The Government of Alberta is introducing more measures to reduce the cost of utilities for Albertans.
Premier Danielle Smith was joined by Affordability and Utilities Minister Nathan Neudorf to announce the newest changes, which dealt with franchise fees.
"One cost that Albertans find on their power bill is called the 'Local Access Fee,' sometimes called the 'Local Access and Franchise Fee,'" explained Smith. "This is a fee municipalities charge to power companies to have their power lines or gas pipelines located within municipal boundaries. Think of it like rent to the city, town, or region that they charge to the power company for setting up infrastructure there. The power company then passes the Local Access Fee onto its customers as part of their monthly power bill."
The way in which franchise fees are calculated varies between each municipality, with many calculating their franchise fees as a percentage of the total distribution charges for each customer's bill, as is the case in Okotoks.
In Calgary, franchise fees are calculated based on market rates, namely the Regulated Rate Option (RRO), combined with consumed megawatt hours.
Danielle Smith said this led to Calgarians paying $240 in franchise fees on average in 2023.
The Province will be introducing the Utilities Affordability Statutes Amendment Act to prevent the calculation of franchise fees through variable rates.
Neudorf explained the bill would also change regulatory oversight.
"In addition to prohibiting the use of variable rates to calculate local access fees, the Utilities Affordability Statutes Amendment Act would prevent municipalities from attempting to take advantage of Alberta ratepayers in the future. It would grant the Alberta Utilities Commission stronger regulatory oversight on how these municipal fees are calculated and applied, ensuring Albertan ratepayers' best interests are protected by an independent regulator."
Mon, May 6, 12:00 AM
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