'It's become gouging:' Small towns ask Alberta Utilities Commission to evaluate increased fees

Two Alberta towns are speaking out about the impact rising utility fees are having on residents, businesses and non-profits.

In recent letters to the Alberta Utilities Commission, the mayors of Taber and Fox Creek said infrastructure and other fees on natural gas and electricity bills are getting too high.

"This concern is being felt throughout public and private spheres, and we are urging the commission to take serious note," reads the letter from Taber Mayor Andrew Prokop. 

Over the last decade, Alberta utilities poured billions of dollars into upgrading the provincial grid, local wires and pipes throughout the province. It built high-voltage transmission lines and other projects, which increase reliability and prepares the province for growth — but some say the network has been overbuilt. 

In Alberta's regulated system, all those costs are now going back to the consumers in fees.

Over the past two years, Mayor Prokop says, the residents of his town — along with everyone across Alberta — have been hit hard by financial difficulties caused by pandemic-related job loss and inflation they can't keep up with.

He said the increased fees don't sit well with him.

"To me, they're just trying to sell the sell, and they're in the business to make money," he said in an interview. "I think it's to the point where it has become gouging."

Earlier this month, CBC Calgary looked at the fees listed on bills sent out by ATCO and Enmax. The fees have roughly doubled since 2010. The small town mayors say that appears to be the case with most providers their residents deal with, too. 

Fees are set by the Alberta Utility Commission through a quasi-judicial process. Utility companies bring proposals and capital projects with evidence to support why these costs are necessary. The commission rules on how much of the costs are legitimate and what can be charged back to the customers.

That includes the cost of business plus a profit for the power, gas and other utility companies, said commission spokesperson Geoff Scotton.

"The role of the utilities commission is determine rates to ensure that they reflect legitimate, and only legitimate, costs of delivery of the service … including a reasonable and competitive return on investment."

'Handful' of small towns raising concerns

CBC News viewed letters from Taber and Fox Creek, but Scotton said the commission received letters from a "handful of smaller towns across Alberta." 

He argues these towns could bring fees down themselves by reducing their municipal franchise fees, another common fee on each utility bill.

Each municipality sets that fee itself, and rates vary between zero and the maximum allowed by the province for electricity, 20 per cent.

That money goes right to each town or city budget.

"That's something municipalities can look at," said Scotton.

Taber's franchise fee is 18 per cent, down from 20 per cent in 2019. The fee adds roughly $1.5 million to the town's $25-million annual budget.

But Prokop was not impressed with Scotton's suggestion.

"They're putting the onus back on the municipalities, which isn't completely fair and reasonable," said Prokop. "Everything's a hit. No matter what you reduce, it is a hit and you have to offset somewhere."

Likewise, Fox Creek Mayor Sheila Gilmour says lowering franchise fees would simply result in a loss of revenue for the municipality — which would impact the services provided to the community or force them to raise property taxes.

Fox Creek's fee is 6.5 per cent, up from 5.5 per cent in 2019.

"This action would force our municipality to look elsewhere to obtain these funds and would ultimately make lowering the franchise fees meaningless," she said. "The only way around this, where Albertans benefit, is for the utilities commission to acknowledge that there is an excess in fees associated with utility costs and to rectify it by having them reduced."

Non-profits feeling the pinch

Gilmour said the reason the town spoke up was because it's hearing from non-profits and other community organizations that the fees just aren't sustainable anymore. 

That includes the Peace Library System and its 45 rural library branches. Fees make up more than 50 per cent of their utility bills.

"We're already overbudget and it's May," said library chief executive Louisa Robison. "That's going to start impacting services for next year."

She is worried about the cost and that tight municipal budgets could mean cuts there, too.

"If something has to get cut from municipal budgets, it's almost always going to be sports, arts and libraries," she said.

Utility companies make money; she says there must be some other way these companies can lower the fees. 

"When public money is being used to pay fees to private corporations that regularly report earnings in the millions and occasionally the billions, it's worrisome."

Provincial rebates

In a statement, a spokesperson for the Ministry of Energy said the province recognizes Albertans need relief from high utility costs. It recently announced rebates of $150 applied to bills, expected as early as June, and paused collection of the provincial fuel tax. 

The spokesman said the province is also working to modernize Alberta's electricity grid through recently proposed legislation. This would enable companies to generate and store their own electricity and sell excess back to the power grid.