Calgary city council will wait until a provincial review is complete before discussing a change to their Local Access Fees.
Calgary city council spent the day behind closed doors in a strategic meeting to discuss both the recent budget adjustment process and the Local Access Fees. They emerged Tuesday afternoon and approved a motion to wait for the outcome of a provincial review of the Regulated Rate Option (RRO).
The Local Access Fees (LAF) are the levies paid by electricity providers to access municipal infrastructure instead of paying property tax. That cost is passed on to electricity customers as a part of their monthly bill.
Calgary’s formula for calculating the LAF is tied to the Regulated Rate Option for electricity, which has been subject to volatility this year. They are one of the only municipalities to use this measure for their LAF calculation. RRO prices in August were more than 30 cents per kilowatt hour. That put the City of Calgary in the enviable position of collecting millions more from ratepayers than in previous years.
“There’s a lot of complexity in making a decision around local access fees and the provincial review regulated rate option, or RRO, right now is something that we have to consider and without any real indication of whether they’re going to change that,” Mayor Jyoti Gondek said.
The mayor said that since a decision earlier this year to stay the course on the LAF, some councillors have had a change of heart.
“I would say that members of council have now realized that with the increase in the fees that we’re paying, this is something that’s not tenable for Calgarians,” she said.
“We need to look at whether the formula still works or whether we need to do something that’s more like the Edmonton model or some sort of a hybrid.”
Insult to injury: Coun. Evan Spencer
Ward 12 Coun. Evan Spencer said that he’s frustrated that some of his council colleagues are trying to pitch that the situation isn’t as bad as it’s being made out. He referred to it as a sleight of hand.
“Ultimately. Calgary isn’t doing anything nefarious, but our actual methodology is a problem,” Spencer said.
He said he’s heard from many of Calgary Civic Partners that they’ve experienced massive increases in their utilities that are putting big holes in their annual budgets. To that end, Spencer said Calgary is an outlier in how they charge these fees.
“This is something that we could have corrected a long time ago,” he said.
“Council has had foresight, looking at this as a potential fallout. We just haven’t had the resolve and we’ve had some opposition on the admin side because it is a lot of work to make the change.”
Spencer said when all of a sudden ratepayers’ bills skyrocket, not only does it frustrate them from an affordability aspect, but also hits the city reputationally, he said.
“In my mind, it’s a no-brainer. We have to make this change for the long-term benefit of our local governance here in Calgary.”
Ward 10 Coun. Andre Chabot said that thus far, we’re only looking at electricity in isolation. He said that we take significantly less than other municipalities on the natural gas side.
“When you look at balancing things out, you’ll see that we actually don’t take more than other municipalities,” he said.
“Our system is the only system that is truly equal for all utilities, whereas other municipalities will charge differential rates like 35 per cent for natural gas on the distribution side versus 20 per cent on electricity, and those are the maximums.”
Further, Chabot said that it’s not as though the additional money collected is spent on frivolous items like bonuses.
“This is going towards capital programs on the surplus and everything else is utilized to offset tax increases,” he said.
