Consent and access fee common in Alberta, but local councillors have varying ideas for alternatives

City councillors narrowly defeated the idea of adding a municipal consent and access fee to City of Medicine Hat power and gas customers, but it’s not the first time the idea has been raised, or defeated in Medicine Hat.

The practice is common elsewhere in Alberta, and involves private sector utility providers paying ongoing fees to use municipal rights-of-way for gas and power lines, then recovers that cost from consumers.

In Medicine Hat’s case, it would have brought in $6.3 million per year toward a goal of shrinking a budget gap of $12 million by 2022.

The fee would have been new to City of Medicine Hat, which owns both the power company and the rights-ofway, but is also where local government has worked since 2016 to replace once bountiful energy revenue in the municipal budget.

“It’s not a shell game — it’s transparent and there’s only one shell,” Coun. Robert Dumanowski said afterward, arguing the fee would be spread over a larger portion of the community, not just property owners.

Coun. Kris Samraj suggested an alternative, more straight-forward plan is to boost a tax increase from 4 to 7 per cent each year.

Mayor Ted Clugston says power plant profits — expected at $33 million this year — make the new fee unnecessary.

A similar proposal was made in budget talks in 2016, when the city wrestled with a $23-million shortfall. Council at the time defeated the consent charge by a 5-4 vote, while unanimously approving a capacity charge on electricity accounts.

At that time, current council members Clugston, Julie Friesen, Jim Turner and Brian Varga voted no, saying the increase was too great in an economic downturn.

Also, Clugston suggested the fee appear on bills, but be noted at zero as a way to advertise the advantage to local consumers of having a publicly-owned utility.

As proposed Monday, the fees would have been phased in over three years starting in 2019, and would still be less than similar charges in Lethbridge and Red Deer.

The effect in 2019 would be about $4.31 in total for gas and power per month for the average home. That compares to $21.54 in total per month in Lethbridge and $23.25 in Red Deer, this year.

When fully implemented, local homeowners would face an additional $13.97 per month in 2022.

Hatters currently pay about between $50 to $60 less per month than residents of those cities in non-commodity fees.