Electricity – Franchise Agreement
In this decision the AUC considered an application from ATCO Electric Ltd. (“ATCO”) for approval of an electric distribution franchise agreement (“franchise agreement”) with the County of Stettler for the Hamlet of Botha. The AUC approved the franchise agreement as filed.
Statutory Scheme
Section 45 of the Municipal Government Act (“MGA”) and section 139 of the Electric Utilities Act (“EUA”) requires municipalities to receive AUC approval prior to entering into, renewing or amending a franchise agreement with a person to provide a utility service in the municipality.
Proposed Franchise Agreement and Franchise Fee Rate Rider Schedule
Under the proposed franchise agreement, the County of Stettler would grant ATCO the exclusive right within the municipal service area to provide electric distribution service and construct, operate, and maintain the electric distribution system. The proposed franchise agreement would have a term of ten years.
The proposed franchise fee of 0.00 percent would replace the current franchise fee of 3.00 percent, resulting in a decrease of $3.35 to the average monthly charge for an average residential customer. The proposed franchise fee would be less than the 20 percent franchise fee cap previously approved by the AUC. Under the franchise agreement, the County of Stettler would also have the option to change the franchise fee percentage annually upon written notice to ATCO and AUC approval.
The AUC found the proposed changes to the standard electric franchise agreement template provided clarity and were reasonable in the circumstances.
Conclusion
Pursuant to section 45 of the MGA and section 139 of the EUA, the AUC found the right granted by the County of Stettler to ATCO to be necessary and proper for the public convenience and that it properly serves the public interest. Consequently, the AUC approved the franchise agreement. In accordance with section 125 of the EUA, and given the approval of the franchise agreement in this decision, the AUC also approved ATCO Electric’s rate rider A of 0.00 percent.
