Utility prices causing a stir

By COLLIN GALLANT on January 28, 2022.

cgallant@medicinehatnews.com@CollinGallant

Hatters hit with high utility bills to start the new year can expect to hear more on the issue soon.

Councillors at Thursday’s meeting of the corporate services committee say they have heard an overwhelming amount of complaints about high energy bills this month and they would like to administrators to provide more answers to the public.

Bare commodity prices for power and natural gas are the highest they have been in 10 years for customers on default pricing in Medicine Hat, where for 13 years customers are charged the average of rates across the province.

Even fixed rates now offered by the city are high compared to average prices over the last 10, and high-use months have caused bills to rise, said administrators.

“Most people are looking at their bottom line and want a better understanding,” said Committee chair, Coun. Robert Dumanowski.

Coun. Cassi Hider said she found staff very accommodating when she contacted them to set up her business with fixed rates, and would like the program publicized so more Hatters could explore the option.

Coun. Shila Sharps said she’s been sent copies of bills from ratepayers confused about the charges.

“We’ve certainly been getting a lot of queries to our customer service department about high utility bills,” said corporate services division head administrator Dennis Egert.

He said staff attempt to settle complaints, directing customers to information about locking in fixed rate prices, evaluating energy use through the utility department’s HatSmart program, or, in some situations, accessing programs such as Community Warmth to clear up back payments.

Dumanowski, also a member of council’s utility committee, said that he’s heard more discussion than ever before about fixed rates, but city officials say only one-third of customers are taking advantage.

The city’s fixed rate option sets a standard rate, say officials, but that is charged against usage which likely rose steeply in December as colder temperatures kicked in and included weeks of extremely cold weather.

Utility customers on the default rate will pay 13.2 cents per kilowatt hour in December, about twice the price of electricity in the same month over the last three years.

January saw the floating rate rise to an all-time local high of 16.2-cents, where it is expected to stay in February.

At that price, a typical home that uses 500 kilowatts in the month would pay $81 in bare commodity charges before other fees are added.

Employing a fixed rate, now set at 8-cents in 2022, would knock about $40 off that same bill, but it would still be higher than last December’s bill when both fixed and floating rates were 6.8-cents.

Fixed pricing helps provide some price protection, said Egert, but that doesn’t mean the market price wouldn’t fall below it in some months. Customers who sign up must stay on for at least six months.

Natural gas also saw prices near $5 per gigajoule in the fall – at least twice the long-term average – though it fell to $3.65 in January.

That recent rate is still $1 more than last January’s price, and higher consumption multiplies the effect on bills. The city’s fixed rate for gas in 2022 is $4.35.

Both fixed rates are set on a cost-plus-recovery model that also includes some consideration for average of fixed rates across Alberta, city utility business officials told the News in the fall.

The city has used an averaging system to calculate the default rate since mid-2009.

22
-21