BANFF – A declining reserve used to pay for Town of Banff projects and initiatives to deal with environment and climate change challenges pushed council to boost franchise fees on natural gas and electricity bills.
On Tuesday (Oct. 10), council voted 3-2 to increase the ATCO natural gas franchise fee from 31.2 per cent to 35 per cent to bring in another $97,000 for the municipality and increase the Fortis franchise fee on electricity to raise another $85,000 a year.
The money will go into the environmental reserve, which had a projected year-end balance of $426,856.
“The environmental reserve has a bit of cash flow challenge,” said Michael Hay, manager of environmental services for the Town of Banff.
Established in 2010, the environmental reserve is currently funded by the municipal franchise fee rider on residential and commercial electricity that is collected by Fortis Alberta on behalf of the Town of Banff.
The Town also receives revenue from a similar rider on residential and commercial natural gas bills; however, that revenue is not dedicated to any particular type of capital or operating expense and is put into general revenues.
Mayor Corrie DiManno said the Town of Banff’s environmental plans, including work to mitigate climate change, come with hefty price tags.
“The cost of not doing all we can is truly unfathomable, so we need to make sure we have a reserve that allows us to take on the projects, initiatives and programs that we know will move the needle on climate action,” she said.
“This reserve has punched well above its weight in the last two budgets. We’ve really used it to try and advance a lot of these initiatives without increasing tax support to do it… I think this is a very equitable way of trying to grow that reserve for the benefit of the whole community.”
Couns. Hugh Pettigrew and Ted Christensen voted against any increase in franchise fees.
“I cannot support an increase in any utility fees with the current cost of living increases that our residents are incurring,” he said.
“I am seeing a lot of people struggle making their payments on natural gas and electricity … I think our residents are having a hard time making ends meet in some places. I don’t think this is the place, the time to increase any of our fees.”
The environmental reserve has funded several initiatives from residential and commercial rebate programs, to solar rooftop panels on municipal facilities such as Banff Town Hall and the Fenlands recreation centre.
The balance in the environmental reserve was a healthy and stable $1.1 million at the beginning of 2021, however, some big spends over the last three years, such as wages for a municipal energy coordinator, a multi-facility LED lighting update, and expansion of rooftop solar panels at the Fenlands, saw it dwindle.
The reserve is forecast to be at $426,800 by the end of this year, dropping to $258,100 by the end of 2026 if the franchise fee rates had stayed the same.
Hay said the transition away from fossil fuels is a key goal of Banff’s environmental master plan and is supported by the rebate program and upcoming clean energy improvement program.
“Administration believes there is sound rationale for allocating a portion of natural gas franchise fee revenue to these programs via the environmental reserve, while the fee itself provides a disincentive to consume natural gas,” he said.
Council also acted on an administrative recommendation to boost funding in the reserve by reallocating a $90,000 expense for a transportation marketing campaign from the environmental reserve to be paid for by visitor paid parking revenue instead.
