BOYLE — Boyle residents may see their natural gas bills rise come the new year after Village of Boyle councillors approved a 20 per cent franchise fee as a first step towards selling its natural gas utility to Apex Utilities.
During the Oct. 18 regular meeting, councillors voted 5-0 to set a natural gas franchise fee at 20 per cent, adding an average of $17.21 to resident’s monthly bills. Councillors also passed first reading of a new Natural Gas Distribution System Franchise Agreement bylaw 5-0, a requirement for entering into a distribution agreement with Apex. A motion to set the effective date for the increase as February 1, 2024 was carried unanimously.
“The money that we get from a fee at say, 20 per cent from the people that don’t pay us taxes will help us when we’re looking at budgeting, said mayor Colin Derko. “Whether they pay it via a privatized fee on gas or taxes … getting extra money from those non-ratepayers is going to help actual ratepayers,” he said.
The Village of Boyle has been the natural gas supplier for residents dating back to around 1957, according to CAO Warren Griffin. “That’s when the village first started bringing in gas service and they’ve been expanding the system within the village since then.”
An open house was held by the village Oct. 16, where 25 members of the public heard council’s reasoning for the sale of the utility, and shared feedback and thoughts on the distribution agreement with Apex.
Griffin noted rising costs and changing regulations for the maintenance of utility infrastructure is one of the main motivators for selling. “We know that roughly 75 per cent of the distribution systems within the village will be approaching the end of life in the next decade.”
An estimated cost of replacing the aging system comes in around $9.5 million, a cost not so viable for village ratepayers, but more-so for Apex, a company with more than 80,000 users in its customer base.
“(Apex) can renew our system over the next decade, and able to ensure that we have a reliable and sustainable natural gas delivery to our residents, which is very important to council,” said Griffin.
The rate change and service agreement will be advertised by Apex on behalf of the Village of Boyle for two weeks, followed by a 60-pay period for any publicly submitted petitions objecting to the distribution agreement. If public petitions are submitted, a plebiscite may be called prior to second and third readings for the franchise agreement bylaw.
If the bylaw isn’t passed before February 1, the effective date for the franchise fee will be pushed back until after the bylaw is passed and the distribution agreement is signed.
Higher gas bills, lower taxes
The new 20 per cent franchise fee is in line with the village’s electricity franchise fee, also at 20 per cent — the franchise fee cap for electricity. If the distribution agreement is passed, it will cap the natural gas franchise fee at 35 per cent.
During councillor deliberations Coun. Shelby Kiteley highlighted the prudence of adjusting the rate in one fell swoop. “We don’t have any numbers in front of us,” said Coun. Shelby Kiteley. “I just wouldn’t want to go too low and have to keep increasing over time.”
“We’ve been trying to stay diligent on not raising our taxes to try and keep (things) fair,” said Derko. “But at the end of the day we still need to run the village.”
