By Collin Gallant on January 3, 2018.
Utility rates in Medicine Hat are reaching pricing milestones, but are heading in different directions.
New rates posted by the City of Medicine Hat’s utility department on Tuesday show gas will sit at its lowest price on record for the month of January, a period of time when demand and therefore prices are typically high.
At the same time, the current electricity rate jumped to its highest price of any month since 2015.
Local administrators, however, warned against making too much of the unique situation, adding that recent cold weather hasn’t been figured into supply projections.
Local utility commissioner Cal Lenz tells the News local rate setting involves forecasts filed by Alberta’s major gas distributors before the recent, widespread cold snap across the continent.
Those forecasts play a large part in price setting formula, and Alberta Utilities Commission allows costs to be recouped in future months.
Even then, stressed Lenz, natural gas market price will likely remain low.
“I would think short of a very, very cold winter for the first part of the year, we’ll see soft prices, but then they’ll (readjust) after that,” said Lenz.
The local price for natural gas in January falls to $1.736 per gigajoule, down from $2.27 in December, while power price rises one penny compared to last month to sit at 4.93-cents per kilowatt hour.
The power rate is the highest since the beginning of the recent economic downturn in late 2015 when industrial activity and power requirement dropped.
This month the city changed its formula for charge setting to account for only rates approved by the Alberta Utility Commission in determining an average price.
The comparable rates for gas were $1.56 by AltaGas and $1.911 by Direct Energy.
The highest of four approved electricity rates was 5.143-cents offered by Direct Energy. The lowest was 4.703-cents from Epcor utilities in rural distribution areas.
Previously, Medicine Hat utility officials used prices from 10 locations to determine the average power prices and similarly, four major gas suppliers.
The change is a condition of Medicine Hat’s municipally owned utility falling under the provincial government’s price cap of 6.8 cents for power.
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