Gas revenue for the Town of Ponoka appears to have been at low rates compared to other communities.
To combat that and to gain some extra revenue, town council approved a three per cent rate hike with ATCO Gas. The decision was made May 23 during the regular meeting after hearing that the town has a franchise fee rate of 17 per cent.
Council approved it based on a request to be a slight increase.
“These are routine approvals as long as the franchise agreement is not more than 35 per cent,” explained CAO Albert Flootman.
The town’s current revenue from the franchise fee is $350,000.
Mayor Rick Bonnett explained that the recommendation came from the town’s Utilities and Environmental Committee.
Revenues from the fee go into the town’s general reserve.
Council also approved a motion to enter into a 10 year agreement with ATCO Gas, something that had come up for discussion a few years ago. The town’s contract was expired and was operating on an annual basis with ATCO and it was recommended that agreement be approved at the same time.
Electrical revenue considerations
Since the Town of Ponoka owns the distribution of electricity in town limits, the utilities committee requested that increased rates be looked into.
Council approved administration look into the town and create a policy that sets rate parity with Fortis. There is a disparity between the town’s and Fortis’ rates, explained Flootman.
Residential rates sit at 12 per cent less than Fortis, however, commercial rates sit at 4.8 per cent higher than Fortis.
“What we’re wanting to move to is a standard rate,” said Flootman, adding that a proper policy is needed to make that happen.
He said a standard rate, regardless of customer class, should be used. Ideally it will be plus/minus five per cent of Fortis rates. A concrete policy will ensure that the town follows those steps.
Part of the concern is the Alberta Utilities Commission does not like to see extreme rate increases to customers.