Council approves best of market interim electricity rate through new bylaw

Medicine Hat – At the regular City Council meeting on Monday, October 16, 2023, Council gave second and third reading to Bylaw No. 4796, amending Electric Utility Bylaw No. 2244. Effective November 1, 2023, this new bylaw will bring into force a single best of market interim electricity rate, not to exceed a maximum rate of 11 cents per KWh or a minimum rate of 7 cents per KWh, charged to all residential, small business, and commercial customers.

In an effort to create price stability for consumers, the City of Medicine Hat has shifted away from rate setting based solely on provincial retail market prices toward a pricing methodology that will see rates calculated based on a twelve‐month forecast of the wholesale electricity energy market.

“This new wholesale market rate is expected to be more competitive than the one-year contact rate of other large retailers because those retailers are using the same wholesale rate as a starting point, but then layering on additional retailer fees and other charges. This solution ensures consumers receive the best available rate, while maintaining market alignment through quarterly rate resets,” explains Travis Tuchscherer, manager of Energy Marketing and Business Analysis.

On November first, the new rate calculation will automatically be applied to all residential and small/medium commercial accounts, regardless of whether a contract is currently in place or not.

The passing of this bylaw 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 (COMCO). Until then, this new wholesale market rate approach has been implemented to avoid large swings in the market seen recently.

“Not only will this reduce price volatility for our ratepayers, it will also bring simplicity. With the three rate option offerings – default (RRO), fixed contract, and variable contract – we heard there was confusion and hesitation to select a rate option for fear of making the “wrong” choice. Even though this new single rate will provide a better price than our existing contract rates, the City will honour any existing contracts entered into prior to November 1, if desired by the ratepayer,” explains Tuchscherer.

To keep your existing contract 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.

No action is required for those wanting to receive the best of market interim rate. All current contracts will expire unless explicitly requested to remain in effect.

Currently, natural gas plans and pricing remain unchanged.

For more information on the updated electricity pricing, visit the Updated Electricity Pricing page.

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