The City of Medicine Hat Power Plant - Photo by Colton McKee

By Charles Lefebvre

Generating profits

Electricity helping push dividend up for city

Oct 31, 2019 | 3:46 PM

MEDICINE HAT, AB — The City of Medicine Hat is projecting significant profits from its energy department this year.

According to documents presented at the city’s Audit Committee Meeting, the city’s Energy and Utilities division is expecting its dividend to total $42.4 million dollars for the year.

That’s up from the $28 million dollars they originally projected when they were creating the budget,

“We set our original budget up for a certain amount for gas prices and power prices, based on what other power plants use in the province to do their forecast,” said Brian Strandlund, general manager of electric generation with the city. “The gas prices obviously came in a lot less, and the power prices came in a lot more, and we made a lot more money than we originally budgeted for.”

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Strandlund says the prices for electricity and increased demand for electricity in recent months are the main reasons for the increase.

“The first reason why we made a lot of money is because the commodity prices were better than we budgeted,” he said. “The second, biggest one is to be ready and available for when the opportunities arise. Our group has done a lot of great work to have all of our units ready and available during the high peak, high pricing times.”

According to the document, the dividend will be split among three reserve funds for the city. Half of the dividend will go into the City’s Heritage Savings Reserve, while 26 per cent will be transferred to the Tax Rate Stabilization Reserve and the remaining 24 per cent to the Electric Equipment Reserve.