Edmonton residents will have to contend with higher power bills in the new year after city council voted Tuesday to increase the municipality’s electricity franchise fee.
The city charges EPCOR the fee for the exclusive right to distribute power in Edmonton, a cost that is ultimately passed down to utility ratepayers.
Ward Karhiio Coun. Keren Tang put forward the motion to increase the fee — which is calculated as a percentage of total distribution charges on an electricity bill — from 17.65 per cent to 19.4 per cent.
The new fee rate will come into effect on Jan. 1, 2027, according to a city administration report.
The City of Edmonton’s utility committee had initially proposed an even higher increase to 20 per cent, which is the maximum limit allowed by the Alberta Utilities Commission.
The report said the initial proposed 20 per cent increase would have translated to an increase in monthly power franchise fee from $9.06 to $10.27 for a typical residential customer in Edmonton.
The proposed 20 per cent increase would have resulted in a projected rise in franchise fee revenue by $14.8 million in 2027, raising total franchise fee revenue to $125.6 million, the report found.
Tang said the franchise fee is one of the “limited ways” the city can generate revenue, and she highlighted that the increase would align the city’s rate with Calgary’s, which is 19.4 per cent.
“I find it a bit more defensible for me to have it more in line with some of the other cities rather than just arbitrarily at a maximum.”
A jurisdictional scan conducted by city administration found that the electric distribution franchise fee for municipalities like Fort Saskatchewan, Leduc, Stony Plain, St. Albert, Strathcona County and Calgary ranges from zero per cent to 20 per cent. (City of Edmonton)
The motion passed eight to five with Councillors Erin Rutherford, Karen Principe, Thu Parmar, Mike Elliott and Reed Clarke voting against it.
Ward Anirniq Coun. Rutherford said she is worried about this rate change adding to affordability challenges Edmontonians are already facing.
“We have to think about what are those unintended consequences … once we make this decision,” Rutherford said.
Ward pihêsiwin Coun. Mike Elliott said that while the fee increase may seem small, it can have a larger impact on Edmontonians in the long run.
“I know we may look up and say, ‘Well, it’s the price of a cup of coffee for the increase potentially for the average resident,’ but I also know a cup of coffee adds up over time.”