Calgarians are closer to receiving relief on their electricity bills after the city council decided to investigate a different approach to local access fees (LAF).
During a strategic council meeting on Monday, councillors agreed for the city administration to develop a “quantity-only model” for the LAF.
At present, the LAF imposed on all electricity bills is linked to the regulated rate option (RRO), which is the fluctuating cost of electricity in the province.
With a quantity-only model, Calgarians would only be billed based on their electricity usage, similar to how Edmonton manages grid costs.
In recent years, local access fees have risen alongside the RRO. For instance, the RRO in August 2023 was over two-and-a-half times higher than two years earlier.
LAF fees support the maintenance of the city's electricity system, with any extra funds going to other city projects.
Carla Male, the city’s chief financial officer, noted that the significant fluctuations in RRO rates have introduced instability and unpredictability in the costs faced by Calgarians and businesses.
“Stability and predictability are crucial, and our current RRO-based system is causing large fluctuations,” Male stated. “We know that businesses and citizens are struggling with this.”
Ward 12 Coun. Evan Spencer acknowledged that the shift in LAFs does not represent a “huge affordability play.”
“This is about predictability and stability, which is beneficial for business, governance, and reputation,” Spencer explained.
The quantity-only model will require the council to determine the rate charged, a task that will need to be completed annually.
“Our analysis indicates that transitioning to a quantity-only model and allowing the council to set the rate provides more certainty and predictability for the council, citizens, and businesses,” Male stated.
The city’s CFO and her team will now develop a more detailed proposal for the council to review.
“This involves a substantial amount of work, and we need this initial decision by the council to proceed with the next steps,” she said.
In a 12-3 vote, the council approved the initiative, with only councillors Dan McLean, Sean Chu, and Andre Chabot voting against it.
