Peaking utility prices likely to slow, city official says
By MEDICINE HAT NEWS on July 12, 2022.
https://www.medicinehatnews.com@MedicineHatNews Power and natural gas prices could level off and return to more normal market by year end, the head of city’s utility division said Thursday, Division head Brad Maynes told council’s utility and infrastructure committee on July 7 that after commodity prices for power and natural gas shot up late last fall, calmer markets are now predicted much sooner. “It’s quite different than what we saw a few months ago,” said Maynes. “The electricity price will lag a bit.” Both rates for consumers are now at 10-year highs in July with default rate for gas averaging $9.09 per gigajoule and power at 14.8-cents. The issue of commodity rates arose as committee was updated on the now fully operational Unit 17 power plant expansion. It provides a 20 per cent increase to the city’s generation capacity, which will be used to boost export sales onto the Alberta grid which has so far this year seen record pricing. Trading volatility caused by fears of a recession saw the gas price moderate over the past few weeks. “It’s good to have the power capability to sell into the market, but one of the reasons we’re seeing higher prices (on the grid) is supply – post-COVID (demand) has rebounded but hasn’t yet met pre-COVID demand,” said Maynes, noting about three quarters of the province’s generation capacity is fuelled by natural gas. “When we have $8 or $9 natural gas in the province, it’s going to affect the price of electricity.” Gas purchases by utility retailers in Alberta are now priced in the low $5 range, where $7 had been predicted well into 2023. Maynes said the consensus forecast is for gas to settle in the $5 range by late in the year. 12-11
