Calgary city council will wait for the results of a provincial review before considering any changes to the local access fee on power bills.
Council spent Tuesday afternoon behind closed doors debating potential changes to the fee, including implications to the city’s budget and the impact on Calgarians’ bills.
However, the decision was made to determine the results of the province’s review into the regulated rate option (RRO).
“One of the sticking points for us right now is weighing in on a decision that talks about predictability versus variability, and not knowing what’s happening with the regulated rate option,” Calgary mayor Jyoti Gondek said. “It’s a premature decision for us so we are waiting for the province to tell us what their plans are for the RRO, and we would be making a much more informed decision if we knew what that was.”
One reason for this is Calgary’s local access fee is tied directly to the RRO, rising and falling as the price fluctuates.
The fee is a line item on electricity bills paid by Calgarians as a charge to utilities in lieu of a property tax to operate electricity infrastructure on municipal lands.
City council ordered a review of the fee after the RRO skyrocketed to record highs in August, and in turn, causing the local access fee to balloon for many Calgarians.
The report from city administration, which was kept confidential, was expected to provide alternatives and potential changes to the fee structure for council approval.
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However, some city councillors were critical of the move to punt any changes to the local access fee until next year.
Ward 3 Coun. Jasmine Mian argued city council had enough information to make changes how the local access fee is calculated and collected.
“We’ve heard over and over again that people want that stability and I believe we know how to provide that to them,” Mian told reporters. “I think we could’ve made that decision today, so I’m disappointed that we didn’t.”
According to EnergyRates.ca, Calgarians will pay an average of $260 this year on local access fees, 250 per cent more than the $80 Edmontonians will pay as the fee is a flat rate in that city.
The fee also contributed to a multi-million dollar surplus for the City of Calgary this year, with $100 million more than budgeted flowing to city coffers in 2023.
Ward 10 Coun. Andre Chabot argued that revenue is necessary to help fund capital and infrastructure projects in the city, as well as offset property tax increases.
“The amount of money we collect is scrutinized as to where it gets invested and not spent frivolously,” he said. “This is going to capital programs on the surplus, and everything else is utilized to offset tax increases.”
“Tax increase or increase in franchise revenue? Which do you want?”
According to the province, their review is looking at “all aspects and costs of the electricity system” in an effort to ensure reliability and affordability, which includes the regulated rate option.
“This particular review should be completed sometime in the new year as we look to address the volatility in the RRO and providing clarity and affordable options for consumers,” a provincial spokesperson said in a statement to Global News.
According to experts, the price of the RRO is forecasted to drop in 2024, but that shouldn’t stop city council from coming to a decision about the fee.
“If we say that the crisis is over and there’s not really a point to doing anything about this, if it happens again, we’ll be in the same position,” Darren Chu, managing director with Utility Network Partners Inc., told Global News. “What city council should be doing, if they really care about affordability, is they should deindex the local access fee from the RRO.”
In the meantime, Gondek pointed to a $10 million allocation of funds in last month’s budget adjustments to the city’s basic needs fund to help provide relief from high electricity bills.
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