April 16th, 2024

Power price goes up, but vast majority on city’s fixed rate

By MEDICINE HAT NEWS on February 2, 2023.

Power rates continue to climb to towering heights but roughly four out of every five City of Medicine Hat customers are locked into a less expensive fixed rate.--NEWS FILE PHOTO

https://www.medicinehatnews.com@MedicineHatNews

Monthly power rates rose and gas rates fell as predicted for Medicine Hat in February, but fewer residents than ever are affected by the monthly reset.

That’s a month after the city’s utility department brought in new contract options during a record run-up for electricity and recent highs for gas, and a rush to renew at 2022 prices for the first half of this year.

Four out of five city power customers have a fixed-rate contract, mostly at 2022’s rate of 8 cents per kilowatt hour. That share is up from half last summer.

Those without a contract will be charged a record high price of 31.94 cents as the regulated rate option, or default price, which was recalculated for February and published on Wednesday.

All but 13.5 cents per kWh, however, will be deferred via a provincial government program, then staggered onto bills between April and the end of 2024.

That could make it more attractive to some than the city’s 2023 fixed-rate offering of 17.7 cents, which will be reset and available April 1 to default customers.

Power prices across the province, which determine the local default price, also continued to set record pace. They ranged from 29.7 cents from Enmax to 32.9 cents for Epcor’s Edmonton area customers for February.

A third local contract option is a 12-month variable rate that charges the month’s average on the Alberta market, plus a 2-cent premium.

That is determined at month’s end and was 14.6-cents for January. The similar formula for large commercial customers deals with the month ahead forecast and is about 32 cents this month.

Local natural gas prices mirrored falling rates across Alberta, but lagged locally, as Medicine Hat now considers actual contract rates it pays for gas, but weighted over the previous 120 days when it secures delivery prices.

That default rate for gas is $5.22 per gigajoule, down almost 90 cents from January and less than the 2023 fixed rate of $6.61.

Some customers were able to renew last December for six months at the 2022 fixed price of $4.35.

The variable contract rate for gas is $4.54 per gigajoule, suggesting a market actual of $3.54 plus the $1 city premium. That contract recalculates prices monthly but is attached to a 12-month term, similar to power.

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