About 100 members of the public attended a public hearing Monday as city council considered adopting an interim single rate for power until a larger business review of the power plant can be done next year.--NEWS PHOTO COLLIN GALLANT
cgallant@medicinehatnews.com@CollinGallant
City council has approved a single-rate power price after a summer of discontent over high bills – a price staffers say will be the best in the province available to residential or small business customers.
But that was challenged for almost three hours at a public hearing Monday night by Hatters calling for even lower prices, information on costs and for the city to adopt a policy to charge costs plus a small return.
City staff said such a drastic change would have major implications on the entire city budget, and a potential cost-plus would be studied in a coming overarching review of the power plant business.
Council approved by a 9-0 margin the interim rate, but likely lower than the October price, much less than summer prices and capped to go no higher then 11-cents per kilowatt hour and no lower than 7-cents.
“I’m in favour of doing something right now while we’re doing a further review,” said Mayor Linnsie Clark, who answered presenters who called for the rate to be defeated. “This (utility) is our advantage and we have to maximize that for our community.”
More than 100 Hatters attended the meeting, with presentations often challenging staff on operational and financial workings and intentions.
“The current business philosophy is forcing the residents to live in poverty,” said Nicole Frey, an organizer with a group calling for a cost-plus model as well as a mayoral recall.
She said the city has made much more than profit targets over the last four years and they should be ashamed considering Hatters are struggling.
“How do we trust council to do what’s best for the community when they haven’t?” she asked. “Where’s the accountability?”
Others called for the city to put the price against other retailers in the province and allow greater competition in the city by ending its protected franchise area.
Hatter Alex McCuaig was one of few Hatters to speak in favour of the changes, which he called “reasonable,” but he still admonished elected officials.
“It’s a good interim solution, but it took way too long to get here,” said McQuaig, a former reporter with the News who now works for another publication. “This came up in July and council didn’t read the room. My fear is that because you took so long, (opponents) now want to give away our franchise.”
Councillors defended administrators during debate on the motion, with many promising substantial work on the utility review.
“They’ve faced a lot of attacks for doing something we’ve told them to do, and what previous councils have asked them to do,” said Coun. Ramona Robbins. “People talk about an evil monopoly but it’s not factual. We live in a great city that’s propped up by the utility … and people want to smash it.”
Coun. Darren Hirsch said the power business has become much more volatile, a review is needed and citizens need to be engaged.
“We’re in a new world and we’re all trying to wrap our heads around it,” said Hirsch. “I hear customers want simplicity and the best rate, and I think council and staff should be held to that … We’ll have to figure it out to reinstate trust.”
New rate formula
The change comes nine months after a major overhaul of contract offerings for 2023, ushering in longer-term contracts.
The switchover allowed most to extend 2022 contracts until June, at which point rates had risen alongside the record-breaking Alberta market to double or quadruple.
That, along with forecasts of a record $134-million power dividend to city coffers, led to widespread calls for relief and a change to rate setting that for 14 years had been linked to provincial price averages.
Council allocated $33 million in credits for local bills this fall following protest meetings, and ordered for the new rate and business study.
Pancoast said the approach is better than linking to current major retailer contract offers, as they are above the wholesale rate.
As well, she said, public feedback made them leery about offering long-term contracts, but the monthly setting also had drawbacks.
“It’s hard for customers during high-priced months only to be swung into lower-price months,” said Rochelle Pancoast, head of utility division, who said a price based on other contracts was already higher than local prices.
“This is the single best rate for our residential and small business customers,” she said.
The interim rate would be readjusted every three months based on new outlooks. The current trend suggests a November price at 10 to 11 cents per kilowatt hour until year end (the summer contract price was nearly 17 cents). If trends continue forward, rates in early 2024 would fall to 9 to 10 cents, then lower next spring.
“We see it as the best balanced approach … until we have the homework done and we can look at a more permanent (rate) design,” said Pancoast.
Two speakers – developer Gary Procter and restaurant owner Sounantha Boss – told council they should defeat the bylaw and direct a cost-plus-reasonable return be developed or they should open up the city grid to competition.
“If they’re (confident) it’s the best rates, why don’t they open the flood gates and allow in (private retailers) and they won’t lose a single customer,” said Procter. “There’s a lot of unhappy people here.”
Sounantha Boss said her group believes the bare cost of power production is about 6.6 cents per kilowatt hour. (Administrators say the business is to too fluid to predict costs before hand, which would be needed to create a rate for the month ahead).
Boss said the change would promote business attraction, and why delay that move.
“At the same time the ratepayers of Medicine Hat and areas are struggling with rising costs,” she said.
“Sales to the grid will continue to be large and there’s no need to have high (local) rates.”
[Editor’s Note– This version of the article corrects the maximum price cap figure to 11-cents per kilowatt hour of electricity, rather than 12-cents as was initially reported.]
