Energy Plans & Pricing

On October 16, 2023, City Council passed a new electricity bylaw (Bylaw 4796) to provide consumers with a single best of market interim electricity rate. This new rate automatically took effect on November 1, 2023.

On November 20, 2023, City Council passed a new gas utility bylaw (Bylaw 4798) to provide consumers with a single Market Reference Price natural gas rate. This new rate took effect January 1, 2024. 

The new pricing structure was developed to try and avoid large swings in the market and therefore, reduce price volatility for consumers. Moreover, this decision addresses the apprehensions of ratepayers regarding the previous three rate options (default, fixed and variable) and the desire to make an informed choice without fear of making the "wrong" selection.

• Finding the best market rate for electricity: The City of Medicine Hat sought to reduce rate setting based solely on retail market rates by finding the best electric energy rate of all large retailers that offer one-year contracts.
• Honouring flow-through costs for natural gas: The City of Medicine Hat buys gas to provide to customers. Using a forecast of the estimated natural gas load and the price for the upcoming month, we can 'flow-through' wholesale pricing to our customers.
• Providing stability: Twelve-month forecasting will provide protection from the large price swings seen recently with the average RRO rates.
• Aligning the commodity business to the market: Electricity rates will reset quarterly to avoid prices that are either significantly above or below current market prices. Natural gas rates will reset monthly considering the amount and price of gas the City purchases on the wholesale market to supply customers each month.
• Interim status: This is a short-term solution pending a greater review requested by City Council at the September 5 meeting to conduct an independent (third-party) review of the City of Medicine Hat's energy production business unit.

Yes. On October 16, 2023, City Council voted to impose a low and high cap on electricity prices where the rate is not to exceed a maximum of 11 cents per kWh or go below a minimum rate of seven cents per kWh.

The electricity rate is determined using a twelve-month, volume weighted forecast as per the ICE-NGX wholesale electricity energy market. The set rate will remain in effect for three months and will be recalculated on the first business day of January, April, July, and October.

Furthermore, Council has set a cap where the rate is not to exceed a maximum of 11 cents per kWh or go below a minimum rate of seven cents per kWh. If the calculation results in a rate that falls outside the allowable pricing, the rate will be adjusted accordingly.

Two main objectives are achieved by setting rates in this manner:

1. The rate is expected to beat the one-year contract rate of other large retailers because those retailers reference the same wholesale price, but layer on additional retailer fees and other charges; and,
2. It allows for more stability (fewer price spikes) by forecasting for a twelve-month period (creating an averaging effect), while remaining aligned with market prices because it is adjusted every three months.

Did you know that in most parts of Alberta the regulated rates are reviewed and approved by the Alberta Utilities Commission (AUC) and can change from month to month? Generally, the balance between the energy supply and energy demand determines the market price. 

The natural gas rate is based on wholesale market commodity prices (the weighted average cost of the natural gas purchased for that particular month of consumption) plus $0.07/GJ to recover transactional costs and a small rate of return. Essentially, it is the price we expect to pay for the amount we expect to need. The following month's rate would include any adjustments up or down to account for actual costs incurred. 

The price of wholesale natural gas fluctuates based on supply and demand, the economy, world events, currency exchange rates, and seasonal weather temperatures. It can also be impacted by extreme weather events such as fires, floods and hurricanes.

Electricity rates will change quarterly on the first business day of January, April, July and October.

Natural gas rates will change monthly and include any under or over-recovery from previous months.

No. Effective January 1, 2024, the City of Medicine Hat offers a single interim default rate for natural gas and a single interim default rate for electricity while a third-party review of our energy business is completed. 

Budget Billing is a program where your monthly payments of the total bill are the same amount each month (based on a projection of how much electricity and gas you will consume). Then, once a year, your account is reviewed to determine your actual usage and settled-up to bring your account to zero. On Budget Billing, you can still choose to be on a contract rate or the default rate. This program allows for more predictable monthly budgeting. Learn more on our Budget Billing page.