Locals have just paid this year’s municipal taxes, but the Municipality of Jasper already knows that they’ll have to ask for more next spring.

The town’s new electrical contract will see an increase of almost $50,000 in order to provide power for municipal needs. Given that the total tax assessment for Jasper in 2006 came to $4.7 million, a tax increase of slightly more than one per cent will be necessary to cover the added costs.

“That’s just to turn the lights on next year,” said Councillor Mike Day. The municipality’s contract with Constellation NewEnergy will provide electricity for the activity centre, the waste water treatment plant, other municipal buildings, and Jasper’s street lights.

Keith Shepherd, the municipality’s director of finance and administration, presented council with three possible alternatives for the decision on a power contract. The first option was to initiate a full contracting process, which would have involved asking for bids and evaluating offers, during which time the commodity price of electricty may have increased somewhat. Another choice was to sign a “market watch” contract with Constellation, a potentially rewarding proposition but one that, ultimately, council was unwilling to risk taking part in.

Under the terms of a market watch contract, the municipality would have named a price and if the price of electricty dropped to that level over the remainder of 2006, Constellation would lock in at that price and provide energy for the duration of the contract at the pre-arranged rate.

“It’s like playing the stock market,” Municipal Manager George Krefting explained. “Rarely do you buy stock at the price it’s trading at. You have a price and you wait until the stock dips down to that level before you buy.”

Mayor Richard Ireland saw one major flaw in Krefting’s analogy.

“The difference is, you don’t have to buy the stock,” he said. “We have to buy the power.”

Indeed, should the named price not be met before January 1, 2007, the municipality would then be forced to accept market price for electricity. Given that the unit price of power has been rising consistently over the past few years, this would be the likely outcome of signing a market watch contract, said Shepherd.

“The trend is upward, so unless we get lucky... the market price is not going to be lower, and I’m not good with lottery tickets either,” he said.

That said, Shepherd was cautiously recommending that council sign a market watch contract. This would have enabled the municipality to wait until the Alberta Urban Municipalities Association developed a more complete aggregation plan.

“We’d hope to take advantage of AUMA’s collective bargaining power to get a better price in September, but we would miss out on the chance to grab onto today’s price,” Shepherd told council.

“It seems that the options are lock in now, or wait a few months and maybe lock in at a lower price but probably lock in at something higher,” Ireland responded. 

“What a choice!”

Other members of council weren’t keen on playing the waiting game.

“We might have the best deal possible right here,” said Councillor Joe Couture. In the end, Couture and his colleagues voted unanimously to sign a five-year contract with Constellation at the offered rate of about $66.50 per megawatt hour. The price increase will not be totally ascertained until Shepherd finalizes the contract, but it is estimated that the cost of electricity will have grown by 26 to 28 per cent when all is said and done. The increase is exacerbated by the municipality’s new green purchasing policy, which mandates that at least 20 per cent of the electricity comes from green power sources. This option costs an extra $2 per megawatt hour.

Several years ago, the municipality looked into creating their own green power, by setting up a hydroelectric installation on Cabin Creek. That’s no longer an option, Environmental Services Director Ken Quackenbush said in response to a question from Councillor Andy Walker.

“Not with the system we have now, because we need the resevoir head to be maintained in order to keep the town’s water pressure high enough,” he said. “We could have put in a small turbine that would have reduced the pressure... but it’s not worthwhile due to the small amount of power that would be generated.”