BANFF – The Town of Banff is looking to lock in on electricity prices for 2024-27 to save costs in the long run.
Energy Associates International (EAI), a consulting company that advises the municipality on purchasing for its electricity contract, recommended securing forward fixed pricing now in order to avoid escalating electricity prices.
“They have their finger on the pulse of what’s going on,” said Chris Hughes, the director of corporate services for the Town of Banff.
“What we’re trying to do is lock into a rate now that we figure, based on all the information that we have now, will be lower than if we wait any longer.”
The Town of Banff’s current electricity contract expires on December 31, 2023.
Council has authorized administration to enter a bid transaction process to secure wholesale electricity pricing options for the Town for 2024-27 and to enter a contract with the successful bidder based on the bids received.
This will provide some price certainty for electricity pricing into the future that is below the price the Town of Banff would likely get in the future.
“Given that our electricity costs are close to $1 million per year, I think this makes great sense to go out and try to secure the best pricing,” said Councillor Chip Olver.
Coun. Olver also tied the issue into some decisions made during service review and budget.
“Our municipal energy coordinator and our environmental manager have provided us with reports that show how through energy retrofits in our facilities that we’re able to reduce our electricity usage,” she said.
“That plays into reducing the costs for our electricity bill because we’ll be using less of it.”
Hughes said forward electricity prices remained at year-to-date lows until April 2021, but started rising in September 2021 when the federal government introduced the Greenhouse Gas Pollution Pricing Act (GGPPA).
He said TransAlta soon after announced the early retirement of a few coal units because they were no longer economical to convert the units to natural gas.
“Early retirement will cause an 8.5 per cent loss in overall supply capacity in Alberta, which resulted in wholesale forward trading prices rising even further in October 2021,” said Hughes.
“What the experts are telling us right now is if we wait on this that costs will likely only increase.”
