May 28th, 2024

Province introduces legislation to lower power bills

By Lethbridge Herald on April 23, 2024.

The provincial government says it is taking action to protect ratepayers by introducing legislation to lower and stabilize local access fees.

The government is introducing the Utilities Affordability Statutes Amendment Act 2024, which if passed, will promote long-term affordability and predictability for utility bills in Alberta by prohibiting the use of variable rates when calculating the local access fees of municipalities, says the province in a Monday release.

Local access fees are basically taxes which are charged to electricity distributors by municipalities. These fees are then passed on to all of the distributor’s customers in the municipality, and appear as a line item on their utility bills, says the province.

Variable rates are volatile “which results in wildly fluctuating electricity bills. When municipalities use this rate to calculate their local access fees, it results in higher bills for Albertans and less certainty in families’ budgets. These proposed changes would standardize how municipal fees are calculated across the province, and align with most municipalities’ current formulas,” says the province.

“Local access fees are functioning as a regressive municipal tax that consumers pay on their utility bills. It is unacceptable for municipalities to be raking in hundreds of millions in surplus revenue off the backs of Alberta’s ratepayers and cause their utility bills to be unpredictable costs by tying their fees to a variable rate. Calgarians paid $240 in local access fees on average in 2023, compared to the $75 on average in Edmonton, thanks to Calgary’s formula relying on a variable rate. This led to $186 million more in fees being collected by the City of Calgary than expected,” said Lethbridge East MLA and Minister of Affordability and Utilities Nathan Neudorf in the release.

“Albertans deserve to have fair and predictable utility bills. Our government is listening to Albertans and taking action to address unaffordable fees on power bills. By introducing this legislation, we are taking yet another step towards ensuring our electricity grid is affordable, reliable, and sustainable for generations to come,” Neudorf added.

“By introducing legislation to help reduce the cost of utility bills, the government is continuing to follow through on its commitment to make life more affordable for Albertans. This is in addition to the new short-term measures to prevent spikes in electricity prices and will help ensure long-term affordability for Albertans’ basic household expenses,” said the UCP government in its release.

“Albertans need relief from high electricity costs and we can provide that relief by bringing in fairness on local access fees. We will not allow municipalities – including the city of Calgary – to profit off of unpredictable spikes in electricity costs while families struggle to make ends meet. We will protect Alberta families from the extreme swings of electricity costs by standardizing the calculations of local access fees across the province,” said Premier Danielle Smith in the release.

If passed, the province says the Act “would prevent municipalities from attempting to take advantage of Alberta’s ratepayers in the future. It would amend sections of the Electric Utilities Act and Gas Utilities Act to ensure that the Alberta Utilities Commission has stronger regulatory oversight on how these municipal fees are calculated and applied, ensuring Alberta ratepayer’s best interests are protected.”

Meanwhile, Opposition New Democrat utilities critic Nagwan Al-Guneid said in a statement the government’s proposed legislation is three years too late.

“The UCP are essentially closing the barn door after the horses have bolted, as it will not help Albertans who have no choice but to remain on the (default Regulated Rate Option),” said Al-Guneid.

The proposed legislation would also force providers to change the name of the Regulated Rate Option to the Rate of Last Resort, a rebrand the government announced last week to discourage Albertans from signing up for monthly rates that can be volatile.

The bill doesn’t dictate the exact charges consumers would see on their utility bills, but it would require municipalities to justify their fees and get approval from the Alberta Utilities Commission.

– with files from The Canadian Press

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Southern Albertan

Again, too little too late. How about bringing the cap back on electricity rates that the AB NDP had in place and the Kenney UCP removed? The highest power rates in the country could have all been avoided. Time will only tell if this legislation is effective.

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