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Mayor Gondek wants a review of Calgary’s utility fee take

Calgary’s Mayor Jyoti Gondek wants a review of the Local Access Fee calculation on utility bills to determine if a change is necessary.

This comes as the Regulated Rate Option (RRO) is projected to increase to its highest-ever level of nearly 32 cents per kilowatt hour.

The low in 2022 was roughly 10 cents/kWh back in May.

The RRO price is important because the City of Calgary includes it in their calculation of the Local Access Fee. A Local Access Fee (LAF) is used instead of a property tax on utilities to allow power equipment to run throughout the city.

That appears as a separate charged line item on the bill from Calgarians’ chosen utility provider.

Calgary is the only municipality in Alberta that calculates its Local Access Fee using the RRO.

For many Calgarians, that line item has jumped substantially over the past number of years adding to already high utility prices.

“The model The City of Calgary currently uses to set Local Access Fees may not be the most appropriate one in this volatile energy environment, which is creating situations of energy poverty for many Calgarians who are already struggling with affordability,” said Mayor Gondek.

“Further, it is negatively impacting operating budgets of critical community-based organizations and businesses alike.”

Troy Schmirler, owner of the local company Plainsbreaker Apparel, said that while he doesn’t have direct access to the utility bill through his landlord, his utility bill has jumped $350 since he started. He said that’s double now.

“With all these increases to just keep our doors open, we will be looking at moving space and sharing with other similar small businesses to reduce our monthly overhead,” Schmirler said via email.

Higher fees = more cash for Calgary

The increase in LAF—due to the electricity cost increase—means the City of Calgary is collecting more from homeowners and businesses, on top of their annual property taxes.

According to the City of Calgary’s 2022 annual report, municipal consent and access fees brought in $225.8 million.  That’s up from $165.3 million the year prior (2021) and an average of $135 million the three years prior to that.

The city, in an email, said they’d budgeted $128 million for electricity collection and $61 million for natural gas in 2022.

“The Government of Alberta has acknowledged ongoing challenges with electricity prices using the Regulated Rate Option (RRO). As work to resolve the RRO continues, The City of Calgary will review implications for the Local Access Fees, which are currently tied to the RRO,” read the email statement.

“City Administration will provide a briefing to City Council in September 2023 and, through this process will respond to media inquiries.”

That’s what Mayor Gondek is hoping for.

She wants them to be briefed on the impact of the existing volatility, and disruption that could come from the provincial mandate letter to assess a phase-out of the RRO.  

The mayor also wants to see the history of Local Access Fees, previous looks at the LAF, and what the budget implications of a LAF change could be.

“It is imperative that Administration address this issue expeditiously in the best interest of Calgarians, enabling Council to determine the most equitable solution that prioritizes affordability, certainty, and predictability at this critical time of recovery in our city,” said Mayor Gondek.