Supply and demand a factor in utility rate spike, city says

So what’s the reason?

The City says it all comes down to supply and demand adding January and February are also some of the coldest months of the year.

“Obviously the cold weather has a big impact on usage. Extreme Cold and extreme hot weather has a big impact on utility bills. Obviously in the summer air conditioning and people watering their lawns. I wouldn’t say it is different than any other year,” said Jaret Dickie, manager of utility business support.

More people at home due to the pandemic also contributes to the change in rate, the city said.

“Residential bills will have seen a little bit of a difference because people aren’t working in the office they had to work from home, adjust their thermostat, have their lights on, work on their computer,” Dickie said.

The city has long promoted the Medicine Hat Advantage because the city owns its own utilities. But with so many questioning recent rates, does that advantage still exist?

The mayor said yes.

“ It does, and the irony is when we were talking about selling the generation unit, the number one comment was that we would lose the Medicine Hat advantage,” Clugston said.

Clugston said the rates are determined by averages and part of Medicine Hat Advantage has to do with the fixed costs.

“The thing is it is what every other utility in the province is charging, it’s the average of the utilities so we aren’t charging any more or less than the average, but what we are charging less is on our fixed costs. We have the lowest fixed costs, so the cost of the wire and the pipe is the lowest in the province of Alberta,”he said noting that fixed costs in Medicine hat are $30 to $50 less compared to the rest of the province.

A comparison of utility rates across the province for Feb 2021 (supplied /City of Medicine Hat)

This graph supplied by The City of Medicine Hat shows Medicine Hat had the lowest residential utility rate in February when compared to Lethbridge, Red Deer, Calgary and Edmonton.

Still, for those struggling to pay their bills the city said help is available.

“Customers that are unable to make their utility payments should contact collections in the utility department sooner than later. Collections will give them options that are available to them and early intervention also helps reduce some of the fees that would be charged,” Denise Schmaltz, manager of corporate receivables and systems said.

The city’s utility collection department can be reached at 403-529-8113

Some options for assistance include a deferred payment arrangement, deferral loans, budget billing, and access to The Community Warmth Program.

The city said The Community Warmth Program, which relies on donations, has already helped 67 people this year.

Another option available to residents is a fixed-rate option which takes away the fluctuations that occur month to month.

A minimum six-month sign-up is required.

The 2021 electric fixed rate is $0.0680/kWh. For natural gas, the rate is $3.5000/GJ.

by Tiffany Goodwein

Supply and demand a factor in utility rate spike, city says

Our Community