The town has agreed on keeping the current eight per cent electrical franchise rate but the average consumer in town will soon be paying just over $8 more on their monthly bills.
That is because FortisAlberta is applying to the Alberta Utilities Commission (AUC) a distribution rate increase of five per cent along with a 15 per cent increase in transmission costs, both of which are passed down to the consumer.
Last year, FortisAlberta passed along an across the board rate increase of just three per cent. The difference between what is proposed for the coming year and what was in place for 2014 caught some members of council by surprise at its regular meeting on Oct. 27 and prompted Coun. Gavin Bates to seek an explanation from the electricity utility and wire service provider.
“What I have been told is that we haven't seen that much of an increase in the past and it does seem significant and I would like to see an explanation,” said Bates, who was told by administration this year's Fortis increase has never been seen before. “My guess is that it is related to where we are headed in the next three to four years when all of us, the consumers, are asked to pay for all the transmission lines that are being built today.
“My guess is that this is the start of that but I would like them to tell us what it is, and where we are going,” he added.
Heather Whymark, the town's director of corporate services, said the current electrical franchise fee of eight per cent, which was again approved by council for the next year, was preferred by the town because taxpayers are “already getting dinged” by Fortis's proposed hikes.
“We could have gone to higher (franchise fee) but we felt they are going to pay enough,” she said, noting the town is allowed to go as high as 20 per cent.
“As council pointed out tonight we are well within towns our size,” she said, adding Penhold charges 19 per cent.
With council's approval of the franchise fee rate for the coming year, the average customer's monthly bill will increase from $59.72 to $67.76, an increase of $8.04.
“It is not whopping but it is something they should be aware of that is coming down the pipe,” said Whymark.
Council was told that if Fortis's hikes are approved by the AUC it will generate franchise fee revenue for the town of $600,428, which will then be put into general revenues.
Whymark said she is going to contact FortisAlberta to get its explanation on the proposed transmission charge increases.
“They don't have to because it is not us they are passing it through,” she said, adding the increases will be considered by AUC. “I imagine there will be a few (municipalities) asking them why.”
