WESTLOCK — Town of Westlock residents won’t see any increases to their gas and electricity bills in 2025 after councillors voted to ‘hold the line’ on franchise fees, charged by Fortis Alberta and Apex Utilities Inc.
Town of Westlock CAO Simone Wiley noted the recommendation to the annual franchise fees at the Sept. 23 regular council meeting.
“Administration is not recommending an increase for this year, but the information on what the revenue collected in 2023 is in your package, as well as the projection for 2025,” said Wiley.
Councillors ultimately voted 5-0 to direct administration to notify Fortis Alberta that there is no change to the electric franchise fee as per the electrical distribution franchise agreement and notify Apex Utilities Inc. that there is no change to the natural gas franchise fee as per the natural gas distribution system franchise agreement.
Coun. Laura Morie was absent.
In a short presentation Wiley noted the current franchise fee rate for Apex is at 29 per cent and the current franchise fee rate for Fortis is at 16.25 per cent.
As per the franchise fee agreements with Apex and Fortis, they provided revenue amounts from 2023 and estimates for 2025 franchise fee revenues.
The total actual franchise fee revenue for Apex Utilities in 2023 was $753,900, while the 2025 estimated franchise fee revenue if the franchise fee remains the same, is $819,900.
The total estimated revenue in 2025 for Fortis Alberta is $786,600, while the estimated franchise fee revenue if the franchise fee remains the same, is $827,000.
Based on the current fee, the 2025 projected revenues combined would total $1.65 million
Franchise fees are calculated based on a percentage of revenues for distribution and transmission revenues collected by Fortis Alberta and delivery revenues collected by Apex Utilities Inc.
Last year town councillors increased franchise fees to include a 1.5 per cent increase for Fortis and a two per cent for Apex.
In a short discussion Coun.Murtaza Jamaly asked if the town pays franchise fees and how much and said he would be curious to see how the energy improvement program and incentives on solar panels impacts franchise fees.
Coun. David Truckey noted that while “to some people franchise fees feel like a hidden tax”, in reality he has viewed them as a fee “that offsets property taxation” and allows the municipality to generate revenue that would otherwise have had to be collected by taxation.
A franchise fee is a fee the utility companies pay for being allowed to access town lands to construct, maintain and operate distribution systems.
Municipalities often have franchise agreements in place to generate revenue from this type of fee. Apex Utilities and Fortis Alberta are the sole providers of natural gas and electricity within the Town of Westlock.
