North Battleford locks in lower natural gas rate with U.S. supplier

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North Battleford’s existing agreement with Connect Energy expires Oct. 31. SaskEnergy only permits supplier changes on or before Aug. 31, according to the administration report, making Monday the deadline for the city to choose another supplier. 

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North Battleford locks in lower natural gas rate with U.S. supplier

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Before approving the agreement, Coun. Kent Lindgren raised concerns about whether dealing with an American company could leave the city exposed to developments in the Canada-U.S. trade relationship.

“If there’s anything in that that stipulates that this rate can change through any of this, or if this is locked in at this rate and will be honoured through that whole process,” he asked. 

Finance director Margarita Pena said Twin Eagle supplies natural gas to organizations in both Canada and the United States and assured council the price cannot change once it is locked in.

“Some other cities are currently using them as their natural gas supplier, and even the University of Saskatchewan is using them as well,” she said. 

Mayor Kelli Hawtin then asked whether administration had considered Canadian alternatives.

Pena said the price difference was partly related to how the suppliers obtain natural gas, with one holding the gas while the other has to purchase it through a third party before reselling it to the city. 

Administration had initially recommended council authorize an agreement at no more than $2.95 per gigajoule after Twin Eagle quoted $2.60 on Aug. 27. The company later repriced its offer to the approved rate. The administration report noted natural gas is traded on an open market and prices can fluctuate daily. 

Pena also said the city asked Twin Eagle whether the same rate could be extended to several buildings it partners with, and said those facilities would also be able to take advantage of the deal. 

The city plans to revisit its natural gas purchasing strategy next year. Pena said she hopes to issue a request for proposals and consider whether to secure another one-year agreement or pursue a longer-term contract. 

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Kenneth.cheung@pattisonmedia.com