Red Deer residents brace for power pain in August

Red Deer residents without electricity contracts can expect some power rate pain next month.

Red Deer residents without electricity contracts can expect some power rate pain next month.

August rates could be the highest in a decade as concerns about tight power supplies drive up prices.

The Alberta Utilities Commission has approved a 26 per cent electricity rate increase for Enmax, which provides the regulated rate option to Calgary and in Central Alberta is contracted to provide the default rate to Red Deer and Ponoka.

Energy prices in August will hit 11.839 cents per kilowatt hour in Red Deer, up from 9.404 the previous month. That price also reflects a 44 per cent jump over the same month last year.

A typical family uses about 600 kilowatt hours a month so the increase would amount to about $14 on a monthly bill.

Customers served by Epcor, FortisAlberta and Direct Energy Regulated Services are seeing similar price spikes.

Industrial Power Consumers Association of Alberta executive director Sheldon Fulton said the increase is expected to short-lived and prices should drop again next month.

“I can tell you September pricing is pretty good,” said Fulton, who serves as an independent advisor on the regulated rate option for power providers Enmax, Epcor and Direct Energy. “We’ve been buying September, if you will, already and the prices there are in the six to seven cents range.

“So hopefully we won’t see too many of these months. This was one of those market aberration circumstances that do happen and they remind us that electricity is still a volatile commodity.”

Fulton said through the regulated rate option, which sets prices for those without an electricity contract, power is purchased in the previous month.

In July, Alberta has hit with some unexpected generator issues that drove up prices. The powerline between Alberta and B.C. is also expected to go down for maintenance at the end of August. That has raised concerns that prices could increase if Alberta hits hot weather and needs more electricity.

On the plus side, some new generation units are expected to come on line in the next year, which will ease price pressures.

Enmax vice-president of government and media relations, Ian Todd, said a host of factors that have led to continued concerns about a potential tight-supply situation have contributed to the second month in a row of high regulated rate option prices.

The unexpected loss of a pair of Sundance generating stations late last year — representing 10 per cent of Alberta’s coal-powered generation — and record-setting loads have been big factors. Alberta’s power consumption set a new record summer load on July 18 at 9,952 megawatts consumed.

Adding to the price pressure is the 300 megawatts of load growth the province is experiencing annually, said Todd.

Similar demand issues cropped up in the spring. In April, power rates also jumped dramatically to 11.490 cents per kilowatt hour, up from 6.973 a month earlier.

Todd reminds customers that the increases only apply to those on the regulated rate option and his company supplies other products, such as EasyMax, that smooth out rate hikes.

pcowley@bprda.wpengine.com