City profits big time off recent cold spell

By COLLIN GALLANT on January 22, 2020.

cgallant@medicinehatnews.com@CollinGallant

City utility officials say power exports during last week’s cold snap were substantial when the prices paid on the provincial grid were 12 to 15 times higher than rates for local customers.

During a light agenda at Monday’s council meeting, utility committee chair Coun. Phil Turnbull brought up the subject, stating that Medicine Hat’s municipal power plant helped the province avoid rolling brownouts when demand rose and supply was hampered.

“The business unit is strong and efficient, and profitable as it should be,” sad Turnbull.

“They say we’re the forgotten corner, but we kept the lights on in the rest of the province.”

Exact figures won’t be made public, but both Clugston and utility commissioner Brad Maynes said the city had made about 100 megawatts available for export during the cold snap.

“As residents we should be proud of that,” said Maynes, who added there was no chance of local brownout while the provincial system was on alert.

Over that time, provincial power prices spiked to more than $900 per megawatt hour during most daylight and early evening hours over of four days.

Actual exports and prices fluctuated, but the city could have earned $90,000 or more per hour.

Clugston likened the week to Christmas shopping.

“The (general) retail sector makes most of its money in December, and we make money during a cold snap,” he said, noting that high grid prices don’t affect local rates.

The cost will be recovered from rate riders from distribution companies elsewhere in the province.

Most local customers will pay about 8-cents per kilowatt hour for power in January, but last week the export price sat closer to $1 per kilowatt hour. That is caused by Alberta’s deregulated power market structure, which sees prices rise up to a $1,000 cap when supply doesn’t meet demand.

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