19/0612015 CITY OF CALGARY RECEIVED IN ~~~---+--------------------------------,-, Gas, Power and Telecommunications Strategic Planning Session 2015 June 22 C2015-0543 CALGARY". Acronyms • GPT - Gas, Power and Telecommunications Committee • AUC - Alberta Utilities Commission • UCA - Utility Consumer Advocate • MCAA - Municipal Consent and Access Agreements • RRO - Regulated Rate Option (regulated price for electricity) • GCFR - Gas Cost Flow-through Rate • ROW's - Rights-of-Way • CRTC - Canadian Radio-television Committee • FCM - Federation of Canadian Municipalities • ILECS - Incumbent Local Exchange Carrier • CLEC - Competitive Local Exchange Carrier • TUC - Transportation Utility Corridor Pago 2 II "."""""" _'SIR",,,,> THE CITY Of CALGARY II J 9/0612015 Purpose of Strategic Planning Session • Provide awareness of what GPT does: Utility regulation Oversight of Franchise Fees Municipal Consent and Access Agreements • Telecommunications Page 3 0>0,,,,,,, II II "'" _ES_TEO THE CITY OF CALGARY Calgary's GPT Committee • Started in 1971 to provide Council with the ability to take action on regulated utility issues. • GPT is unique in Canada and benefits The City and Calgarians • Mandate: To participate in regulatory proceedings as necessary to protect the interests of The City. • Council determines what is in The City's interest Utility Consumer Advocate cannot fully represent City's interests PIge4 c,.,,,,"', II II OS< U"'ESTR,mD THF CITY OF CALGARY 2 1910612015 Gas, Power and Telecommunications Committee • Chair Councillor Andre Chabot • Vice Chair Councillor Joe Magliocca • Members Councillor Druh Farrell Councillor Sean Chu Councillor Shane Keating Mayor Naheed Nenshi, Ex-Officio CFO Eric Sawyer (non-voting) PBge5 C20"..,.' II I5C UNRES'RICTED THE CITY OF CALGARY II GPT Approval Process ISSUE: ELECTRICITY I ISSUE: USE OF THE ISSUE: DARK R8RE I NATURAL GAS - UTlUT1ES OTY'S RIGHTS-OF-WAY SUPPORT STRUCTURES­ TElECOMMUNICATIONS REG AFF.tJRS OS DeCISi on to recommend Dects!on to recommend IT intervention al AUC mterventlon Dec!SK)f") to recorM'!end mterventlol1 at CATe RECOMMENDATIONS INCLUDED IN REPORT AND AGENDA Gas Pow. & Telecommunications CornrnittM GAS POWER & TELECO ....UNICATION CO" RECOMMENDATIONS APPROVED/REJECTED BY GPT AS SUBWTTED BY ADMlNlSTRAT10N • GPTto "I'I'IOfIitOf and~" _ in ~ proceecIng. _ onty kI protKt die int.... of The City of c.Ipry In ... ,ote of MUnicipM 90¥1" (Procedw. ByIMr, L 21(2» Page 6 II ~~"~'::~'"KT(O THE CITY OF CALGARY II 3 19/0612015 Utility Regulation • GPT has oversight of the City's participation in regulatory proceedings of the Alberta Utilities Commission (AU C) and the CRTC Page 7 c,..~ ... , II II "" u... ,sr''':lED THE CITY OF CALGARY Utility Regulation • Utility Rates matter to Calgarians • Many Calgarians pay more for utilities than property taxes. Why the City participates in regulatory proceedings: • Just and reasonable utility rates • Protect franchise fees • Policy consultations to achieve best regulatory structure • Municipal input on appropriate infrastructure • Calgary economic competitiveness Page s II ~'::'~T'OCT'D THE CITY OF CALGARY II 4 19/0612015 The Regulatory Process Application The Alberta Utilities Commission -Rate increases -Facility appro\als -Utility Application -Intervener Information Requests -Intervener Evidence -Utility Information requests -Oral or Written Proceeding -Reply Arguments -Decision -Review and Variance -Court of Appeal Consumers: Residents, business, farms, industry, municipalities Page' c,." ... , os.