By Chris Brown

After omission found, city reverting to 2022 pricing method for natural gas

Feb 28, 2023 | 1:43 PM

MEDICINE HAT, AB – The City of Medicine Hat is cancelling its method for calculating the default natural gas rate months after it was adopted.

Customers on the default regulated rate will see an adjustment on their April utility bill.

City staff have discovered the omission of a clause to amend the methodology for calculating the default rate for natural gas in Bylaw #4722 to amend the Gas Utility Bylaw #2489 when it was presented and adopted late last year. The omission negates the change to calculate the default regulated rate for natural gas on a weighted 120-day buying window, and calculations will revert to the average of the monthly gas charges set by default supply providers.

According to the city, the January default natural gas rate will be adjusted from $6.117 per gigajoule to $6.426. The February rate will be adjusted from $5.218 per GJ to $3.446. It amounts to a net credit of $484,537 among all customers on the default rate, but not everyone will see a significant credit because of their personal consumption and billing cycle.

In a news release, Travis Tuchscherer, manager of Energy Marketing and Business Analysis, explains the intended change offered an opportunity to better manage risk by tying it to local fuel purchasing costs instead of third-party benchmarks.

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He says “the former methodology was a reasonable pricing strategy that was supported by staff and council for more than a decade and we are comfortable moving forward with the status quo until another bylaw amendment can be raised.”

The city says the default natural gas rate for March, to be released on March 1, and onward will be calculated from the average of the monthly gas charges set by default supply providers, as defined in the Gas Utilities Act, RSA 2000, Chapter G-5.

Rochelle Pancoast, the city’s managing director of strategic management and analysis says the error is unfortunate and they will learn from it. She adds she’s hopeful the community will extend grace to public servants for the accidental omission.