Varcoe: Calgary wants a jolt to take speedy motion on its hovering energy charges

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Metropolis corridor can transfer quick, when it needs.

And when it doesn’t, a digital stopwatch isn’t wanted to trace its progress — a sundial is perhaps extra applicable.

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Metropolis council agreed Tuesday to evaluation and look at attainable modifications that would present reduction to Calgarians by altering the way in which it fees residents and companies a neighborhood entry charge on their month-to-month electrical energy payments.

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The town has been gathering a large windfall from the charge over the previous yr. It’s due, partly, to scorching energy costs and the way the native franchise charge (as it’s usually known as) is structured.

Metropolis administration suggested councillors throughout the assembly that it could take greater than only a few weeks or months to conduct the evaluation after which make all the mandatory modifications.

“It can contain the negotiation of utility agreements and securing regulatory approval from the Alberta Utilities Fee,” Chris Stewart, the town’s director of company planning and efficiency, advised the assembly.

“We’d estimate {that a} timeline of 18 months to 2 years for implementation could be possible.”

That didn’t go over so nicely with some councillors.

Mayor Jyoti Gondek
Mayor Jyoti Gondek instructed metropolis administration in August to discover a change to entry charges on electrical energy payments. Azin Ghaffari/Postmedia

After they met behind closed doorways, council determined to speed up the timing on reporting again and contemplating what any potential modifications would possibly appear like, bumping it from the top of March (as was initially proposed) to December.

That’s useful.

But, it’s nonetheless not clear when any precise fixes is perhaps carried out to assist shoppers and companies combating greater power payments.

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Mayor Jyoti Gondek mentioned it’s exhausting to say if the 18- to 24-month timeline will nonetheless be required, noting the town can’t merely make modifications by itself.

“I’m completely happy that we’re going to be transferring ahead, taking a look at options and at choices. I’m upset it took so lengthy to get right here as a result of too many individuals believed that establishment was going to be fantastic,” Gondek mentioned in an interview.

“It isn’t the Metropolis of Calgary that’s going to delay this by 18 months. It’s the truth that no matter we determine to do — if we determine to make any significant modifications — it’ll first must get accepted . . . That’s why council must get transferring.”

I get it, it is a difficult concern.

Nevertheless it certainly will be executed lots sooner than in 24 months.

Excessive charges are pounding Calgarians immediately.

Take the case of WinSport, a non-profit neighborhood group that expects to pay $400,000 this yr, greater than double the $160,000 paid in 2020.

“Householders, small enterprise, massive enterprise, not-for-profits — we’re all beneath unbelievable strain with inflation,” WinSport CEO Barry Heck mentioned Wednesday.

“There actually needs to be a way of urgency right here.”

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Barry Heck
WinSport President and CEO Barry Heck on the Markin MacPhail Centre on Aug. 2. WinSport paid $160,000 in 2020 for franchise charges — a determine that shot as much as $333,000 final yr. Picture by Azin Ghaffari /Postmedia

The Calgary Chamber of Commerce, which issued an open letter to council final week supporting a evaluation, welcomed the upcoming examination.

“We’ve seen metropolis council and all ranges of presidency have the ability to transfer in a short time when there may be an urge for food. We noticed that by way of COVID,” mentioned Ruhee Ismail-Teja, the chamber’s director of coverage.

Municipalities in Alberta are permitted beneath provincial legislation to impose a charge in lieu of property taxes and right-of-way entry charges on utilities. (In Calgary, the town owns Enmax Corp.)

Not like different cities, Calgary’s franchise charges are partially linked to the regulated fee possibility (RRO) for energy costs, though most shoppers aren’t on this default electrical energy fee, however have as an alternative signed up for fixed-price contracts.

The RRO is about every month, primarily based on wholesale electrical energy costs, and it’s accepted by the Alberta Utilities Fee (AUC).

When it will increase, so does the income from the electrical energy franchise charge, which is collected by Enmax and handed alongside to the town.

Since 2021, the RRO has shot up by 246 per cent.

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In response to the town’s mid-year monetary efficiency report, it’s anticipating to see a further $100 million in unbudgeted income in 2023 from native franchise charges for electrical energy and pure fuel.

Final yr, the town initially budgeted to gather $128 million from electrical energy franchise charges. As an alternative, it garnered nearly $226 million. (This yr, it’s budgeted to obtain $117 million.)

Electrical energy guide Sheldon Fulton estimates the town is on tempo to obtain greater than $300 million this yr.

He believes the matter is clearly throughout the metropolis’s energy to repair.

“They’ll change the formulation,” Fulton mentioned. “They’re merely developing with methods to procrastinate.”

Illustration for June 30 oped
A Calgary home-owner this yr pays an estimated $260 for the native charge, nicely above the $79 charged in Edmonton, estimates the senior director at of Vitality Associates Worldwide. Picture by Gavin Younger /Postmedia Community

In a press release, the AUC mentioned it could have to approve any modifications made by the town of Calgary in its methodology of franchise charges.

However the final time the town and Enmax utilized for such approval was in 2017 — and the regulator accomplished its evaluation and issued a choice in lower than three months, AUC officers famous.

The province can be contemplating phasing out the RRO, which might require a change domestically.

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Councillors agreed the town would report again in December on what potential modifications to the franchise charges would possibly appear like and any price range implications.

It can additionally come again in November with choices to create an affordability program for Calgarians, earlier than making any modifications to the franchise charges.

Gondek mentioned the small print of such a program have to be labored out, because it could possibly be a “flat-out rebate program” to one thing that targets help to these going through the best want.

The hovering charges have additionally grow to be a priority for metropolis companies.

Thomas Glenwright, senior director at consultancy Vitality Associates Worldwide, mentioned a small industrial buyer within the metropolis pays a mean of $1,033 in native electrical energy franchise charges this yr, in contrast with $347 in Edmonton.

Adjustments to Calgary’s charge construction are “lengthy overdue,” and he famous metropolis council may merely undertake the formulation utilized in Edmonton or different Alberta cities.

“I might urge council to maneuver as rapidly as they will on this,” Glenwright mentioned. “There are easy options on the market.”

Chris Varcoe is a Calgary Herald columnist.

[email protected]

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