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By Chris Brown

New city energy pricing plans take effect Jan. 1

Dec 5, 2022 | 3:45 PM

MEDICINE HAT, AB – City of Medicine Hat utility customers will have more billing options next year under the new electricity and natural gas pricing plans.

The new rates plan, approved by city council on Nov. 21, takes effect on Jan. 1, 2023 and customers will have three options.

Under the regulated (default) rate customers are charged the default regulated rate set at the beginning of each month. The rate for natural gas is now calculated based on the weighted average 120-day buying window price the city pays for the forecasted volume of natural gas used in the Medicine Hat market area, the city explains in a news release. The City of Medicine Hat continues to calculate the monthly electricity rate based on the average of the rates using the four Regulated Rate Option providers approved by the Alberta Utilities Commission under section 103(2) of the Electric Utilities Act.

The fixed contract rate allows customers to sign up for a fixed commodity rate for a 12-month term (gas, electricity or both) at any time of the year. The rate offered for this option will change every three months, meaning there will be four different rates “for sale” throughout the year and announced quarterly, says the city. For instance, a customer could choose not to sign on in the first quarter (January to March), and instead wait to see what the second quarter (April to June) rate is and sign up then. They would keep that price for the following 12 months at which time the contract will expire and the customer must decide from one of the three options again.

Travis Tuchscherer, manager of energy marketing and business analysis, says the misconception that the rate will change every three months is not true.

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“When you sign a contract, you pay that same price for 12 full months. However, the price you are offered when you sign up, might be different than the price another customer is offered if they sign up three or six or nine months down the road,” he says.

The City of Medicine Hat’s former fixed rate program offered a set price that was updated annually and in effect for a calendar year on contracts that auto-renewed. That program will terminate on Dec. 31

Current fixed rate subscribers who are past their initial six-month commitment can contact customer care at 403-529-8111 or fill out the form at medicinehat.ca/fixedrate to start a new six-month term on the former program. Those who do not renew will return to the default monthly rate (Regulated Rate Option) in January or may choose to select one of the new options.

A variable contract rate option is being introduced for 2023. Customers on that option sign up for a 12-month contract where each month, the customer is charged an average of the actual daily commodity prices for the month, plus a premium. For next year, the premium is $1 per gigajoule for natural gas and $0.02 per kilowatt hour for electricity. This rate is set on the first day of the following month and each month will have a different price, the city says.

Both the fixed and variable contracts terminate after 12 months at which time the customer will automatically pay the default rate or has the option to sign on to a new contract. The contracts also terminate if the customer moves. When starting a contract, it is effective the next billing cycle.

Customers can review all the new options at medicinehat.ca/energyplans. The new fixed rate offering and the January regulated rate for both electricity and natural gas will be announced Jan. 1, 2023. Note the first business day of 2023 is Jan. 3.

The overall new rates plan is also intended to better align City of Medicine Hat’s plan offers to those available elsewhere in the province, and manage risk to protect the city’s historical and current investment in commodity production assets (referred to as COMCO) by ensuring commodity rates are closely aligned with market prices.

There will also be three electricity offerings for large commercial customers and industrial customers in the new year – regulated rate (default); energy supply price (ESP) contract; and variable contract

As well, the city is looking forward to examining “green” energy options as a viable addition in the future.

“Medicine Hat is unique in that the city is the sole retailer for providing electricity in the area. We operate under a provincial regulatory exemption that recognizes our historical self-sufficiency by allowing us to continue the supply, distribution and sale of electricity in our area,” said Rochelle Pancoast, managing director of strategic management and analysis for the city. “Because our customers don’t get to ‘shop around’ so to speak, offering more choice in pricing options helps them have more control over their spending and risk preference.”

The Utilities Consumer Advocate educates and advocates for Alberta’s small business, farm and residential electricity and natural gas consumers and provides a useful web resource to learn more about the energy market in Alberta.

The new offers are available starting Jan. 3, 2023, the first business day of the new year. Customers will be able to sign up online in January at medicinehat.ca/energyplans, at City Hall or through customer care at 403-529-8111 or customer_accounts@medicinehat.ca.