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By Regan Tate

Natural gas and electricity rates will be higher in December

Dec 1, 2022 | 10:39 AM

MEDICINE HAT, AB – Natural gas and electricity rates are increasing for the month of December.

The City has just released the December rates for energy commodities. Natural gas is $6.1540 per gigajoule (GJ), up from the previous month of $5.5070 per GJ.

The electricity rate of $0.22990 per kilowatt hour, up from the previous month of $0.17734 per kilowatt hour.

Customers do have the option of getting a fixed rate. The fixed rate for 2022 is $0.0800 per kilowatt hour and for natural gas it is $4.35 per GJ.

City council recently approved a change to energy pricing plans that will be offered to utility customers in 2023.

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The change is being made because the city says the fixed rate program was intended to provide predictability by allowing residents to lock in at the same fixed commodity rate each month rather than the current market rate.

The City says the fixed rate for 2022 did not anticipate the significant market price increases that occurred and it was not able to adjust the fixed rate offering. This resulted in many utility bills being subsidized as the actual cost of providing energy to customers was higher than the fixed rate being charged.

There will now be three options for electricity and gas rates instead of two:

The Regulated Rate Offering (RRO) – This is the default option and is a market-based rate calculated monthly though the calculation methodology differs between electricity and gas:

1. Electricity is calculated based on the average monthly price of Alberta’s regulated providers.
2. Natural Gas is calculated based on the weighted average 120-day buying window price for the forecasted volume
3. Customers who do not sign on for a contract option will default to the RRO. Customers who stay with this default option should expect the electric and gas rates to fluctuate each month

Fixed Contract Rate – The fixed contract rate allows customers to sign up for a fixed rate for a 12-month term (gas or electricity or both).

The posted rate for this option will change every three months.

If you sign on for a contract rate, you will sign on for a 12-month contract at the rate that is in effect for that three-month period. Customers who choose this option will be charged at the same rate each month but will see variations on their bill due to changes in their consumption.

The contract terminates if you change your service location (move). Also, unlike the previous fixed rate program, you must renew your contract at the end of your 12-month term.

You can select a new contract option by contacting Customer Service by phone or using the online form.

Variable Contract Rate – The variable contract rate allows customers to sign up for a 12-month term where each month, you are charged an average of daily prices for the month, plus $1/GJ (gas) or $0.02/kWh (electricity).

Customers who choose this option will be locked into the pricing methodology for 12 months, but each month of the contract will have a different price. The contract terminates if you change your service location (move).

Also, unlike the previous fixed rate program, you must renew your contract at the end of your 12-month term. You can re-sign on to a contract option by contacting Customer Service by phone or using the online form.