Calgary's extra fee on top of electricity prices expected to top $200M in revenue — again

The City of Calgary is expecting more than $200 million in revenue this year from the "local access fee" on Calgarians' power bills, blowing past what it had initially budgeted and far exceeding the amounts collected in previous years.

The surplus of cash flowing into city coffers comes as many Calgarians are facing higher power bills, and there are growing calls for city council to change the way it calculates the fee to reduce the burden on residents and businesses.

The Calgary Chamber of Commerce has issued an open letter asking council to review the local access fee formula, which, unlike in other municipalities, sees the fee rise and fall with the price of power itself.

"While both residents and businesses are affected, the impact on business is compounded," Chamber president Deborah Yedlin wrote.

Last year, Yedlin said businesses accounted for more than 63 per cent of local access fees collected in Calgary.

The increase in fees has also been affecting residential customers, says Blake Shaffer, a University of Calgary economist who specializes in electricity markets.

He says Calgarians have been paying several times as much as people in Edmonton in local access fees lately, due to the high price of power.

Edmonton, unlike Calgary, uses a fixed-rate formula to calculate its local access fees, so the amount it collects is not subject to the same swings.

"I don't understand why the City of Calgary does it this way," Shaffer said. "I've been trying to raise the alarms on this for several years now."

Shaffer says the issue has been getting more attention lately due to the high price of electricity and the size of the windfall the local access fees have been generating for the City of Calgary.

Calgary collected nearly $226 million in local access fees on electricity last year, up 76 per cent from the average over the previous decade.

This year, it had initially budgeted for $117 million in revenue from the fees but now expects the actual total could reach $210 million by year's end.

The surplus of cash was the subject of discussion when city councillors met last week and the formula itself is on the agenda for Tuesday's regular council meeting, when city staff are set to provide a report on the "impact of local access fees on affordability."

City staff are recommending that council approve further study of "what a potential change to local access fees could look like" and "what the budget implications to the City of Calgary would be."