By Charles Lefebvre

Don’t be shocked: Province caps electricity prices for April in Medicine Hat

Apr 2, 2018 | 3:28 PM

MEDICINE HAT, AB — Medicine Hat residents will be paying more for electricity this month.

The city released its utilities rates for the month of April, revealing that the rate for the month of April is 8.2 cents per kilowatt hour, nearly double from March’s rate of 4.7 cents per kilowatt hour.

“The main driver is the retirement of two coal units – the mothballing by Transalta,” said Jaret Dickie, manager of utilities business support with the city, referring to plants near Edmonton. “Also, there’s other coal and gas outages that are occurring in April that are impacting the price.”

April tends to be a “shoulder season” where electricity demand is lower, say Dickie, who adds many plants and generators undergo maintenance during the month due to heavy loads in the winter and summer.

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Last year, the province and Medicine Hat signed a deal to put a cap in place on electricity prices, meaning residents will only be paying 6.8 cents per kilowatt hour. It’s the same agreement offered to other communities on the regulated rate option in the province.

Electricity rates in Medicine Hat are calculated based on the average of the regulated rates approved by the province’s utilities commission.

April is the first time the city has had to put the cap in place, and Dickie says it was something the city was predicting to happen at some point this year. He adds residents will likely be surprised when they open up their utility bill for the month.

“We’ve enjoyed some fairly low power prices over the last two years, so seeing a price of 6.8 cents is going to be a bit of a shock for some people,” he said.

Despite the increase, Dickie says he expects electricity rates to return to average levels in Medicine Hat next month.

“I think it will normalize,” he said. “I think April is an exception. We are looking at potentially another month that will hit the price cap again, but typically it’s going to be below the 6.8 cents.”

Dickie says the cap could be brought back in July or August, based on Alberta Energy forecasts, but notes the remaining months are in the “4 to 5 cents range” the city has seen over the past several years.

The province will pay Medicine Hat the difference between the actual price and the cap at the end of the month.