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By Regan Tate

City admits error in information shared during public hearing on utility rates

Oct 24, 2023 | 3:02 PM

Medicine Hat, AB–The City of Medicine Hat is correcting information about Medicine Hat’s electricity generation volumes.

Managing Director of Energy, Land and Environment Rochelle Pancoast issued a statement on Tuesday to correct inaccurate information that was shared at the recent public hearing on utility rates.

“At the public hearing, I shared messaging that the City of Medicine Hat considered volume metrics related to Medicine Hat’s electricity business confidential and would therefore not be released to the public. At the time I made this comment, my team and I were unaware that total volume data is publicly available through a partner organization. I recognize that this unintended discrepancy may have caused confusion, misunderstanding, or concern and, as such, I wish to extend my sincere apologies for anyone that may have been impacted.

“We provide an annual report of volume statistics to our regulator, the Alberta Utility Commissioner (AUC), but the AUC has indicated that the data is only used in an aggregated form (together with other market participant data), specifically to protect individual entity data. On the other hand, since the public hearing occurred, we learned that the Alberta Electricity System Operator (AESO) does publish City of Medicine Hat volume data. We did not anticipate that the data would exist since similar data shared with the AUC is confidential and we did not create a report with that information for the AESO.

Because we don’t naturally have the need to look outside the City for this data, we missed an area on the AESO website where it is reported. We have since verified with the AESO that they capture hourly, moment-in-time data from the City’s real-time production feeds. From that information, they unilaterally create total volume reports. We were unaware this information was being assembled and published, as our earlier due diligence related to a Freedom of Information Request failed to discover the reports.

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“I acknowledge that my inaccurate messaging may have unintentionally eroded the trust residents and stakeholders place in our organization. While errors do happen, I recognize the heightened attention that this topic has within our community, and I wanted to personally ensure that my message was appropriately corrected in a similarly public way.

“The availability of City production data, together with the City’s financial reports will allow an approximate average unit cost calculation, however, I will continue to caution that average cost per kilowatt-hour (kWh) is not representative of a typical cost-based approach. Rather, each customer class (residential, commercial, industrial, etc.) has different factors that impact the more meaningful class-specific unit cost. Capital and operating costs, together with variable costs (fuel and carbon costs) are allocated across customer classes and those costs are further impacted by factors including customer class-specific consumption (volume) levels and consumption shape (hourly, seasonal), class-specific risk premiums, provincial grid sales and purchases, and more. Applying a simple average across these classes is misleading, and we maintain the view that accurate unit cost information is commercially sensitive. That view will be revisited if the Council endorsed business philosophy revisit results in a preference for a cost-plus approach.

“There are inherent challenges when a public entity like the City of Medicine Hat operates a for-profit enterprise, particularly in such a complex field. A for-profit business often deals with confidential or proprietary information that must be protected for competitive reasons, and this aspect can be difficult to balance with public expectations of transparency. However, I accept responsibility for making statements about the confidentiality of volume data that I have since learned were untrue, and I sincerely apologize to those who were frustrated with my inaccurate response. Please rest assured of my commitment to uphold the highest standards of accuracy and professionalism.”