Councillors approve quantity only model for local access fees

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Citing the elevated stability and predictability it’s going to present future budgets, Calgary metropolis council voted Monday to pursue a brand new mannequin for figuring out its native entry payment (LAF).

The brand new formulation, which administration will introduce in January 2027 pending the Alberta Utilities Fee’s approval, will see Calgary councillors set an annual fee to focus on a particular income quantity primarily based on forecasted electrical energy/pure gasoline consumption figures.

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Council’s path differs from a establishment that presently sees town tie a portion of its LAF — additionally known as a franchise payment — to the province’s regulated fee possibility (RRO) for electrical energy.

The present technique has led to town gathering higher-than-anticipated revenues from the payment lately, because of the fluctuating nature of the RRO and a surge in electrical energy costs since 2021.

Councillors debated the deserves of the amount solely mannequin, which employees claimed will present extra predictable income for town and fewer variable payments for shoppers.

However not all councillors had been in favour of employees’s suggestion. Coun. Terry Wong requested what was damaged — town has been utilizing the identical methodology efficiently since 1974 with only some unstable years in between.

Councillors Peter Demong and Jennifer Wyness requested why administration was coming to council for a choice now, contemplating the provincial authorities is presently reviewing the RRO.

Wyness equated Monday’s dialogue to creating a choice “with out all of the details on the desk.”

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Carla Male, town’s chief monetary officer, responded that making a mannequin with extra stability is “paramount,” and that the present formulation is creating “giant swings” within the quantity electrical energy customers are charged and the way a lot town collects.

Different councillors argued in favour of the brand new mannequin. Coun. Evan Spencer, who ultimately moved to approve employees’s suggestion, famous that council has reviewed the franchise payment formulation eight instances since 1991.

However contemplating Alberta’s unstable electrical energy market lately and the impact the RRO has lately had on the utility payments of Calgary’s giant asset holders, Spencer argued now’s the fitting time to pursue a change.

“Let’s flip the nook and provides administration the path wanted in the present day to show that nook,” he stated.

‘It’s untimely for us to maneuver ahead,’ argues dissenting councillor

Coun. Andre Chabot, who has lengthy touted the advantages of the present mannequin, launched a referral movement to ship the merchandise again to administration to undertake a scoping report to find out how a lot it will price town to make the change.

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Chabot stated he lately spoke to Alberta Affordability and Utilities Minister Nathan Neudorf, who instructed him that legislative modifications to the RRO can be introduced “inside weeks.”

“In gentle of the very fact there’s a resolution that’s imminent . . . even when it takes a month, I believe it’s untimely for us to maneuver ahead with one thing that has confirmed the take a look at of time,” Chabot stated.

And whereas he acknowledged a volume-based mannequin would offer town’s income stream extra certainty on a go-forward foundation, Chabot added the present mannequin higher responds to market swings.

“When costs go up and now we have to incur greater prices, our LAF goes up,” he stated. “When costs go down, our LAF goes down and our costs go down, so we don’t have to avoid wasting as a lot.”

Chabot’s referral movement failed narrowly, 7-8, with councillors Wyness, Wong, Demong, Sean Chu, Dan McLean and Sonya Sharp voting alongside him.

‘Certainty versus windfall’

Coun. Kourtney Penner stated council ought to neither wait nor base its resolution on the outcomes of the provincial evaluation.

“I believe we’re at a choice level and we frequently make selections with out information of what the province might do,” she stated. “Even our budgets, we don’t usually know what provincial grants will likely be coming our approach, but we make budgetary selections on a regular basis.”

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After voting down Chabot’s referral, council collectively voted 12-3 in favour of pursuing the amount solely mannequin. Councillors Chabot, McLean and Chu voted in opposition.

Metropolis administration will now work to implement the mannequin for January 2027, to higher align with town’s price range cycles.

“If it provides us the peace of thoughts that we received’t should expertise what we skilled up to now two years . . . I believe it’s value it,” stated Coun. Courtney Walcott, including he felt council might have made the identical resolution in December.

“We’re in the identical place now — certainty versus windfall,” he stated. “So far as town is anxious, it’s the identical.”

sstrasser@postmedia.com

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