Edmonton city council is scheduled to consider a proposal Tuesday to raise the city’s utility franchise fee from 17.65 per cent to 20 per cent, a change that could add an average $10,400 a month for owners of large buildings or entertainment complexes. Post-secondary institutions could face average monthly increases of $31,500, while hospitals could pay an additional $6,250 in utility bills. Provincial rules set 20 per cent as the maximum rate a municipality can charge.

The city’s utility committee sent the decision to council after a meeting Monday. Ward Karhiio Coun. Keren Tang, who chairs the committee, said more councillors should take part in the discussion. “I think there’s a much bigger conversation here,” Tang said. “Today, for the utility committee maybe about half of council was here - I think the other half should also weigh in.”

If council approves the proposal, the higher fee would begin Jan. 1, 2027. The charge is tied to electricity use, and Epcor passes franchise fees on to utility customers. Administration estimates the average residential user would pay $1.21 more per month, bringing the monthly fee to $10.47. The average monthly increase for a small commercial business would be $3.95; a medium-sized commercial business would pay an average of $22.55 in franchise fees.

The fee is paid by a utility company to a municipality for the right to use public rights of way for infrastructure, including roads. The revenue helps cover municipal costs when roads must be dug up to replace water mains or power lines. Edmonton currently receives about $110.8 million from the fee; setting it at a flat 20 per cent would generate an additional $14.8 million.

The fee does not affect Epcor’s day-to-day operations, but Edmonton Utility Watch founder Raf Tenderenda said the increase could affect households with lower incomes. He said such households may have older wiring and appliances, higher utility consumption than people in newer homes and less ability to pay for upgrades such as solar panels, high-efficiency furnaces or thicker windows.

“There was no public consultation,” Tenderenda said. “Lower income households can often have higher utility consumption than people living in new households while having less ability to invest in upgrades, like solar panels, high efficiency furnaces or (thicker) windows.” He also raised concerns about the impact on community organizations. “Think about the impacts for non-for-profit and community leagues - higher utility costs means less money available for programming and community services.”

Franchise fee rates and the reasons for collecting them vary among municipalities. The committee heard that Calgary uses its own formula to set a 19.4 per cent rate, and that municipalities are looking to franchise fees as another revenue source alongside property taxes as the costs of running local governments rise.

Airdrie, Okotoks, Spruce Grove and Stony Plain already charge 20 per cent. Beaumont and Cochrane charge about 17 per cent, Leduc charges 16 per cent, and St. Albert, Lethbridge and Red Deer charge about 15 per cent. Grande Prairie and Chestermere charge roughly 12 per cent, while Fort Saskatchewan and Strathcona County do not charge a franchise fee.

Based on reporting by Edmonton Journal.