Default power rates fall in Medicine Hat for April

By MEDICINE HAT NEWS on April 4, 2023.

https://www.medicinehatnews.com@MedicineHatNews

Power prices are way down in April for those on default rate pricing in Medicine Hat – about half of what they were in February – but with a provincial deferral program now moving into a collection stage, they now match fixed contract rates.

How power and natural gas are charged to city utility users changed at the start of 2023, and about 80 per cent of customers moved to fixed 12-month rate contracts.

But, the remainder remained on default, or Regulated Rate Option, which sees prices reset every month.

For April the city’s base RRO price for power in April will be 15.8-cents per kilowatt hour, but with an additional 1.7-cents added on to recover deferrals from the first three months of the year.

That program kept the price of power 25 to 65 per cent lower during coldest months to start the year, but will be charged back onto RRO bills evenly until December 2024.

Economists and utility analysts have said the provincial legislation requires the total deferred amount (estimated to be between $6 million and $8 million in Medicine Hat) to be collected from the base of customers still on the RRO rate.

That, they argue, creates a loophole in which a customer could move to term contract and avoid the repayment.

The local RRO cost in April, totalling 17.6-cents, is down from an unadjusted rate of 20.1-cents in March and an all-time high of about 32-cents in February.

The city’s new fixed rate offering, published April 1, comes in at 15.8-cents for those who sign on for 12 months. That is down from the previous fixed rate offering of 17.65-cents, and is available at any time during the next three months.

The price of natural gas is also changing. A new default rate for April is set at $3.57 per gigajoule, based on the average of other RRO providers in the province. That is up from $2.54 in March.

The updated fixed rate for natural gas is $4.87, which is down from first-quarter offering of $6.61.

Local variable rate contracts, which follow the Alberta market prices plus a premium, were 19.5-cents for power and $3.97 for gas in March.