Calgary city council looking at possible change to electricity fee

Calgary city council unanimously approved a review of the current local access fee (LAF) that Calgarians see on their monthly electricity bill.

It's a fee that has grown significantly over the past few years because it is tied to the volatility of the regulated rate option (RRO).

"Costs on the regulated rate option a few years ago were averaging somewhere between $50 to $70 per megawatt hour," said Thomas Glenwright, senior director of utilities management at Energy Associates International.

"This year, for comparison, we're seeing the regulated rate option average between $170 to as much as $320 per megawatt hour last month. So LAF revenues have skyrocketed accordingly, and the LAF costs on customers have skyrocketed as well."

Glenwright says the decision to review the fee structure is long overdue.

"It's better late than never. It was welcome news, and the review can't come quick enough," he said.

The fee is charged for using public land for utility infrastructure instead of a form of property tax.

Calgary is the only municipality that ties the fee to the ever-fluctuating RRO, which means Calgarians are currently paying about 250 per cent more for the LAF than their neighbours to the north in Edmonton, where the access fee is a flat rate.

The average Calgarian will pay roughly $260 on local access fees this year, while Edmontonians will pay $80.

Moving away from the RRO for the LAF in Calgary could take up to two years to get through the Alberta Utilities Commission regulatory process, but some city council members hope to speed up that process.

"That is still a long way out, and I don't think that is something Calgarians would stomach well, so we need to work with our colleagues to expedite this process and explore and understand what those implications are," said Ward 11 Coun. Kourtney Penner.

"Then we need to be having those conversations with Calgarians about what it means for them."

Other council members say they would like to keep the LAF on the RRO and use the excess revenue to provide rebates for those struggling to make ends meet.

"Only 20 per cent of our residential customers are on a regulated rate option, and those are the ones who are hurting the most, who potentially could benefit the most from this credit," said Ward 10 Coun. Andre Chabot.

"There's a lot of people that really don't need it, and I'm not sure that a blanket credit is the right method. Maybe we look to go to a means test to provide a credit to those people who are really struggling, which is another option that we have we do that on affordable transit passes. So maybe that's the best solution."

The original plan was for city administration to bring back possible changes to the LAF sometime next year for council approval, but there is a push to speed up that process and have a report ready before the end of 2023.

You can view the city's PowerPoint presentation on the impact of local access fees on affordability here.