After more than 18 months of review, a new way of figuring out utility rates —which will be tied to consumption — is coming to Red Deer.
City council passed the utility rate policy on Monday, as well an amendment to the utility bylaw, which will see rates change on Jan. 1.
Since the move to more of a usage-based bill may affect some customers’ bills, Development Services director Paul Goranson said the intention is to lessen “rate shock” by implementing changes over five years.
The utility policy essentially illustrates the city’s current practice.
“It moves from more of a fixed fee to more of a variable or usage based fee,” said Goranson.
If someone looks at their residential wastewater bill right now, there’s a fixed fee there right now, so it doesn’t matter how much wastewater someone generates.
The bill will now include a line indicating fixed monthly charge, plus a usage based charge.
The fixed fee will go down for everyone, said Goranson.
“A portion of the wastewater bill (will now) be based on the amount of water that is used,” said Goranson.
Businesses already see wastewater use tying into their rate, he said.
“We are implementing a fixed fee on the commercial wastewater side,” said Goranson.
The new fees will not generate more revenues, but the idea is that it just changes how the customer sees their bill and that they have an opportunity to influence what their bill looks like, he added.
Council was largely pleased with the changes.
“Finally, citizens will have control over their bill,” said Coun. Paul Harris.
“It’s a start.”
Development services director Paul Goranson said the utilities are self-supporting so they are not supported by taxes. The challenge is determining what users pay, said Goranson.
Water and wastewater would be affected.
Goranson noted consumer rates should reflect use, promote conservation and be structured so revenue requirements can be met.
“Right now, there is little incentive to conserve,” he said.
Coun. Tara Veer said it’s good that people will be able to conserve water and see their bills decrease.
“I appreciate the transition period because I wonder how it will impact our large water users,” said Veer. “We have institutions like schools and industries and larger families — we want to make a positive change but we don’t want an unanticipated detrimental impact on others.”
Some people may wonder why their bills aren’t going down quick enough, some people with high uses will notice their bills are a lot more, said Goranson.
“One thing is we’re splitting this over five years,” he said. “People can adapt to it.”
Inflationary increases are still going to happen, Goranson said.