ATHABASCA — Town residents can expect to see higher fees on their natural gas bills in the New Year after Athabasca town councillors opted to raise Apex Utilites’ franchise fee by two percentage points for the next year.
The vote to increase the fee from 20 per cent to 22 per cent passed with a vote of 6-1 at council's Oct. 1 meeting.
“Last year we got far more than we thought we were going to get with our increase, so why do we have to increase it again this year?” said Coun. Edie Yuill, the one opposing vote to the fee bump. "This is sort of a senior town, and seniors don't get raises, or at least not very often."
The two per cent increase means residents will be paying an extra $19 for gas for the 2025 year on average, or around $1.60 more per month. Franchise fees are charged by the municipality to the service provider for the right to distribute to residents.
Councillors voted to raise the natural gas franchise fee from 16 per cent to 20 per cent for both electricity and gas in 2024. Athabasca’s franchise fees for electricity are at the cap set by the Municipal Government Act of 35 per cent.
In the request for decision included in the agenda package, Chief Financial Officer Jeff Dalley noted the town is estimating $380,000 in revenue from franchise fees for 2024, around $20,000 more than was anticipated in the budget.
But both Dalley and Mayor Rob Balay noted an increase in the fee rate does not always guarantee an increase in revenue for the town.
“You could have a really warm winter so you might not get this revenue, you could have a very cold winter, so revenue will go up,” said Dalley.
Coun. Sara Graling noted that while increasing franchise fees is one way to ensure tax-exempt organizations and properties are contributing to the municipality, the long list of charges Albertans see on their bills is getting more attention.
“There was considerable discussion at Alberta Municipalities about the very low cost of the actual energy we’re consuming from utilities, and quite a few comments about the fees.”
“Council may want to give consideration this year to making a point of not increasing those fees to maybe show that awareness of transmission and distribution and all the other fees that all of our taxpayers are paying,” she said.
In a breakdown of a $99.53 monthly gas bill from Aug. 19 to Sept. 18, actual costs for energy accounted for less than 2.3 per cent of the total charges.
More than 63.5 per cent was distribution charges, nine per cent went to the federal carbon tax, and over 13.5 per cent of the bill was the franchise fee. Transportation fees and property tax accounted for the remainder of the charges.
But in light of the beginning of the budgeting process for 2025, councillors like Dave Pacholok are focused on ensuring the books are as balanced as possible.
“My concern is that something is going to have to give, whether it be services or whether it be tax increase or whether it be franchise fees, or a combination of all three,” said Pacholok.
“This is, in my opinion, the least invasive way for gaining a little bit of ground,” he added. “It hits all parts of the community.”
Dalley estimated every one per cent fee increase would result in approximately $19,000 in revenue for the municipality, a cushion Balay said would help alleviate anticipated pressure in other areas of the budget.
“We’re going to have to have an increase in revenue somehow,” said Balay. “I think there will be a lot more on the other side, where we’ll be forced to cut expenses, and some services may have to be cut.”
“That’s approximately one per cent of taxes we won’t have to raise if we do this.”
In response to a question from Yuill, Chief Administrative Officer Rachel Ramey noted when the current council started its term in 2021, the natural gas franchise fee sat at 14 per cent.
Pacholok countered, noting inflationary pressures beyond the town’s control have also increased over the years: “It’s a fact of life that we need more money every year,” he said.
“Us increasing taxes and this is part of inflation,” noted Yuill. “We are the ones doing the driving, as well.”
