In budget discussions last month, administrators stated that updated distribution rates for 2024 did not include a change to commodity rates charge on power and gas usage. - NEWS FILE PHOTO
@MedicineHatNews
Power rates will change today for the next three months in Medicine Hat, but the formula used to determine the local electricity price will remain unchanged until city council and power plant staff further review a late-year business review.
That’s as a new full-year “Rate of Last Resort” comes into effect in the rest of Alberta, though at a price nearly double the city’s offering to local customers.
In budget discussions last month, administrators stated that updated distribution rates for 2024 did not include a change to commodity rates charge on power and gas usage.
A review of city energy production business in early December suggested a rate-review committee be struck to set and certify rates in the future.
The power price in the Hat, Redcliff and portions of Cypress County is currently based on the wholesale power price forecast across the province. That interim rate formula was set in late 2023 with an upper and lower limit following price spikes that year.
The new rate, expected today, will remain in place for the next three months, and last year replaced an averaging system that was used in Medicine Hat for more than 10 years.
On January 1, the “Rate of Last Resort” came into effect in parts of Alberta outside of Medicine Hat. The renamed “regulated rate option” for customers without a contract would pay about 12-cents per kilowatt hour for all of 2025 from Enmax, Epcor and Direct Energy.
The Medicine Hat rate has sat at the lower-limit of 7-cents per kilowatt hour since last summer while the actual market price has fallen below that level.
Natural gas rates are set monthly based on the cost of procurement.
As well, in 2025, the federal levy of carbon applied to natural gas use will increase on April 1, from $3.33 per gigajoule currently to $4.10, as the cost per tonne increases from $65 to $80 as scheduled.
In Alberta, carbon compliance costs do not appear on customer power bills but are paid by generators. Sask Power estimated the increased rates would raise costs by 2.9 per cent in that province.
