans to lobby the province to get involved.
“I hope that the city and council take this seriously,” Frey told the News. “Despite us not meeting (the) signature-count requirements, a substantial number of citizens are unhappy.”
Administrators are now in the process of contracting a third party to complete the review.
