The new single-rate power price is in effect for all City of Medicine Hat customers. Everyone has been switched over automatically.--NEWS FILE PHOTO
cgallant@medicinehatnews.com@CollinGallant
A single power rate is now in effect in Medicine Hat as changes brought about in response to spiking summer power costs came into play Nov. 1.
It’s the first time in nearly 15 years that the city utility company has not charged the average of major Alberta power providers to default-price customers.
And, after vocal opposition this summer, when rates quadrupled for some who navigated the more-recent system of contract pricing, all customers will get one rate unless they actively choose otherwise.
That rate for the remainder of 2023 will be 10.9 cents per kilowatt hour of electricity used by residential and small- to medium-business customers in the Hat, Redcliff and near areas of Cypress County.
It is a decline from the non-contract rate of 18.9 cents in October, a third less than the current contract – all customers automatically over to the new price.
It is almost half of what other Albertans will pay this month on the default rate.
“It’s a huge improvement, but one that we had to really fight for,” said Sou Boss, owner of the Thai Orchid Room who rallied other restaurant owners in protest this summer. Eventually, residents joined in a mass meeting in late August and council called on administrators for relief options the next week. “I think people will be satisfied (with the new rate), but there is will a lot of work to be done, and we’ll see where the (utility model business) review comes in.”
Boss also said her group is still petitioning council to revisit blanket-amount utility credits that she believes were too much in some cases and too little in others.
City council members approved the changes unanimously, with Mayor Linnsie Clark saying the move proves council has addressed immediate concerns while longer-term study is underway.
The credits ($800 for residences, $2,000 for business accounts), the rate change and business-model review were approved last month to address widespread complaints about high power prices that rose above 31 cents in the summer – a point at which most dated 8-cent contracts expired.
A late amendment to the plan approved unanimously by council places a lower and upper limit on price changes of 7 and 11 cents.
The new local rate – based on Alberta energy market wholesale pricing for the next 12 months – comes in just below that top end, including adjustments to recover costs of a default deferral program from last winter.
At that time, the province capped prices at 13.5 cents per kilowatt hour, and the city followed suit, but used internal funds rather than apply for financing from the provincial program.
That was done to insulate local customers from paying potentially higher payback fees (other retailers pool the total cost of the program and recover it from pooled customer base. Local rate changes however, alters how the local deferral costs are collected.
The repayment requirement shifts from default customers to all customers since they are now essentially the default pool.
The added charge for November is 0.9 cents per kilowatt hour, compared to 2 cents on average in the rest of Alberta. That combines with a bare commodity rate of just more than 10 cents for a total of 10.9 cents.
Previously since 2009 the City of Medicine Hat set its local non-contract rate at the average of other major retailers in the province.
Those companies and rates for the coming month are Epcor (Edm.) at 19.57 cents, Epcor (rural) 19.24, Enmax 18.62-cents, and Direct Energy 19.84 cents.
The average would be 19.31 cents, including a portion for repayment of the deferral amount.
The local rate will be updated Jan. 1 based on the whole-price outlook at that time and then every three months until a new formal rate-setting policy is devised, potentially after a third-party review of the city’s commodity businesses is conducted next year.
Natural Gas
Gas rates for city customers without a contract continued to follow the averaging formula and will fall slightly to $2.50 per gigajoule this month, but early budget discussions at city hall propose a system near to the electricity rate be adopted for 2024.
The current fixed-rate contract offering is $3.95 per gigajoule for a 12-month term, which administrators say includes the winter heating season when rates typically rise.
