Energy Plans and Pricing

In 2024, residential, small/medium business and farm customers enjoy the simplicity of a single interim rate for each: electricity and natural gas.

The interim pricing strategy will be in place through 2024. The electricity rate is based on 'best-in-market' wholesale pricing. The City's weighted average cost to buy natural gas establishes the natural gas rate.

We expect the results of a third-party evaluation of the City's energy business by the end of the year. Outcomes from the review will inform future decision-making about energy pricing models and more.

Default rates

Photo of a hand plugging a black cord into a wall socket
Current Electricity Rate

$0.08024 / kWh

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For residential, farm, small and medium commercial, unmetered and rental lighting customer classes:

  • the rate is updated quarterly
  • capped at min $0.07 and max $0.11 per kWh
  • recovery rate is added monthly (read more below)
  • no contract required - this is the default rate

Large Commercial, Industrial and Street Lighting electricity customers, see below.

Closeup of a natural gas burner on a stove
Current Natural Gas Rate

$1.5380 / GJ

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For all customer classes:

  • the natural gas rate changes monthly
  • announced at the beginning of each month
  • no contract required - this is the default rate

All customers were transferred to this default rate as of January 1, 2024.

Going Green Charge

Customers also have a “Going Green” surcharge on their bill. This surcharge is calculated monthly to recover costs incurred to purchase renewable energy for residential, farm, small and medium commercial customers.

The Going Green surcharge is $0.0030 per kilowatt hour.

Frequently asked questions

Why is there only one rate option for electricity and one for natural gas? 

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.

Which factors were considered when changing the bylaw?
  • 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.
Why is this considered "interim"?
This is a short-term solution pending a greater review requested by City Council at the September 5, 2023 meeting to conduct an independent (third-party) review of the City of Medicine Hat's energy production business unit.
Is there a rate cap?
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.

Note that the Recovery Rate may cause the final price charged for electricity to exceed 11 cents.

How is the electricity rate calculated? 

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.

A Recovery Rate is currently added to the calculated electricity price as part of the recovery from the Government of Alberta temporary price protection. See below.

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. 

How is the natural gas rate calculated?

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.

What is the recovery rate? 

Icons of an electricity plug and natural gas flame with the Government of Alberta logoOn December 15, 2022, as part of its Affordability Action Plan, the Government of Alberta passed the Regulated Rate Option Stability Act through Bill 2: Inflation Relief Statues Amendment Act. This regulation mandates that regulated rate option (RRO) providers in Alberta must implement the regulated rate cap program by enforcing a temporary price ceiling in January, February and March 2023. Find more information here: https://www.alberta.ca/enabling-energy-rebates.aspx 

 

As of April 2023, the cost difference between the actual RRO electricity rate from January to March and the $0.13500/kWh cap will be recovered through the addition of a Recovery Rate to the monthly default rate over a 21-month recovery period from April 1, 2023 to December 31, 2024.

 

Since the recovery rate changes monthly as more and more of the deferred amount is recovered, the final electricity rate looks like it changes each month even though the base rate is calculated every quarter.

The recovery rate is included in the price of your "Energy Charge" on your utility bill. For details, refer to the price charts under "Historical Rates" below.

How often will rates change?

Electricity rates will change quarterly on the first business day of January, April, July and October. Note: the recovery rate that is added to electricity will make it appear as if the rate changes monthly, but the base rate is the same for the entire quarter.

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

Can I sign a contract for fixed pricing? 
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. 
What if I recently signed a contract for fixed pricing?

Customers on a fixed or variable contract for electricity were automatically transferred to the best-of-market default rate on November 1, 2023.

Customers on a fixed or variable contract for natural gas were automatically transferred to the single interim default rate on January 1, 2024. 

New fixed and variable contracts are no longer available.

I elected to remain on my fixed or variable contract before the deadline. What happens when it expires?

Whether for natural gas or electricity (or both), you will be transferred to the single interim rate when your contract expires.

What is budget billing? 
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
More about the 2023 utilities discussion
Where we're at and where we've  been 
 
January 1, 2023 

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, 2023 
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, 2023 

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, 2023 

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, 2023 

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, 2023 

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.  

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 based on the weighted average cost of the natural gas purchased for that particular month of consumption.
December 4, 2023 
Council heard a progress update on the third-party review of the energy production business unit that the RFP closes before Christmas and a provider is expected to begin work in the new year.
January 1, 2024 
All natural gas contracts expire and customers are transferred to the single interim default natural gas rate.

 

Utility Rates 

Your utility bill includes both utility charges and energy charges.

Utility Rates (water, sewer, solid waste)Set once a year for the entire year, and include all the other line items on your utility bill.

Energy Rates (electricity and natural gas): Depending on the rate option, these rates change either quarterly or monthly and are specific to the Electric Energy and Gas Commodity line of your utility bill.

