Council decides to hold electricity fee structure despite record revenues

Calgary city council voted to leave the way it charges a key piece of residential electrical bills alone until the province finishes its review.

Councillors met behind closed doors Tuesday afternoon to discuss potential changes to the Local Access Fee that is on track to bring in more than double the revenue projected in last year's budget.

The fee is used in lieu of property tax on energy service providers and is tied to the Regulated Rate Option, which the province is reviewing after it more than tripled the average rate in recent years.

In the first nine months of 2023, the city collected $237 million in local access fees, according to Enmax. The utility had projected $125 million for the year.

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According to Energyrates.ca, the average Calgary home will pay $260 in local access fees in 2023. The same fee will cost people in Edmonton about $80.

"We value making sure there's a strong revenue stream coming in so we can deliver services to Calgarians," Mayor Jyoti Gondek said.

"But at the same time, we value the fact that people need affordability and predictability."

Some councillors said they simply don't have enough information to make an informed decision until the province releases the result of their review of the Regulated Rate Option sometime in 2024. The RRO is the wholesale electricity cost in Alberta.

It hit 31.9 cents per kilowatt hour last summer. It has historically sat below 10 cents per kilowatt hour.

"This is an important issue for Calgarians, they want to know that their local government is doing everything they can to meet them where they're at," said Ward 12 Councillor Evan Spencer.

"It really ends up circling around to long-term predictability and stability.

"We're waiting for the province to come out with its decision on the RRO."

While the revenue usually goes toward the operating budget and to offset residential property taxes, the excess money is now being used for a Capital Futures fund that covers infrastructure and community projects.

Another $10 million was set aside in the November budget for the Basic Needs Fund which provides emergency assistance to people in an unexpected financial crisis.

Veteran Ward 10 Coun. Andre Chabot says the whole question of changing the structure of the fee is more complicated than it appears.

"Everything is being looked at right now in isolation of just electricity. If you look at both electricity and natural gas you'll see we take significantly less in natural gas fees," Chabot said.