City energy division staff are painting a bleak picture for power pricing for the foreseeable future, drastically affecting revenue in a situation committee chair Coun. Ted Clugston called "pretty horrific."--NEWS FILE PHOTO
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In a short meeting of the energy, land and environment committee Thursday afternoon, city staff shared a bleak outlook on the future of power prices.
The city’s energy director Travis Tuchscherer gave a brief market update for power prices at Thursday’s meeting. He described a “very slow start to the year” in terms of power pricing, with year-to-date prices on the wholesale market averaging at $37.86 per megawatt hour.
Projections for the balance of the year climb slightly to $45.31 per Mwh, with forecasts for the 2027 calendar year projecting an average of $52.27 per Mwh.
Natural gas prices are also trending low, with year-to-date prices at $2.29 per gigajoule, a low number for the winter heating season. The balance of the year is expected to drop further to $2.05 per GJ, before improving slightly for the 2027 calendar year to $2.57 per GJ.
In 2024, when power prices reached record highs, the city’s energy division turned a profit of $134 million. Last year, with prices plunging, profit was only $12 million.
Councillor Ted Clugston, chair of the energy, land and environment committee, described the prices as “pretty horrific.”
Clugston asked city staff whether they expected prices to improve to their previous level, in the ballpark of $60-$90 per Mwh.
Tuchscherer told the committee that projections for the 2030 calendar year forecast power prices of $66 per Mwh, but reminded them that many variables informing that estimate may change between now and then.
Tuchscherer says while pool price is an important indicator of prices for the city, volatility in the market also factors in, and the near-term forecast sees market volatility increasing.
The meeting also confirmed alteration of a land designation related to berm infrastructure.
City staff are looking to change the designation on the parcels to public utility lots. Staff say there is no impact to the public space, describing the designation change as an administrative housekeeping item at the end of the project.
The suggestion follows guidance from Alberta Environment and Parks.
If the proposed bylaw passes a first reading, a public hearing would be scheduled to discuss the designation change.
