City crews repair a broken power pole in this April 2021 file photo.--News File Photo
@MedicineHatNews
Even current cold weather is not helping boost power and natural prices in Alberta, City of Medicine Hat utility officials told a committee meeting this month.
Despite frigid temperatures to start February, the year-to-date price on the Alberta grid is an average of $30.53 per megawatt – about one-tenth what it was in the record setting summer of 2023, and about half the long-term multi-year average.
The city’s power division, which earns export revenue putting electricity on the system during high-priced periods, is only expecting that to rise to about $45 over the course of the year, and then to only $50 in 2026.
“The market has shifted to a surplus position,” said Travis Tuchscherer, the city division’s director of energy marketing and business analysis.
Market watchers have credited new renewable supply and the reintroduction of former coal-fired power plants now running on natural gas as the reason behind lower prices that are driven by higher supply.
At the same time, the current natural gas market price is $1.71 per gigajoule, Tuchscherer told council’s energy, environment and land committee on Feb. 6.
City forecasters predict a rise to $2.72 in 2026.
ATB released analysis on Monday stating that the 2024 average price of $1.44 was 45 per cent lower than the 10 year average due to higher production and therefore higher storage levels.
Two factors in favour of higher prices going forward are gas use in power production as the province pushes to draw high-tech computing investments, as well as west coast LNG export terminals that are expected to be online this year.
The city charges local customers a rate for gas based on the cost of purchasing supply off the Alberta system plus a premium of seven cents.
The local power price is set at the wholesale average of power on the Alberta grid available to utility marketers between a floor and ceiling of 7 to 11 cents per kilowatt hour, equal to $70 to $110 per megawatt hour.
