Electricity customers in Red Deer are not getting hit with costly fees by the city, which is an issue the province has identified in Calgary.
This week, the province announced it will introduce the Utilities Affordability Statutes Amendment Act to prohibit municipalities from using a variable electricity rate when calculating local access fees to help reduce the cost of utility bills.
Calgarians paid $240 in local access fees on average in 2023 because the City of Calgary calculated the fees based on a variable rate which can spike. But Edmonton, which calculates the fee in a different way, charged residents an average of $75.
Jim Jorgenson, the Red Deer’s utilities manager, said Red Deer is similar to Edmonton when it comes to local access fees. The average home in Red Deer is charged about $72 per year, or about $6 per month.
“We calculate based on the actual infrastructure or delivery costs,” Jorgenson said.
In 2024, Red Deer’s local access fee is 12.45 per cent of distribution and transmission charges, compared to 13 per cent in 2023.
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He said charges can vary slightly based on consumption for the use of the actual delivery system, but it is nominal in comparison to the matter identified by the province.
“The issues that have been flagged by the province are not issues in the city of Red Deer. Our practice appears to be consistent with where the province is trying to go in the industry.”
Amendments proposed by the province would standardize how municipal fees are calculated, and align with most municipalities’ current formulas.
Calgary Mayor Jyoti Gondek said the bill explicitly targets Calgary after council already started work to change the local access fees.
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Utilities consumer advocate Chris Hunt said the proposed changes provide more clarity and stability for consumers.
“Over the last couple of years many consumers have been frustrated with volatile Regulated Rate Option (RRO) prices which dramatically impacted their utility bills. In some cases, these impacts were further amplified by local access fees that relied upon calculations that included those same volatile RRO prices,” said Hunt, in a statement.
Alberta NDP Critic for Energy Nagwan Al-Guneid said it’s taken the UCP five years to realize it was a mistake to remove the price cap on electricity, and the changes will not help Albertans who have no choice but to remain on the RRO.
— with files from The Canadian Press
szielinski@reddeeradvocate.com
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