DIDSBURY - Council has passed a motion that the Town of Didsbury lock in its nature gas contract rate for 24 months.
The town has been on a variable or index rate for its natural gas charges, which fluctuate based on the market price. The average rate in the past 13 months has been $6.74 per gigajoule (GJ).
With natural gas prices currently being impacted by a variety of factors, administration recommended that the municipality consider locking in its rates.
“The town uses the bulk of its natural gas in the winter months and leaving the contract on a variable plan may be costly for the organization,” Ethan Gorner, the town's chief administrative officer said in a briefing note to council during the Sept. 13 council meeting.
“While council may choose to lock in for a period of time, locking in for a period of five years may be risky given the uncertainty of future natural gas rates.”
During the Sept. 13 council meeting, Amanda Riley, chief financial officer, said administration works with energy consultants to obtain current pricing from several retailers.
Coun. Dorothy Moore said she was in favour of locking in for two years.
“In this case I think this is a wise decision,” said Moore. “I do feel we are in for a lot more volatility in the short term. For sure in the short term we could have some really high (variable) rate.”
The town has received a number of quotes from energy retailers with options for 24 months as low as $5.72 per GJ.
Deputy mayor Curt Engel said, “I’m certainly comfortable locking in for 24 months with what is going on in Europe and nothing seems to be coming down in price right now.”
Riley told council, “What will happen is if you approve the motion, I will go back to the energy consultant and he will get new rates, because these basically change every day, and we will have to see from there which company it is.”
The final rate the town will lock in for will be reported back to council.
