Updated Electricity Pricing

ribbon with electricity symbolOn October 16, 2023, City Council voted to pass a new electricity bylaw (Bylaw 4796) to provide consumers with a single best of market interim electricity rate.

As of November 1, 2023 ratepayers in all consumer classes (residential, business, and commercial) will be transferred to this best of market rate. This new rate will not exceed a maximum of 11 cents per KWh or go below a minimum of 7 cents per KWh. 

To view the current best of market rate, visit the default rate page.

What’s required of you?

Nothing! To start receiving this best of market interim rate on November 1, take no action. If we don't hear from you, your contract will be expired. 

The choice remains…

This new best of market interim rate provides a better price option than our existing contract rates. However, choice still remains. If you wish to keep your existing contract, the City of Medicine Hat will honour your contracted rate for the length of time remaining in the contracted period.

To continue with your current contract, a request must be received prior to December 1, 2023 by email at customer_accounts@medicinehat.ca.

Note: All requests to remain on a contracted rate will be valid until the original contract term expires with no opportunity to terminate the contract early.

Frequently asked questions

What do I need to do if I’m currently on a contract?
If you wish to automatically receive the best of market interim rate each quarter, no action is required of you. This rate will be applied by default to all residential and small/medium commercial accounts, regardless of whether a contract is currently in place or not. By taking no action, your contract will automatically expire.
What do I need to do if I was previously on the default (RRO) rate?
 Nothing. The best of wholesale market rate will be applied to your account each quarter.
What do I do if I wish to keep my fixed/variable rate?

The best of market rate cap of 11 cents per KWh is lower than all current contract prices. However, if you wish to keep your existing contract, the City of Medicine Hat will honour your contracted rate for the length of time remaining in the contracted period. A request must be received prior to December 1, 2023 by email at customer_accounts@medicinehat.ca. 

Note: All requests to remain on a contracted rate will be valid until the original contract term expires, there will be no opportunity to terminate the contract early.
How is the new best of market interim rate set?

This single best of market interim rate will be calculated based on a twelve‐month forecast of the wholesale electricity energy market. The set rate will remain in effect for three months with a recalculation occurring at the end of each quarter based on this rate setting methodology.

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.
What about my gas bill?
Currently, natural gas plans will remain unchanged. To enter into a natural gas contract, click here.
Why was Bylaw 4796 drafted to replace Bylaw 2244?
A new pricing structure was developed through Bylaw 4796 in an effort 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 three rate options and the desire to make an informed choice without fear of making the "wrong" selection.
Why is this considered “interim”?
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.
Which factors were considered when changing the bylaw?
  • Finding the best market rate: 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.
  • Providing stability: Twelve-month forecasting will provide protection from the large price swings seen recently with the provincial RRO rate.
  • Aligning the commodity business to the market: Rates will reset quarterly to avoid prices that are either significantly above or below current market prices.
  • 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.

The 2023 utilities discussion 

 Where we're at and where we've been
January 1

New rate contracts for electricity and natural gas were introduced to better align with the market and provide consumers more choice.

Ratepayers were given the choice to stay on the default (RRO) rate, which would be announced at the beginning of each month, or sign a one-year fixed or variable contract with new rates offered quarterly.
September 5
 In response to rising electricity costs, City Council:

Approved a Cost Pressure Relief Program totaling $33.2 M, and approved a recommendation directing staff to:

  1. Deliver a draft utility bylaw amendment for Council’s consideration that establishes interim electricity rates based on ‘best of market’ prices available in the province for the first meeting in October, 2023; and
  2. Convene an independent (third‐party) review of the City of Medicine Hat commodity production (COMCO) business unit to confirm overall strategic approach to ensure best value for the community, with a milestone check-in by December 4, 2023.
September 18 

Cost Pressure Relief payments begin.

$200 per month for the months of August, September, October, and November to be applied to each Residential Utility Account holder.

$500 per month for the months of August, September, October, and November to be applied to each Small/Medium Business Utility
October 3 

City Council gave first reading to Bylaw 4796, a bylaw of the City of Medicine Hat to amend the Electric Utility Bylaw. The amendments include the following:

a) That COMCO sets the interim best market electric energy rates based on a quarterly reset of the wholesale one year forward curve (‘12 month strip’).

b) That all current customers on contracts will be transferred to the new best market default rate, however, the customer would have 30 days after the effective date of the bylaw amendment to revert back to their contract if they choose.

c) This interim best market electric energy default rate approach will be maintained until replaced by decisions informed by the pending COMCO Business Review.
October 16 

Second reading of Bylaw 4796 commenced with a non-statutory public hearing, allowing residents to speak for/against the proposed changes.

City Council approved Bylaw 4796 by giving it second and third reading with the following amendments:

  • That COMCO sets the interim best market electric energy rates based on a quarterly reset of the wholesale one year forward curve.
  • That all current customers on contracts will be transferred to the new best market default rate, however, the customer would have 30 days after the effective date of the bylaw amendment to revert back to their contract if they choose.
  • This interim best market electric energy default rate approach will be maintained until replaced by decisions informed by the pending COMCO business review.
  • That a minimum rate of 7 cents per kWh and a maximum rate of 11 cents per kWh be implemented during the interim period.

Bylaw 4796 will come into force effective November 1, 2023.
November 1 

A single, best of market interim electricity rate is set for all residential and small/medium commercial customer classes.

Rates are set based on a twelve-month (volume weighted) forecast as per the wholesale electricity market with a rate cap of 11 cents per KWh and a rate floor of 7 cents per KWh. 

New rates are announced quarterly. 
December 4 
City Council will hear a progress update on the third-party review of the energy production business unit.