Medicine Hat's main power plant next to the South Saskatchewan River is shown in this file photo. Power prices for January in the city have risen to record levels.--NEWS FILE PHOTO
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Power prices in Alberta have risen to record levels this month, and the price in Medicine Hat, which mimics the provincial average, followed along for customers without fixed-rate pricing.
A local rate of 16.19 cents per kilowatt a hour is the highest ever recorded in the city, topping the previous record of 14.8 cents in January 2012 by almost 10 per cent.
That comes after a freezing cold December sent energy prices soaring on the Alberta grid, and generators, which submit default pricing rates to regulators, look to recover the difference between early December forecasts and actual results.
Medicine Hat’s utility department doesn’t “true-up” its forecasts, but charges the average of four major generators, which do.
That sent default prices to levels not seen in a decade. The price for power sat above 13 cents for three months in late 2011 and early 2012, but only a few times since.
Rates remained above 10 cents for the last half of 2021, but the previous 10-year average was 6.8 cents – the level where administrators set the city’s fixed rate option in 2017.
Prior to 2009, the city’s utility department set the price on a yearly basis, but changed the formula to determine a monthly floating rate at the average of other market rates.
For January, those AUC approved rates range from 15.88 cents from Enmax to 16.39 cents from Direct Energy.
The local fixed rate was adjusted up to 8 cents on Jan. 1 for customers that had been on the option for more than six months. Customers who sign up in the January billing period will be charged the new rate.
That rate is set as a combination of cost recovery plus a rate of return that mimics other AUC approved rates, and rose this year as higher natural gas prices are expected and expenses at the gas-fuelled power plant are expected to rise.
Natural gas for home heating fell back in January, according to the new floating rate published Tuesday.
It sits at $3.65 per gigajoule in January, down from $4.79 the month before and $5.35 in November.
The comparable rates across Alberta were $3.40 from Apex Utilities (formerly AltaGas), and $3.89 from Direct Energy in both its north and south service areas.
The city’s fixed gas rate is $4.35 for gas used after Jan. 1.
