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Council approves increase to ATCO and APEX franchise fees

Residents in the Town of St. Paul will be paying slightly more for their gas and electricity in 2023, after the Town of St. Paul council approved increases to the franchise fee.
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ST. PAUL - Town of St. Paul council approved increases to both the APEX and ATCO franchise fees during the Sept. 26 regular council meeting, following recommendations by administration being put forward. This means homeowners could be paying about $4 more per month on both utilities, as of Jan. 1, 2023, if the increase is approved by the Alberta Utilities Commission. 

“When we look at the growing concern of balancing a budget, administration ultimately is looking at how can we think of efficiencies, how can we be leaner, how can we capitalize on opportunities that exist and make sense," said CAO Steven Jeffery, speaking to town council about the proposed increases on Monday evening.

Administration believes the increase in franchise fees is an area the municipality could benefit, said Jeffery, adding, “It’s not a lot. It’s not the answer... but it is a step in the right direction.” 

Chief Financial Officer for the Town of St. Paul Mitchel Bachelet was also in attendance at the council meeting, clarifying and explaining the potential impacts of the proposed increases. When speaking to the ATCO franchise fee, Bachelet explains that the Town of St. Paul's fee is currently set at seven per cent. He offered comparisons to other municipalities, which shows Smoky Lake also at seven per cent, Vermilion at eight per cent, Vegreville at 10 per cent, Stettler at 11.10 per cent, and Bonnyville slightly lower at 6.8 per cent. 

A breakdown of some of the situations and how it would impact consumer bills was also presented to council. A residential consumer with 650 KWH usage over 30 days would see increases that range from $1.98 to $9.80, when considering a one per cent to five per cent increase.  

The recommendation by administration was a two per cent increase. 

Coun. Ron Boisvert made a motion for the recommended motion. He stated he was happy to see the information presented showing the impact of the proposed increase. 

Consumers will pay about $4 a month with a two per cent increase, heard council. Also, the ATCO franchise fee hasn’t been increased since 2003. 

“We did have a robust discussion around this as well,” said Mayor Maureen Miller, speaking to conversations that occurred at a previous committee of the whole meeting earlier in the month.

She noted that the franchise fee increase will spread the load out among all groups, including schools and provincial facilities, for example. Multiple facilities, such as schools and churches, for example, are tax exempt; therefore, increasing a mill rate when the Town does its budget process doesn’t affect those groups.

Council wanted to look at how to encompass some of the usage of those major facilities, which is why the franchise fee increase has been proposed.

“This actually shares the weight of the entire community,” said Miller, adding, the increase is fair and equitable to everyone.  

A motion for a two per cent increase on the ATCO franchise fees was carried, following discussions.

Funds gathered through the franchise fee goes back into the Town of St. Paul's general revenue.  

“It’s a block of revenue that assists the municipality in general operations,” explained Jeffery. “We need to build some reserves... if we’re not collecting on the front-end, how can we build a reserve?” he posed. Ultimately, those reserves could be used to fund projects, said the CAO.

The discussion then turned to the APEX franchise fee, which deals with gas consumption. Bachelet explained that the current fee is set at 22 per cent, and the cap is 35 per cent. 

Examples of other community fees presented to council included Bonnyville at 20 per cent, Stettler at 30 per cent, Two Hills at 23 per cent and Elk Point at 16 per cent. 

The impact on a normal residential user with a one per cent increase would be about 80 cents a month, and a five per cent increase would be about $3.98 per month. Administration recommended a five per cent increase for the APEX franchise fee.  

Coun. Sid Sood made a motion for the recommended increase.  

During discussions, Coun. Brad Eamon voiced concern about the proposed increase. 

“I do have some concerns about raising it five per cent. I do appreciate what we’re trying to achieve, but I am also concerned that we’re downloading a cost to homeowners... everybody’s facing challenges,” said Eamon. He noted he was concerned about using the franchise fees to build reserves or balance a budget. 

The total amount collected through the APEX franchise fee would increase from about $634,000 to $778,000, with the proposed increase. 

Administration explained they chose five per cent for APEX because it came to a similar dollar amount as the ATCO increase, per bill for the average resident, which is $4 a month.

The APEX franchise fee hasn’t changed for seven years.  

The motion for the five per cent increase was carried.

Changes still have to be approved by the Alberta Utility Commission, along with other processes taking place.

Janice Huser

About the Author: Janice Huser

Janice Huser has been with the St. Paul Journal since 2006. She is a graduate of the SAIT print media journalism program, is originally from St. Paul and has a passion for photography.
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