Current Utility Rates    Current Energy Rates

 Utility and Energy Rate Archive

Large Commercial, Industrial and Street Lighting customers

The default electricity rate for Large Commercial, Industrial and Street Lighting customers is based on the average of the rates for owners whose regulated rate tariffs are approved by the Alberta Utilities Commission under section 103(2) of the Electric Utilities Act for that calendar month as posted by the Alberta Utilities Commission on its internet page under Regulated Rate Option Regulation.

for Large Commercial, Industrial and Street Lighting customersElectricity (per kWh)
May 2024 $0.07192/kWh
Past six months  
April 2024 $0.10904/kWh
March 2024 $0.10339/kWh
February 2024 $0.15317/kWh
January 2024 $0.16897/kWh
December 2023 $0.18310/kWh
November 2023 $0.17076/kWh 

Historical pricing

Historical default rates

 

Historical default rates
for Residential, Farm,
Small and Medium Commercial,
Unmetered Services and Rental
Lighting customers
Electricity (per kWh)Natural Gas (per GJ)
April 2024 $0.07956/kWh
($0.0700 + Recovery Rate $0.00956)
$1.9008/GJ
March 2024 $0.09302/kWh
($0.0842 + Recovery Rate $0.00882)
$2.0239/GJ
February 2024 $0.09234/kWh 
($0.0842 + Recovery Rate $0.00814)
$2.494/GJ
January 2024  $0.09232/kWh 
($0.0842 + Recovery Rate $0.00812)
$1.9506/GJ

Change to natural gas rate methodology: Until December 31, 2023, the default natural gas rate was based on the average of the monthly gas charges set by Alberta gas distribution (pipes) owners. The City of Medicine Hat calculates the Monthly Reference Price based on the average of the rates approved by the Alberta Utilities Commission.

Effective January 1, 2024, the default natural gas rate is based on the weighted average cost of the City’s natural gas purchases for the month of consumption, plus $0.07/GJ to recover transactional costs and a small rate of return.  

December 2023

$0.10875/kWh
($0.10031 + Recovery Rate $0.00844)

$2.827/GJ
November 2023

$0.10900/kWh
($0.10031 + Recovery Rate $0.00869)

$2.784/GJ

Change to electricity rate methodology: Prior to November 1, 2023 the default rate was calculated based on the average of the rates for owners whose regulated rate tariffs are approved by the Alberta Utilities Commission under section 103(2) of the Electric Utilities Act for that calendar month as posted by the Alberta Utilities Commission on its internet page under Regulated Rate Option Regulation.

From November 1, 2023 onwards, the default rate is calculated based on a twelve‐month forecast of the wholesale electricity energy market. The base rate is updated quarterly while the recovery rate changes monthly.

October 2023

$0.18930/kWh
($0.17293 + Recovery Rate $0.01637)

$2.495/GJ
September 2023

$0.26283/kWh

($0.25068 + Recovery Rate $0.01215)

$2.849/GJ 
August 2023

$0.30506/kWh

($0.29673 + Recovery Rate $0.00833)

$3.215/GJ 
July 2023

$0.25815/kWh

($0.24924 + Recovery Rate $0.00891)

$2.448/GJ 
Historical fixed contract rates
Historical fixed contract rates
ElectricityNatural Gas
October 2023: $0.11686/kWh October 2023: $3.950/GJ
July 2023: $0.16944/kWh July 2023: $4.226/GJ
April 2023: $0.15793/kWh April 2023: $4.866/GJ
January 2023: $0.17653/kWh January 2023: $6.607/GJ

Fixed contracts are no longer offered as of January 1, 2024.

Historical variable contract rates

Variable contract rates were determined at the end of each month from the actual daily market rates that month, plus a balancing premium. 

Historical variable contract rates
for Residential, Farm,
Small and Medium Commercial,
Unmetered Services and Rental
Lighting customers 
Electricity
(rate INCLUDES
balancing premium)
Natural Gas
(rate INCLUDES
balancing premium)
December 2023 n/a (see default rate) $2.783/GJ 
November 2023 n/a (see default rate) $3.498/GJ
October 2023 $0.11934/kWh  $3.269/GJ 
September 2023 $0.13174/kWh $3.434/GJ
August 2023 $0.20680/kWh  $3.596/GJ 
July 2023 $0.17500/kWh $3.354/GJ
June 2023 $0.20441/kWh $3.308/GJ
May 2023 $0.17285/kWh $3.287/GJ
April 2023 $0.16234/kWh $3.372/GJ
March 2023 $0.19463/kWh $3.971/GJ
February 2023 $0.14350/kWh $3.646/GJ
January 2023 $0.14613/kWh $4.536/GJ

Variable contracts are no longer offered as of January 1, 2024.