The Future of Power in Medicine Hat

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Medicine Hat's main power plant is nestled on the south bank of the South Saskatchewan River.

In January 2021,the City of Medicine Hat announced an active exploration of strategic alternatives with electric generation assets (GENCO) in an ongoing effort to evaluate asset portfolios in terms of both opportunities and risk management in the rapidly evolving energy industry.

On February 8, 2021, the City confirmed there is no pending sale of the electric generation assets under consideration, and any future possible sale would be subject to an appropriate consultation and approval process. However, the City of Medicine Hat will continue to evaluate the financial performance of this asset and consider its retention value as with any asset in the city's portfolio.

Residents and rate-payers have been asking for more information concerning why the City of Medicine Hat might consider selling our electricity-generating assets. Recognizing that the assets have had a significant and long-lasting impact on our City (over 100 years), the questions are reasonable and expected.

View the FAQ section, or ask your question below.

In January 2021,the City of Medicine Hat announced an active exploration of strategic alternatives with electric generation assets (GENCO) in an ongoing effort to evaluate asset portfolios in terms of both opportunities and risk management in the rapidly evolving energy industry.

On February 8, 2021, the City confirmed there is no pending sale of the electric generation assets under consideration, and any future possible sale would be subject to an appropriate consultation and approval process. However, the City of Medicine Hat will continue to evaluate the financial performance of this asset and consider its retention value as with any asset in the city's portfolio.

Residents and rate-payers have been asking for more information concerning why the City of Medicine Hat might consider selling our electricity-generating assets. Recognizing that the assets have had a significant and long-lasting impact on our City (over 100 years), the questions are reasonable and expected.

View the FAQ section, or ask your question below.

We are receiving a high number of requests for information and are in the process of sorting like questions in order to provide the most meaningful responses. Thank you for your patience.

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  • Share on Facebook Share on Twitter Share on Linkedin Email this link

    Is it possible to purchase our natural gas from a cheaper source and still run our own power plant? Is exploration for new fields in the southern zone a possibility? Our greenhouse industry future is expected to grow substantially and the world needs food that will require cheaper energy. Invest in our future. Our recent Covid pandemic has taught us well that "self reliance" is a must. I believe we (taxpayers) should pay the price now for the purchase of new producing gas wells.

    15 days ago

    We currently DO buy natural gas from others and pay the daily market rate for that gas. Long-term secure contracts would generally be more expensive and result in higher electricity prices. One option is to own the upstream gas versus purchase. The City explored southern Alberta for over three years for new fields with limited success.  No new significant gas fields were found to be viable.

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    Genco now will appear like it’s less profitable if I understand correctly with gas/electric combined. . Which makes it look more appealing to sell as the gas side incurs abandonment expense and losses. Once gas is gone, doesn’t it make sense to keep electric as it is profitable? The cost of buying gas to make electricity is irrelevant as increased prices are passed on to the consumer. Investment has certainly no guaranteed returns as the market fluctuates like any commodify-like gas/electric.

    15 days ago

    The fluctuating price of gas is not passed directly on to the consumer. Rather, it affects the relative profitability of the generation assets.  We charge electricity at blended market average rates.  And you are correct - investment returns are variable, however we could expect relatively more control over the level of risk we are willing to absorb.

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    Is hydroelectric power an option?

    15 days ago

    Hydroelectric energy is an important source of renewable energy. Material energy supply for the City of Medicine Hat, however, would have to come from outside the City due to our lack of geographic space for a dam and associated reservoir.

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    Since you seem to be retaining the distribution system will you be able to retain the part 8 exemption in the Utilities Act? During my time in industry, I have never seen an industrial contract from a supplier that would guarantee absolute back up power.

    15 days ago

    It is our understanding that the exemption you refer to can be preserved in the alternative ownership outcomes under discussion.  The City of Medicine Hat now has the ability to import power from the regional grid which provides amalgamated sources of electricity, ensuring emergency backup.

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    Can we still purchase natural gas with a long term contract from a reputable supplier?

    15 days ago

    Yes. Long-term natural gas supply contracts are available. The longer the term of the supply contract and the price of transport to the City will affect the overall price but natural gas pricing long term is expected to be available in a narrow band of relatively affordable pricing in a historic perspective.

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    Has nuclear power generation been considered? And if not, why?

    15 days ago

    Nuclear power is currently not being considered by the City of Medicine Hat given its very long lead time development and high cost.