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Franchise fees going up

Two per cent increases approved for Fortis and Apex

ATHABASCA – Residents will soon see both their power and gas bills, after Athabasca town councillors approved a two per cent increase in franchise fees for each utility. 

At the last meeting of their four-year term Oct. 5, council members discussed the franchise fees pertaining to Fortis and Apex, as they do every year, and agreed with the recommendation from chief financial officer Jeff Dalley that a two percent increase for each would be sufficient to offset to make up for lower than budgeted revenues. 

Municipalities charge utility distributors a fee for infrastructure like pipelines and transmission lines on municipal land. Fortis, for electricity, and Apex, for natural gas, then collect those fees from consumers, who pass them onto the municipality. 

Both fees were increased from 10 per cent to 12 per cent in 2021, and will now be increased to 14 per cent, which will make for a $21.90 increase over the course of the year for the average Fortis customer, while the average Apex customer will see their bills rise by $17.31 per year. 

“The bottom line based upon current 2021 estimated delivery revenues, each one per cent would provide the town an additional $29,500,” said Dalley, referencing the Fortis fee specifically. 

The estimated franchise fee revenue from Fortis is $317,000 — $12,250 lower than budgeted, he added. 

For Apex, the estimated franchise fee revenue for 2021 is $208,703 —$2,500 lower than budgeted revenue. For every one per cent added to the Apex fee, $16,875 is generated for the town. 

Mayor Colleen Powell noted nearly 30 per cent of the buildings in Athabasca do not pay taxes, but everyone is on the hook for water, garbage collection and franchise fees. 

Coun. Rob Balay agreed. 

“This is a fair tax because it gets everybody, it gets all the institutions, and it gets those that don't pay municipal tax,” he said. “With all the downloading from the provincial and, to some degree the federal government, onto municipalities, our option is if we're going to cut spending, we're going to have to cut services.” 

Coun. John Traynor did not agree, saying there is a reason many of those institutions don’t pay taxes, and that’s because most are community services. 

“To be quite honest, I'm not for any sort of hike in any fees at all, it just disappoints me that we try to hide it away in services that people require,” he said. “It never seems to end, and I think we've got to look at different ways, and I ask the other council coming in, to look at other ways to save money instead of putting it on the taxpayers and users of our franchises and so forth. It bothers me.” 

Coun. Tannia Cherniwchan put the motion to accept the Fortis fee increase forward. The Apex increase was approved in a second motion. 

“No matter what, we have services that we must provide. We can only get it through taxation, or another way of course is through the franchise fees. So, you cannot say you're not going to do it at all because that's ridiculous,” she said. “Common sense does say that we have to get it somewhere, so if we're not going to raise the taxes, which we've been against for four years, then we have to do the franchise fees. It's either one or the other. 







About the Author: Chris Zwick

Athabasca Advocate editor
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