It’s time to even things up.
Utility franchise fees were on the table at Tuesday’s Town Council meeting.
Council is considering a proposal that will increase fees charged to Fortis Alberta for its electric distribution system. Town administration recommends a gradual, annual increase of five per cent over three years.
The Town charges utility companies franchise fees for the right to use lands for their infrastructure throughout Cochrane.
In 2015 the town entered a ten-year franchise agreement with Fortis Alberta for electricity and ATCO for natural gas. Both companies allow council to adjust the fee percentage rate. Fortis is charged 15 per cent of gross distribution fees, which were set in 2005. The maximum allowed is 20 per cent. ATCO pays 20 per cent, set in 2015. The maximum allowed is 35 per cent.
Administration recommends no increase for ATCO as the fee was dropped from 23 per cent to 20 per cent in 2015. Fortis’ fee has remained unchanged since 2005.
“It makes sense that the fees are closer together,” said Coun. Morgan Nagel.
These fees are a vital revenue stream in the Town’s budget for funding transportation operating requirements. The fees are one part of the total utility costs that are charged to customers. The proposed fees would collect an additional $301,000 in revenue, up from $2.2 million.
If the proposal goes through, customers will see an increase through the local municipal access fee on their electric bill. The access fee will increase from $9.07 (15 per cent) to $10.99 (17 per cent) of the delivery charge of Fortis Alberta. The calculation is based on 640 kWh consumption in 30 days.
The proposed rate increase must be advertised in the Cochrane Eagle for at least two consecutive weeks. Responses to the advertisement will be included in the final report presented to Council.
Counc. Marni Fedeyko was concerned that residents aren’t entirely clear on where the additional money is going. She said she’d “feel better” if further details to customers was provided in the advertisement.
In 2018 the Town of Cochrane received $3.1 million in annual franchise fees.
