Summary#

Council increased the franchise fee rate in the City’s electric distribution agreement with EPCOR Distribution and Transmission Inc. from 17.65 per cent to 19.4 per cent, effective January 1, 2027. The fee is based on electricity distribution charges and is generally passed on to utility ratepayers. Council also directed City staff to provide a memo showing annual utility rates, including applicable franchise fees, for 2021 to 2025.

• The fee increase was carried 8 to 5. Councillors K. Principe, M. Elliott, T. Parmar, E. Rutherford and R. Clarke voted against.
• The rate applies to the fee EPCOR pays the City for its exclusive right to distribute electricity and use City rights-of-way. It is not a 19.4 per cent increase to the full electricity bill.
• Council set 19.4 per cent, not the 20 per cent recommended by City staff.
• City staff must provide the five-year utility-rate memo. The motion gave no due date.

What it means for you#

• Electricity customers: The higher fee is generally recovered through utility bills. The materials do not give an estimate of the bill effect at the approved 19.4 per cent rate.
• Other utility customers and the public: City staff must report annual water, wastewater, electricity and waste utility rates, including applicable franchise fees, for 2021–2025.
• City: The franchise fee is City revenue that supports general tax-levy operations.

Money#

The available materials estimate revenue and bill impacts for the staff-recommended 20 per cent rate, not the 19.4 per cent rate Council approved.

• At 20 per cent, City staff projected $14.8 million more in 2027 franchise-fee revenue, for a total of $125.6 million. The current-rate forecast was $110.8 million.
• At 20 per cent, staff estimated a typical residential customer’s monthly power franchise fee would rise from $9.06 to $10.27, an increase of $1.21. These figures are not estimates for the approved rate.
• No cost estimate is provided for preparing the rate-history memo or for the approved 19.4 per cent rate.

What is unclear#

• The materials do not estimate the City’s 2027 revenue or customer bill impacts at 19.4 per cent.
• The motion does not set a deadline for the rate-history memo.
• No public engagement with utility ratepayers was conducted for the fee adjustment.

Case for#

• City staff say the fee compensates the City for EPCOR’s exclusive use of City rights-of-way and its exclusive electricity-distribution rights.
• The approved 19.4 per cent rate matches the effective rate Calgary used, according to the staff report. Staff also noted that some Alberta municipalities set their rates at the 20 per cent maximum.
• The higher fee would add revenue for City services, though the materials do not state the amount expected at 19.4 per cent.

Case against#

• A higher fee can mean higher electricity charges for customers. Staff’s $1.21 monthly example was for a typical residential customer at 20 per cent, not the rate Council approved.
• The staff report recommended 20 per cent, but Council chose 19.4 per cent. The materials do not explain why Council selected that rate or quantify its effects.
• Five councillors voted against the increase. The supplied record does not give their reasons, so it is unclear what concerns they raised.