The convergence of an affordability crisis, skyrocketing energy prices, and Calgary’s Local Access Fee (LAF) have further put Calgarians in a difficult spot. Seeking to understand and want to know what Council has been doing in response? Read on...

There has been a lot of reporting on this issue over the summer as concern from Ward 12 and all Calgary grows. You can find in-depth reporting with a simple online search but be warned, not all of the reporting has genuinely attempted to unpack the complexities. It is far too convenient for many outlets to call foul, assume the worst, and feed the fear and frustration. Here is a great piece that can help provide nuanced context to the conversation:

Why are Calgarians paying so much for electricity lately? Here are answers to 5 common questions | CBC News

Today at Executive Committee the issue was again raised as part of item 7.3 2023 Mid-Year Performance Report, EC2023-0826. 

The Mid-year Performance Report is a window for Council and Calgarians into progress on the 2023-26 Service Plans and Budgets for the first six months of 2023. Of note, there was a report on the anticipated operating variance that The City ends up with yearly. The City isn’t allowed to run a deficit so there is always a positive variance but the size changes from year to year. This year the Local Access Fees (LAF) is collecting unusually large amounts due to Calgary’s LAF being connected to the variable energy prices (Regulated Rate Option or RRO) that have been at record highs recently. It is important to note that all the fees collected generally go back to Calgarians through the Reserve for Future Capital (Policy CFO03) unless otherwise directed by Council towards similar priorities outlined by Calgarians.

The unfolding convergence of an affordability crisis, skyrocketing energy prices, and Calgary’s LAF led me to ask Administration this question at Council on Dec 20, 2022:

https://pub-calgary.escribemeetings.com/Players/ISIStandAlonePlayer.aspx?Id=ee15894f-e5ab-4acf-b7db-d4aca78fa33f (Timestamp 28:15)

“The Local Access Fee is set by The City of Calgary and appears as a line item on ENMAX bills. My understanding is that the LAF distribution charge remains the same but the floating electric Regulated Rate Option (RRO) upon which the Local Access Fee is calculated has risen significantly in December. This has contributed to increases in monthly bills as energy prices rise higher than they have ever been before. For Calgarians wrestling with inflation on multiple fronts, is Council able to revisit the Local Access Fee contract with ENMAX?”

This question turned into a presentation from Administration, in closed session, on March 21st of this year. At this meeting, Council learned a great deal about our LAF and how it has performed well for Calgarians since 1974. The last review of the LAF in 2014, and the previous seven reviews, all came to the conclusion that the existing contract was best for Calgary. This is a fact; it was what was best for Calgary up until around 2008. Historically energy prices have been relatively low and stable which led to Calgary's Local Access Fee predominantly benefiting all Calgarians on their monthly bills. My concern, shared in that meeting, was that this benefit was inevitably marching towards becoming a problem and a big enough problem that Council might need to look at making a change. In that meeting, I also spoke to my displeasure with Admins rationale for keeping the LAF the same to provide “a natural hedge” for its own energy expenses. I don't believe The City has a solidly defensible position to continue with business as usual. I further believe it makes sense for Council to consider a change because removing the RRO from the LAF calculation will lead to more certainty for businesses and other community partners now and into the future by removing the variability currently attached to the LAF. 

Over the summer Mayor Gondek, responding to growing concerns in the community, issued a press release urging Administration to bring Council back together to discuss the need for change. This conversation is set to happen next Tuesday at Council (Sept 12, 2023). I will head into that conversation with an open mind as these decisions cannot be taken lightly. 

I was elected to advocate for Ward 12 and all that call Calgary home. We (Council) are looking out for you, have heard you, and will keep looking at every opportunity to make life better every day.

I will update this blog after the meeting on Sept 12th and encourage you to reach out with any feedback related to this ahead of Sept 12th. Email: [email protected].

Evan Spencer

Councillor, Ward 12