Changes to Calgary’s local access fee coming two years ahead of schedule

Calgarians could see changes to their utility bills sooner than previously thought, after the city moved ahead the timeline for changes to local access fees by two years.

The city says a new ‘quantity only’ model for the collection of electric and natural gas is coming on Jan. 1, 2025 instead of Jan. 1, 2027. The process to initiate this change came back in March.

Under the new model, council would be able to set an annual rate for the local access fee.

Currently, the fee changes based on the fluctuating price of power and gas. Local access fees, also known as franchise fees, are calculated as a percentage of the total distribution charges on a bill. Charges are capped at 20 per cent for electricity and 35 per cent for natural gas. These fees are paid on utility bills and the money is forward to the city.

Local access fees are used by municipalities to build, operate, and maintain utilities on municipal land, and also grant the right for the exclusive distribution of services in an area.

The city said the model, which is based on a similar approach used in Edmonton, was developed over the last two years in response to rising utility costs and as a tool to address Calgarians’ affordability concerns.

The flat rate will give more predictability to utility bills for Calgarians, and financially incentivize consumers to reduce their electricity and natural gas consumption.

An accelerated timeline, approved by council on Tuesday, will ensure Calgary is in line with the Utilities Affordability Statutes Amendment Act passed by the provincial government in June.

The Act bans the use of variable market rates when setting local access fees.

This legislation also changed the term “Regulated Rate Option” with “Rate of Last Resort,” which the province said would lessen confusion and encourage Albertans to find the rate that works best for them.

Calgary says it is working with ENMAX and ATCO to negotiate agreements that include the new model. After those negotiations are finished, a submission will be made to the Alberta Utilities Commission (AUC) for review and approval.

The final step will be for the city, ENMAX, and ATCO to work together on implementing the changes to billing systems and notifying customers.