What is a “Local Access Fee”?
A Local Access Fee
is a franchise fee that all utility companies (such as Enmax, Direct Energy, and etc.) collect from its customers and remit to a municipality. In Calgary, these fees contribute to the operating revenue of The City and support the budget; this enables The City to deliver municipal services.
How does it work?
The Local Access Fee is not a fixed cost; it is charged based on the amount of electricity used. The Local Access Fee varies based on the amount of electricity a customer uses and the Regulated Rate Option (the price of the electricity) set by the Alberta Utilities Commission. Our Local Access Fee is set at 11.11%, and has remained at this rate since 2004.
What does this mean?
The Local Access Fee that appears on a customer’s bill will fluctuate monthly, depending on how much electricity they use and the price set for electricity. This means that those who use a lot of electricity pay a greater share of the total Local Access Fee, while those who use less electricity will pay less. If we switched to a fixed cost system, this could see a large increase in monthly costs for those who use a little bit of electricity and a reduction to costs incurred by those who use a large amount of electricity, as the rate would no longer be tied to volume of use.
The Reason for the May 2014 Variation
12-days of transmission line maintenance are planned at two generation plants in Alberta. As a result, there will be an almost 50 percent decrease in electricity production from these plants in May. This anticipated drop in output will cause Alberta’s Regulated Rate Option prices
to be higher.
Historical Rates for Alberta’s Regulated Rate Option
When one looks at the historic rates, there are some months when the rate spikes upwards in a similar manner to what we anticipate will happen in May 2014
. The rates eventually drop down to the more average monthly rate of closer to .08 cents/kWh.
This content represents the personal views and opinions of the Ward Councillor and should not be taken as a statement of policy of The City of Calgary. The inclusion of any external content does not imply endorsement by The City of Calgary.