Council discussed what rate electrical users in Ponoka should pay for a local access fee and the creation of an electrical self-insurance reserve during its regular meeting on Nov. 24.
As an electric distribution owner in Alberta, the town is required by the Electric Utilities Act to approve a distribution tariff for access to the distribution system.
“The (Alberta Utilities Commission), they have found it necessary to have self-insurance but they didn’t put on a formula for calculating a rate,” said interim CAO Sandra Lund.
Administration stated that as an electric utility service provider, the town incurs “significant costs to build and maintain its electric system.”
Currently, the town maintains the electrical system through ongoing operation and maintenance expenditures and annual capital replacement programs.
Administration proposed that funds collected from the local access fee could be used to maintain the system by directing them to capital reserves, which would be used for unforeseen damage to the system.
Weather-related damage to electrical infrastructure is considered un-insurable by larger Alberta utility service providers and not all such damage is eligible for provincial compensation.
Administration proposed implementing a five per cent local access fee to come into effect on Jan. 1, 2021. The fee is estimated to generate $185,000 in 2021.
Coun. Clayton Nelson had some concerns regarding the electrical service fees that are part of the proposed bylaw, outlined in Schedule One.
The bylaw has received first reading and Lund says changes could be made if desired, adding that the rates had been discussed previously and hadn’t been updated for some time.
“It seems like it’s almost an extra tax on poor people who can’t afford to pay these things in the first place and I’m wondering how much money we really bring in and if it’s really necessary,” said Nelson.
Lund says the services fees in Schedule One are cost recovery fees for the electrical department to go in and provide services, sometimes after hours.
Nelson answered that there are around-the-clock shifts now so there shouldn’t be any ‘after hours’ and that services provided should be considered part of the provided service level.
“Somebody can’t pay their bills, so the department drives out and charges them $70 to give them a warning, comes out a month later because they still can’t pay their bills because now they have to pay that $70 and now puts on a loonie device for another $70 and then shuts off their power and then charges them $140 to reconnect it —I’m looking at this and thinking ‘How is this person ever going to get ahead?’
“We live in a little more protected world than a lot of people and we wouldn’t notice these charges because we’d never have to deal with them because everybody can pay their bills but people who can’t, this is very very prohibitive,” he said.
“The electrical department’s very well funded. Are we really making so much money on this that this is going to break that department?”
Manager of Finance Rita Odenbach answered that the average monthly revenue is $1,800, before costs, from all the services in Schedule One.
Coun. Ted Dillon says the rates just allow the town to recoup their costs for equipment and staff and if the individual doesn’t pay, then the cost would be re-distributed over all other rate payers.
Council passed second and third reading of the electrical distribution tariff bylaw and made a motion to have administration review the service fee rates in Schedule One and bring it back before council within 90 days.
Council voted to approve a five per cent local access fee to come into effect on Jan. 1, 2021.
Coun. Carla Prediger moved that administration include in the reserve policy an electrical self-insurance reserve to be used in event of a major disruption to electrical service. The motion carried.