Calgarians are a step closer to getting some relief on their electricity bills following city council’s decision to explore a different model for local access fees (LAF).
At a strategic meeting of council on Monday, councillors agreed to have city administration design a “quantity-only model” for the LAF.
Currently, the LAF levied on all electricity bills is tied to the regulated rate option (RRO), the floating price of electricity in the province.
Under a quantity-only model, Calgarians would be charged only based on how much electricity they use, similarly to how Edmonton recovers grid costs.
Recent years have seen local access fees jump as the RRO jumped. For example, August 2023’s RRO was more than two-and-a-half times higher than the RRO from two years prior.
LAF fees go toward the upkeep of the city’s electricity system, with surpluses going to other capital projects in the city.
Carla Male, the city’s chief financial officer, said the large swings in RRO rate has introduced instability and unpredictability in the costs Calgarians and businesses have had to face.
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“Stability and predictability is paramount, and our existing system that uses the RRO is causing large swings,” Male said. “And so we know that businesses and citizens are having trouble with that.”
Ward 12 Coun. Evan Spencer recognized the change to LAFs isn’t a “massive affordability play.”
“What this is, is a predictability and stability conversation, which is good for business, good for governance, good for reputation,” Spencer said.
The quantity-only model will require council to set the rate charged, something that will have to be done annually.
“Our analysis shows that in moving to a quantity-only model and counsel being able to set that rate provides more certainty and predictability for counsel and for citizens and for businesses,” Male said.
The city’s CFO and her team will now prepare a more in-depth model proposal for council to consider.
“It is a large amount of work, and we need this initial decision by council to be able to take those next steps,” she said.
Council approved the work in a 12-3 vote, with only councillors Dan McLean, Sean Chu and Andre Chabot voting against it.
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