Power price cap remains after tax kill

By COLLIN GALLANT on June 1, 2019.

cgallant@medicinehatnews.com@CollinGallant

The carbon levy has been cancelled, but a consumer price cap on electricity – which the charge has been paying for – will remain in place for the time being, the Alberta Energy Ministry confirmed on Friday.

June electricity rates are due out on Monday, about four days after the new United Conservative government did away with the carbon charge on natural gas and vehicle fuel.

Part of the levy’s revenue however, was earmarked by the previous New Democratic government to keep power prices at or below 6.8 cents per kilowatt hour. Albertans with regulated rate contracts and all City of Medicine Hat utility customers only pay that amount or less. If the actual market price rises above that, the difference is paid to generators directly from levy funds.

A ministry spokesperson said Friday the program is in the Alberta government’s spending plan, but all policies are being examined by the new UCP, which has been in power for about six weeks.

“The cap remains in effect and we will be reviewing all the polices brought in by the previous government,” said Samantha Peck of the minister’s office. There was no immediate timeline, she said.

According to information filed with the Alberta Utilities Commission, only Epcor’s proposed price of 7.1-cents for June will be above the ceiling.

Medicine Hat bases its price as the average of three major retailers, and as such should see prices below the 6.8-cent mark.

That price cap is the 10-year average price of power in Alberta from 2007 to 2017, when the cap was instituted.

It went into effect several times last year, and observers say it will become an issue this summer, when demand and power prices traditionally rise.

In terms of natural gas, Mayor Ted Clugston said that the city’s utility department hadn’t received any formal direction from the province about how to handle the carbon charge on local utility bills.

However, when the levy was instituted in early 2017, the city’s automated metering system was employed to ensure the charge wasn’t applied to gas used before midnight on Dec. 31, 2016.

Clugston felt the same could be done for gas consumed after midnight on May 30 – the expiration date set by the province.

“We’ll be calculating it properly when it comes to taking it off the gas bills,” he said.