If you pay for electricity and gas, you pay a fee called a “Local Access Fee” or “Franchise Fee.” In Calgary, these fees happen to be relatively high, particularly on electricity bills – about 75 percent higher for the average household compared to Edmonton. Yet, many consumers don’t know why these fees exist or how they are calculated. It is my view that, when a tax or fee is levied on Albertans, it should be clear how it is determined and why it is charged in the first place. Likewise, if it increases, it must be easy to judge whether such the increase is warranted; to this end, I am sponsoring a Bill in the Legislature, Bill 203, the Municipal Government (Local Access and Franchise Fees) Amendment Act, 2010.

In Alberta, municipal governments have the authority to charge utility companies a fee in lieu of property tax for use of their lands to construct, maintain and operate the systems that deliver power and energy to our homes – poles, wires and pipelines, so to speak. This arrangement translates into the local access and franchise fees paid by consumers on utility bills. What most Albertans don’t know is that the formula used to calculate these fees varies from municipality to municipality.

In Calgary, access fees vary with the total amount of your power bill. So, when the price of electricity goes up, so does the access fee, despite the fact that the costs to the city are largely fixed. Other municipalities base their fees on the cost of delivery, which varies in each area and, therefore, makes it difficult for consumers to easily compare their rates with other municipalities.

With Bill 203, I have proposed a uniform fee that would be based on the quantity of energy consumed, where the only difference between municipalities would be the rate they choose to set. Consumers would then have the ability to accurately compare their fees to those in other municipalities, while the municipality also retains its autonomy to set the rate as they see fit. If Council decides to set a higher rate, they would at least have to justify why, rather than hiding behind a formula that does not allow for comparability. Moreover, municipalities would be required to report clearly and concisely the revenue generated from these fees in particular so citizens and voters can see the exact amount of revenue being collected. Rate changes would also have to be advertised as least 90 days in advance.

When it really comes down to it, Bill 203 is about accountability and transparency. At the very least, this Bill will facilitate a productive and informative discussion about these fees, their purpose and their background. When tax dollars are at stake, Albertans deserve to know how they are collected and why.