Town council will be moving forward with increasing franchise fees with Fortis Alberta for its electric distribution system.
Revenue from the fees in 2019 are expected to be $2.2 million. With the increased fee for 2020, anticipated revenue will rise to $2.5 million.
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.
At last Monday’s meeting council voted to increase the fee from 15 per cent to 17 per cent. As per the Town’s process, the proposal was advertised for two weeks and asked for public feedback. They received one comment from a concerned citizen that worried the Town was trying to withhold what the extra money will be used for.
Counc. Marni Fedeyko worried that residents weren’t informed on the use of the money.
Mayor Jeff Genung reiterated that the money will not be used to offset the cost of transit, but instead the Town Roads Division will determine its use. When Counc. Fedeyko asked again what - specifically - the money will be used for Katherine Van Keimpema, Senior Manager of Corporate Services, said the department will use it for sanding and salting, line marking and all services provided by the department.
Counc. Morgan Nagel said he didn’t receive positive feedback about the fee increase from residents he spoke to. Despite this, he didn’t want to delay the process of notifying Fortis and agreed to move forward.
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 at the October 15 council meeting.
These fees are a vital revenue stream in the Town’s budget. The fees are one part of the total utility costs that are charged to customers.
In 2018 the Town of Cochrane received $3.1 million in annual franchise fees.
