An agreement between ATCO and Red Deer County will make it less expensive for developers to hook up to natural gas, but will increase the monthly bill residents pay.
County council gave first reading to a bylaw granting the mayor and county manager authority to execute an agreement with ATCO Gas and Pipelines Ltd. to deliver natural gas to customers within the Hamlet of Springbrook.
Included in the agreement is a franchise fee rate of 19.5 per cent, which will be added to customers bills. County administration estimates the average resident will see an increase of $103.60 to their gas bill over one year, based on the average 2016 consumption.
The fee is to cover the cost of administering gas rights-of-way.
Treena Miller, County planning manager said that is typically going to relate to finding gas lines. ATCO is responsible for natural gas line maintenance.
The franchise agreement makes the lines easier to find because the lines are all operated by one company.
She told county council it gives developers incentive to move forward with the development and growth of the community.
While there is an increase to monthly bills, county administration pointed to larger savings on new connections. Rural natural gas connections can start at $7,800 for new hookups. With the franchise agreement, ATCO pays for the connection. And because the connection is in an urban setting through the agreement, it costs $700.
“I honestly think the boundaries should have been expanded out to where the growth areas will be,” said Mayor Jim Wood. “For us to be successful, sometimes a higher utility rate can inhibit growth.”
The agreement is for Springbrook existing boundaries only. The Crossroads Gas Coop Ltd. has the rights, and intends to keep them, for four neighbouring quarter sections, two directly north of the Red Deer Regional Airport’s runway and two south of the current hamlet.
Wood supported the agreement saying the hamlet is growing and the hefty fees associated with a rural natural gas hookup will inhibit growth.