< V«<lES'.''''D II II THE CITY OF CALGARY Franchise Fees • Franchise Fees - Fees charged to electricity, natural gas and water utilities providers on the provision of utility services within Calgary Pago 10 II ~'~';;~'" 'CTfU THE CITY OF CALGARY II 5 19/0612015 Franchise Fees • Authorized under Section 360 of the MGA. • Franchise Fees are paid by the electricity, natural gas and water utilities in return for: Payment in lieu of property taxes; Use of The City's Rights-of-Way (ROW) Granting of a franchise within Calgary % • Rate is 11 .11 % on utility bills (10 of total bill) • Delivery and energy costs both included in City franchise fees Cost of energy based on regulated rates Page 11 II ~'~~"""TEO THE CITY OF CALGARY II Franchise Fees • Benefits of The City's methodology Higher amount of franchise fee revenue Franchise fee revenue rise and fall linked to Calgary's economy No need to adjust franchise fee rates annually Franchise fee methodology is the same for electricity, natural gas and water Consistent rate of 11 .11 % provides transparency and accountability to consumers Page 12 ezo,,,,,.,, G R II II ISC U"''''R''''ED THE CITY Of CAL A Y 6 1910612015 Franchise Fee Revenues • Franchise Fees are about 8% of City revenues • Electricity and natural gas franchise fees amounted to $202 million in 2014; $31 million over projections • 2015 electricity and natural gas franchise fees forecast to be $30 M under budget ($42 million less than 2014 actual) • Water franchise fees totaled $50 million in 2014. • Revenues above budget are used for future City capital projects in Calgary to benefit Calgarians • Revenues volatile due to monthly commodity price fluctuations Pag.e 13 c",,,.,.,, II II OSC U,."slR,WO THE CITY OF CALGARY Franchise Fees - Revenue Utility Franchise Fees $160 $140 $120 $100 ..c o ;: $80 ..E $60 $40 $20 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 _ ElectncltyFF _ Natural Gas FF _ WaterFF II 0""""osc u'~,,,"~"p THE CITY Of CALGARY II 7 19/0 6/2015 Municipal Consent and Access Agreements (MCAA) • Agreements that govern the use of The City's Rights-of-Way (ROW)-between The City and utilities/telecoms Pago 15 e"",..." II 1St ""'[51"<:"0 THE CITY OF CALGARY II Municipal Consent and Access Agreements • New telecom MCAA template reviewed by GPT and approved by Council • Telecoms have challenged the City's MCAA agreement at the CRTC • MCAA for ENMAX expires 2017 December 31 Page lS e,."""" , II II ." _m'.OlD THE CIT\ OF CALGARY 8 - ---------:::-- -=-:.-- . _ _ . - 19/0612015 Telecommunications • Telecommunications are regulated by the Canadian Radio-television and Telecommunications Commission (CRTC) • CRTC regulates City assets if they involve telecommunications facilities Page 17 e",,,,,,,, II II rse u"""."',,o THE CITY OF CALGARY Regulatory Structure: Telecommunications canadian Radio-television and Tetecommunkations Commission ("CRTc") REGISTERED REGISTERED NON­ FAOUTIES-BASED FACILITIES BASED 9 19/06/2015 City Involvement in CRTC Proceedings • Part I Applications: • Telecom's challenge to City MCAA Hamilton's challenge to Bell re MCAA • Notices of Consultation (by CRTC): • Wholesale Services Proceeding - Network owners providing bandwidth to other telecoms Basic Services Proceeding - review of consumer telecommunication services Page 19 C'''~l II <SC U_STR.cno THE CITY OF CALGARY II RECOMMENDATION That Council receive this report for information Paga 20 II ~'~~T"O<"O THE CITY OF CALGARY II 10 .