The Town of Turner Valley has secured its energy costs for its more than a dozen facilities another two years onto an existing electricity contract.
During its April 6 meeting, Turner Valley Town council unanimously agreed to add two years to its five-year agreement with Energy Associates International to take advantage of the current electricity prices.
The decision follows a significant savings the Town is expecting to see in its electricity costs last year thanks to the program.
While the total savings are yet to be calculated, a report from the West End Commission stated it saved roughly $30,000 on its bill in its first year of the 2014 to 2018 agreement. The commission ended up paying $105,000 for the year.
“$30,000 a year, that’s enormous to me,” said Turner Valley Mayor Kelly Tuck. “It’s a cheaper avenue for municipalities. We are trying to be more cost effective. Every time you have to go to the ratepayers for an increase they get kind of ticked (off).”
In 2013, the Town of Turner Valley changed its electricity providers, locking into a five-year contract. The Town locked in its electrical pricing for 2014 at $54 per megawatt hour with Energy Associates International and will review price quotes and make a bid shortly for 2019 and 2020.
“The very first year in 2014 there was significant savings certainly for the west end as well as the town of TV,” said Barry Williamson, the Town’s chief administrative officer. “It’s a way to manage our costs.”
He said companies and municipalities can secure costs for commodities with longer-term contracts that are based on the best price available on markets.
“The markets don’t usually wait for circumstances to go your way, they go up and down,” he said. “Some of the announcements coming out of the province around coal-generated electricity, based on what we’ve seen in the market, it’s a good time to go in and lock it in. The expectation is electricity prices are going to go up in the future.”
Previously, the Town of Turner Valley bought a fixed rate through the Alberta Urban Municipalities Association’s financial service Alberta Municipal Services Corporation (AMSC), said Williamson.
The pricing with the AMSC was roughly $88 per megawatt hour compared to Enmax, the winning bidder, which was roughly $54 per megawatt hour, Williamson said.
“We were not aware you could get quotes and possibly get a better rate,” he said. “That became widespread knowledge in 2013.”
Williamson said council’s decision is advantageous to the Town and ratepayers.
“It will make a difference because the forward view of the market in the next number of years is the electrical prices are going to go up,” he said. “What we’ve seen happen and what the alternative was this is the much better way to go.”
