Local utility rates continue their slide into the fall season

By Medicine Hat News on October 2, 2024.

@MedicineHatNews

Floating power prices in Alberta have fallen to near a floor price established by the City of Medicine Hat last fall.

Local power rates are now based on forecast prices in the Alberta wholesale market, but can’t go above 11-cents per kilowatt hour or below 7-cents in an interim pricing model brought in after extreme price spikes last summer.

That broke with long-standing city practice of charging the average of default rates in Alberta, but now those prices have fallen substantially.

For October, regulated rate option prices in the rest of Alberta will average 7.08-cents per kilowatt hour in Alberta for October.

Medicine Hat’s utility department announced new rates for the final quarter of 2024 on Tuesday, and like summer prices, it come in under the minimum price at 4.8-cents per kilowatt.

(The wholesale price is available to contract providers who then mark up profit margin).

Not included in those figures is a rider meant to recover the cost for power providers of a government program to defer some costs to consumers in 2023.

That added about 1-cent to Medicine Hatter’s bill in October, bringing the all-in cost to 8.06-cents, while between 2.4 and 3.5 cents elsewhere in the province this month.

That creates an all-in RRO rates between 9.2-cents and 10.8-cents.

Major retailers Direct, Enmax and Epcor recorded a total of $187 million in lost income during the deferral period and have three more months to collect the final $29.6 million by the end of 2024.

Medicine Hat financed its rate deferral internally, rather than accepting provincial loans which would have put local customers in the provincial repayment pool.

Natural gas prices in the province continue to soften heading towards winter.

Default rates approved by the Alberta Utilities Commission for October are 62.7-cents (Direct) and 71.8-cents (Apex) per gigajoule of natural gas.

Medicine Hat announced its October rate on Tuesday at 76.24-cents based on cost to purchase gas plus a premium. That rate in September was 83.6-cents.

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