April 22nd, 2024

Three-month power price falls below minimum mark

By Medicine Hat News on April 2, 2024.

The city's new three-month power rate has fallen below a minimum threshold of 7 cents per kilowatt hour, a far cry from where record prices sat last summer.--NEWS FILE PHOTO

@MedicineHatNews

The price of power in Medicine Hat has hit the floor established last fall as a financial safeguard when the city utility reworked its rate setting to grapple with record high prices.

Six months ago the default power price in the province and city was above 32 cents per kilowatt hour.

The new rate for this spring, set Monday morning, is 8 cents – about 75 per cent lower than default pricing last August, and only about half the contract rate available at the time.

Since October, local officials have based the local blanket power rate for customers in Medicine Hat, Redcliff and parts of Cypress County at the forecast wholesale power rate in Alberta.

That is the price paid by contract retailers for power on the Alberta market, then resold at markup to customers.

The calculation done by City of Medicine Hat officials for the April to June period comes in at 6.6 cents per kilowatt hour – below the 7-cent minimum put in place by city councillors when they amended an administration proposal of capping the price at 11 cents.

As such, the minimum base power price in the Hat is set at 7 cents, plus an add-on fee to recover amounts deferred in the winter 2023 under a provincial cap that requires repayment by the rate class.

The combined price for power is 7.956 cents per kilowatt hour, down from the January to March rate of about 9.3 cents.

Meanwhile, the default RRO rate in the rest of the province rose in ricing announced for April for large retailers.

That average, on which the city based pricing until late 2023, will be 10.8 cents, plus an average repayment fee that brings the combined default rate to 14 cents. The next rate update in Medicine Hat will be July 1.

The price of natural gas is also falling by about 5 per cent in April compared to March.

The rate for the current month will be $1.90 per gigajoule, down from $2.02 in March, based on cost recovery of gas purchased for resale plus a 7 cent per gigajoule premium.

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