Council continued to deliberate on the proposed budget for 2023-2024. (Photo Courtesy Gates Guarin)

By Gates Guarin

Changes to utility rate offerings, continued budget deliberations dominate city council meeting

Nov 22, 2022 | 1:08 AM

MEDICINE HAT, AB – Medicine Hat city council had plenty on the agenda, including continued talks on the proposed 2023-2024 city budget.

Prior to council reengaging discussions on the budget, presentations on off-site levies and adjustments to utility rate offerings were heard, the latter of which will be particularly of note for Hatters who go through the city for their utilities.

Travis Tuchscherer, manager of energy marketing and business analysis for the city, laid out proposed changes to the way you would purchase your electricity and natural gas. The changes would come into effect on Jan. 1, 2023, and Tuchscherer says the new model would offer residents more choice and make risk more manageable.

Currently, ratepayers have options of paying for natural gas and electricity through either a default rate or a fixed rate. The contract fixed rate is set annually based on forward market projections and other deregulated retailer offerings with a six-month minimum term which auto-renews at a new yearly price until the customer opts out.

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The new proposal would see three options: Regulated Rate Offering (RRO) or “default” rate, a fixed contract rate and a variable contract rate. Under the default rate, the customer would pay at a new rate each month.

If opting for the fixed contract rate, the price would be reset every quarter instead of every year, with a minimum term jumping from six months to 12. The fixed contract rate would also have to be manually renewed after the 12-month term or be placed on the default rate, rather than the term being auto-renewed.

The new offer of a variable contract rate is calculated monthly, and takes the average of daily market prices for the month of consumption plus either $1/GJ for natural gas or $0.02/kWh for residential customers.

Council questioned and discussed the newly proposed options for a majority of the meeting, with council divided on the proposal’s effectiveness and time frame for communicating the changes to the public.

“We are all owners…and benefit from the business of this business,” Coun. Andy McGrogan said, speaking in favour of the changes. “For that reason, keeping our asset healthy for the time being, I think it’s important when you think of the risk of letting gas prices perhaps, fall for a whole year before resetting the rate just doesn’t seem to make good sense, so we’re looking after our business.”

“I’m all for running this as a business, but it’s not just the people in this room that are the stakeholders, it’s our citizens and our citizens I think are pretty much screaming loud and clear that they can’t take any more increases right now,” says Coun. Shila Sharps, speaking against the changes. “When I look at the fact that we haven’t had consultations, that the rates aren’t in front of us, the revised proposals or the rate review, I think there’s still work to be done.”

After the discussion, several bylaws were voted on, including bylaws 4722 and 4733, which amended the contract options in the gas and electric utility bylaw, with both of these bylaws pertaining to the new proposed utility rate offerings.

Both bylaws 4722 and 4723, in addition to two others, were narrowly passed by a vote of 5-3, with Couns. Sharps, Robins and Hider dissenting on the first two.

Budget Deliberations

With the bylaws now passed, discussions shifted back over to the proposed budget. Deliberations began back on Nov. 16, and council rolled the agenda over to the Nov. 21 meeting.

Presentations from the Medicine Hat Police Service and Medicine Hat Public Library were heard by council.

Interim police chief Allan Murphy provided council with their budget asks, which included capital and major operating expenditures of $485,000 in 2023, and $90,000 in 2024. These figures include an IT storage and server refresh, as well as transition to the latest taser technology. The police ask also calls for an increase of eight total new positions within the service, including the return of a third executive position in the office of the Chief, in-house legal counsel and IT resource. Salary increases of approximately $842,000 and $555,000 in both years compared to the previous budget are proposed, and an increase in expenses of approximately $918,000 and $793,000 respectively, were also outlined in the presentation.

Ken Feser, chief librarian, and Rebecca Harper, library board chair, presented next on behalf of the public library. Feser proposed a half a per cent increase in 2023, an ask of $2,254,500. Feser outlined the 2023 budget was one of “status quo,” as 2023 will be a year of learning and adjusting services as the library adapts to a “new normal.” The proposal says the library will not ask for funding increases until needs are known. Feser cautioned the library does foresee increasing financial need in 2024, but was unable to give an exact amount due to limitations in the Libraries Act.

“I would say our budget, we throw it over a wall most years and something happens on the other side, so we want to use this opportunity to telegraph where we feel like we’re going or what we need in the future,” Feser says.

The budget was still undecided upon by 11 p.m., and the meeting was adjourned. Deliberations will continue at council’s next regular meeting scheduled for Dec. 5.