Province, city see no hurdles in getting a deal done to keep Hat customers under power cap

A special agreement will be required to cover Medicine Hat power customers under a provincial cap on electricity prices announced Tuesday, though both levels of government see no problems or rush to come to an agreement.

Energy Minister Margeret McCuaig-Boyd told a news conference Tuesday that she hopes to have a previously announced consumer rate cap in place on June 1.

That would protect utility customers who use a regulated rate option (RRO) when prices rise above a certain mark.

As a grandfathered municipal provider, Medicine Hat’s utility department instead offers price stability by setting prices against an average of default prices across the process in other areas.

However, local utility commissioner Cal Lenz says talks are well advanced to bring city utility customers under the cap’s protection.

“There are a few folks that don’t fall under the normal when it comes to RROs, and we’re one of them,” Lenz told the News on Tuesday.

“Our customers pay into the carbon levy fund. We feel they should benefit from the (cap) program.”

The current power price is is 2.7 cents, near a decades-old low.

The local price has not risen above the cap level since August 2015, and the price forecast doesn’t show rates returning to those levels any time soon.

The program will pay power producers the difference, when prices rise above 6.8 cents per kilowatt hour.

That would be paid out of carbon levy revenue, in a system the NDP says will protect consumers from price spikes.

The government estimates increases in power rates above the cap would cost about $10 million a month per cent above the cap.

Provincial electricity rates averaged about 3.9 cents per kilowatt hour between April 2016 and April 2017, but have spiked to as high as 15.3 cents per kilowatt hour in the past six years.

The government says about 60 per cent of consumers pay market rates, while others are on fixed-price contracts that have averaged 6.1 cents over the past year.

Opposition members have criticized the government for what they say is moving too quickly on changing the power market.

-- With Files from the Canadian Press