Alberta power price protection now covering Medicine Hat consumers

medicine hat
Medicine Hat, Alberta

If rates rise above 6.8 cents, rate cap automatically applied to bills of consumers

Medicine Hat power consumers will not pay more than 6.8 cents per kilowatt hour through May 2021. This is the same protection offered to Alberta families, farms and small businesses on the Regulated Rate Option thanks to An Act to Cap Regulated Electricity Rates, which took effect in June 2017, according to an Alberta government press release.

The Regulated Rate Option is the default electricity contract for the vast majority of Albertans, but does not apply to Medicine Hat consumers because the city operates its own power utilities.

To ensure Medicine Hat residents receive the same protections as other Albertans, the government worked with the municipality to develop a regulation that keeps electricity prices stable and affordable.

“When we introduced our power price ceiling, we said we’d work with Medicine Hat to offer the same protection that benefits the majority of Albertans. We’re now proudly delivering on that promise, so that even when rates are low, families won’t have to worry about bills spiking from one month to the next. I want to thank the city for being a great partner in helping us make life better and more affordable for all Albertans,” said Margaret McCuaig-Boyd, Minister of Energy.

electric semi-truck

More than 31,000 power consumers served by the City of Medicine Hat will benefit from the cap beginning Jan. 1, 2018.

The city’s electricity rates have been comparable to the major Regulated Rate Option providers. In the new year, rates will be based on the average of four energy providers approved by the Alberta Utilities Commission.

While provincewide electricity rates are currently low, they have a history of being incredibly volatile. In the past six years, the Regulated Rate Option has:

  • Been as high as 15.3 cents per kilowatt hour and as low as 2.7 cents.
  • Increased month-over-month by as much as 65 per cent, or $28 for the average residential bill.
  • Depending on the month, resulted in the average residential consumer paying as little as $20 for their electricity or as high as $90.

During the period the price ceiling is in effect, consumers on the Regulated Rate Option and Medicine Hat’s default rate will pay the lower of the market rate or the government’s rate of 6.8 cents per kilowatt hour.

The government is working to keep rates below 6.8 cents in a variety of ways, including the transition to a more stable and predictable capacity electricity market.

Should rates rise above 6.8 cents, the rate cap would be automatically applied to the bills of consumers on the regulated or default rate.