Residents, businesses zapped with power bill increases

Power bills are rising slightly for Red Deer residents, and a lot more for businesses, starting Jan. 1.

Power bills are rising slightly for Red Deer residents, and a lot more for businesses, starting Jan. 1.

On Monday, city council unanimously approved changes to the local distribution tariff, a fee that the Red Deer’s Electric Light and Power Department uses to recover its cost for running the utility system. Increases are also being made to the local access fee or franchise fee.

This is the third time in a year that Red Deer will have experienced power bill increases.

Residents on average will see charges increase $1.27 per month. Their provincial rebate will decrease to $2.48 a month from $4.04.

Small commercial customers, like a corner store, will see average increases on their monthly bill rise $3.95 a month. Their provincial rebate will similarly decrease to $8.28 a month from $13.46.

General service customers, like a fast food outlet, will experience an average increase of $35.18 on their monthly bill. The provincial rebate will dip to $103.50 from $168.25.

Large industrial/commercial customers on average will have their bills rise by $455 a month. The provincial rebate for them will slide to $1,656 from $2,692.

Department manager Ligong Gan said the changes in consumers’ bills in 2010 are due to several cost drivers.

For one thing, the department is experiencing a cost increase of $360,000 in running the system. This translates into a 1.2 per cent increase to the distribution tariff. The money collected from the distribution tariff increases will go back into the Electric Light and Power Department’s budget.

The higher power bills are also due to changes with the local access fee or franchise fee. The municipality charges this fee to the electric utility so it can use portions of the road, right-of-way and other city-owned properties and lands in its delivery of power. In turn, the electric utility passes the cost onto customers.

The current local access fee is set at 25 per cent to 31 per cent, a percentage used for the natural gas utility.

“This results in an increase in the local access fee to 3.7 per cent for the average household,” Gan said.

The increase in the fee will generate about $921,000 extra for general coffers.

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