Default rates for power and natural gas in January will either threaten to or go over the caps set by the provincial government.--NEWS FILE PHOTO
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Default natural gas prices in January will come in just under a price cap set up by the provincial government, but a cap on default electricity rates will be in place and likely triggered.
At the same time, a host of changes come to utility bills in Medicine Hat in the new year.
Many customers of the city-owned utility have the ability to lock in this year’s price for electricity and natural gas for the next six months, or decide to sign up for 12 months at new rates posted next month.
But, most local customers and Albertans remain on default pricing known as the regulated rate option (RRO).
This fall, the Government of Alberta instituted a cap on natural gas prices stating a maximum gas charge of $6.50 per gigajoule would help fight general inflation.
On Wednesday, the province announced that the RRO price for gas had been calculated at $6.455 per gigajoule for January, the same month an extension of general power relief provision will see a $75 credit put on most residential single-connection bills.
More recently, the government under incoming premier Danielle Smith passed a measure to limit winter power bills to 13.5-cents per kilowatt for those RRO contracts, with the difference charged back via the customer’s bills spread over the next year.
January’s RRO power price will be determined next week, but it will almost certainly be above the cap. The default price in December was 22.9-cents, and observers expect it to rise again in January.
Throughout the province, RRO rates are reset each month with amounts submitted by distribution companies and approved by the Alberta Utilities Commission.
For a decade, Medicine Hat set its rate at the average of four other rates from major distribution companies, but that will also change after council approved new contract options last month.
In Medicine Hat a new rate-setting formula for gas will determine the default rate as the average value of gas from delivery contracts secured by the city for the previous 120 days.
The default power price will continue to be set as the average of power RRO rates submitted by Enmax, Epcor and Direct Energy.
That rate will be formally announced Jan. 3, and at about the same time the city should release its first fixed rates for power and gas.
Those will be updated quarterly, and would be available throughout the three-month period. The city utility will also offer a variable rate contract for power, with prices tied to movement on the Alberta power grid.
Provincial power relief payments reflected on utility bills will be $75 for January and February, then $25 for March and April.
