Council approves natural gas purchase

·2 min read

Municipal council approved the purchase of natural gas under a partial-hedge, fixed-price contract for a term of up to four years on Sept. 7.

In 2012, Energy Associates International (EAI) was selected by the municipality to be its energy consultants to manage its electricity and natural gas portfolio.

Fifty per cent of Jasper’s consumption volumes are locked in at $2.43 today and the remaining 50 per cent has been floating on the spot price, meaning the price at the pump.

In 2019, 70 per cent of volumes have been charged on an average price of $1.82/GJ and 2020 was an average of 2.28/GJ.

“If you are looking at buying natural gas strategically, we want to make sure we are going long-term; we are leveraging the wholesale curve downwards,” said Jay Manoharan with EAI during the presentation to council.

A reason why some of the prices have been increased is due to the impacts of the COVID-19 pandemic.

If EAI and the municipality can secure a fixed contract below the $3.00/GJ mark, EAI said it can work to stabilize the supply costs of the natural gas.

The recommendation that was made was structured to provide municipal administration flexibility to look for best value when they do go to market.

This is not an insignificant purchase and would have a significant impact on the municipal budget, which is why it was brought forth to council.

Administration added that it needed council’s approval to act quickly in the live-market situation.

The next steps that EAI is recommending are to finalize the pre-qualification of suppliers and present all results to administration.

These results of the competitive RFP recently closed on Sept. 1.

Another recommendation is to monitor all wholesale natural gas market pricings for an optimal time to purchase, as well as to schedule a live bid transaction to secure partial hedge fixed price supply contract for the date of Nov. 1, 2022.

The target dates range from prior to Nov. 1, which is the start of the winter gas season.

Coun. Helen Kelleher-Empey made the motion that council approve the purchase of natural gas under a partial hedge fixed-price contract for a term of up to four years.

With all those in favour, the motion was carried.

Council will now wait to hear from EAI for when they engage in the live-bidding process.

Ali Howat, Local Journalism Initiative Reporter, Jasper Fitzhugh

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