Natural gas rates may see slight increase

Times Reporter  

 

Director of Corporate Services Mel Tiede brought forward a proposal from ATCO to increase the natural gas franchise fee at the Sept. 3 town council meeting. 

“The franchise fee is the rent that the town receives from utility companies for having infrastructure such as pipelines on Strathmore town land,” said Tiede.

Currently the town has an 11.18 per cent natural gas franchise fee. Rates in place by other municipalities range from five per cent up to 35 per cent, with 35 per cent being the maximum allowable. 

“There’s only one community on the list with no natural gas franchise fee and that is the community of Nobleford,” said Tiede. 

He further explained that the average of the listed fees is 16.62 per cent, with the medium percentage at 15 per cent.

Based on an average of 120 gigajoules annual usage of natural gas by the average residential user, residents in Strathmore are paying $3.95 per month or just under $48 annually for the present franchise fee. Each one per cent increase would cost the average user .35 cents per month.  Tiede recommended that council consider raising the fee to 16.62 per cent.

“This would raise an additional $127,000, approximately, in the 2015 budget year and assist in balancing the budget we’ll be looking at shortly. This would cost the average residential user an additional $1.90 per month to increase the franchise fee from 11.18 per cent to 16.62 per cent,” said Tiede.

The $1.90 would be in addition to the $3.95 the average user is paying. Larger homes would pay more and smaller ones would pay a little less than that dollar figure. 

“I know it’s only $1.90 a month, or $2 coffee a month, to me it just seems like we’re taxing, and we’re taxing and we’re taxing. I know it’s $70 a year, but $70 a year accumulates to be quite a bit of funds … I’m much more personally in favour of increasing the taxes than I am nickel and diming our residents so therefore I cannot support this,” said Councillor Brad Walls. 

Councillor Pat Fule said while he could see Walls’ point, council has worked hard to keep taxes down the past term.

“The other side of that is we and the previous council had worked really hard to keep taxes, property taxes to as best we can, and we have also tried to put in a lot of amenities and improvements to help this town. I think we’ve got a mindset in the town now that people are willing to see slight increases if they know they’re getting something for their buck,” said Fule. 

He would like to see council direct admin to bring the increases because it helps bring Strathmore in line with other communities. He said it seems fair to be on par, and the fee does raise income and revenue so the town can do projects like pathways and parks. It is a small way to generate income.

“We are facing some projects that do have to be done to make this town better and I think this is one way where it doesn’t hurt people too much and yet it still brings us some much needed revenue to try and do projects,” Fule. 

Councillor Rocky Blokland said he likes both sides of the argument, but stated that even in the previous council he personally would rather look at the big property tax numbers rather than hikes through utilities. Walls moved to accept the proposal as info, a motion that was defeated. Fule then made a motion to have administration being forward a bylaw to increase the natural gas franchise fee. Councillors Blokland and Walls were opposed. Councillors John Rempel and Bob Sobol were not in attendance.