BONNYVILLE - The Town of Bonnyville has approved franchise fee increases for both natural gas and electricity, which will result in an average of $1 per month increase on natural gas utility bills for residents, and $1.75 on average for power per month.
While the increases are minimal, councillors expressed hesitation about the proposal during the Sept. 10 regular council meeting.
Coun. Neil Langridge said utility increases are a tough one for him to justify. A forecast from APEX Utilities shows a possible decrease of $40,000 in revenue for the Town of Bonnyville, because of changes expected to be made by the provincial government.
Langridge noted that it is hard to justify an increase in the fee when work is being done by the province to decrease utility fees for Albertans.
“It’s a tough one for myself,” he said.
Deputy Mayor Byron Johnson said he did not like increasing the fee, but costs are increasing “across the board” for the municipality.
Coun. Kayla Blanchette noted that the fee is collected from everyone, including organizations that are exempt from municipal taxes.
“The franchise fees are recovered from all consumers of electricity, not just taxable properties,” confirms information in the meeting agenda.
Under the terms of the agreement with APEX Utilities, municipalities can request an annual adjustment to the franchise fee paid to the Town, subject to the Alberta Utilities Commission (AUC) approval, according to information presented to council.
The current franchise fee with APEX is 20 per cent with a cap of 35 per cent. Administration recommended the fee increase to 21 per cent.
The franchise fee generated about $750,000 in 2023 and is estimated to generate $850,000 in 2024, but closer to $810,000 in 2025 if the fee stays the same, according to information presented to council.
“This Franchise Agreement grants APEX Utilities the exclusive right within the municipal service area to provide a natural gas distribution service, to construct, to operate and maintain the natural gas distribution system, and to use designated roads, right of ways, and municipal lands necessary to provide the natural gas distribution service,” reads the agenda.
The franchise fee has not been increased by the Town of Bonnyville since the agreement was signed in 2015.
Increasing the fee by one per cent is estimated to generate $41,000 in revenue, which would ensure the franchise fee revenue for 2025 from APEX is similar to 2024, heard council.
Council approved a motion to increase the APEX Utilities fee.
ATCO fee
Similar discussions took place when council was presented with a proposed increase for the ATCO franchise fee for electricity during the same meeting.
Since the current agreement was signed in August 2013, the franchise fee percentage has stayed at 6.8 per cent, according to information presented to council at the Sept. 11 meeting. This percentage has not changed since 2003.
“The current franchise fee is 6.8 per cent with a cap of 20 per cent. The franchise fee generated $569,827 in 2023 and is estimated to generate $596,622 in 2024 and forecasted to be $605,618 in 2025,” according to information provided by the Town of Bonnyville.
The average electricity bill of $250 would increase by approximately $1.75 per month for customers.
One of the reasons provided by administration to council regarding the need for an increase in the franchise fee was the increase in streetlights within the Town of Bonnyville. Although more energy-efficient lights have been installed recently, there are physically more lights, which results in increased costs for the Town.
A motion to approve the proposed increase to the ATCO franchise fee was approved by council.
