City of Chestermere News

Posted on: December 20, 2016

Council Approves 7.8% Utility Rate Increase for 2017

Following a thorough review process, City of Chestermere Council approved a motion at their regular December 19 meeting to allow Chestermere Utilities Inc. (CUI) to increase 2017 rates by an average 7.8% overall. CUI’s original request was to increase rates by an average of 15% overall.

As part of the 2016 Interim Rate Setting Process, Council heard presentations from CUI, InterGroup Consultants, a third party utility consultant, and City finance staff regarding CUI’s 2017 Utility Rate Request. These comprehensive reports scrutinized CUI’s financial projections, applied Alberta Utilities Commission principles, and considered the impacts of a challenging economy.

“This was a complex decision that we didn’t make lightly. By using our Interim Process, we are confident that we took the necessary steps to ensure this rate increase was absolutely necessary for CUI to continue to provide services to our residents,” says Patricia Matthews, Mayor of Chestermere. “We appreciate the extensive analysis that City Staff and InterGroup Consultants did to lessen the impact on residents by reducing the overall rate request by almost half.”

InterGroup Consultants recommended lowering the rate request from 15% to 10% by reducing the revenue CUI may collect for Water and Storm Water Services. Council determined, upon the advice of the consultant, that reducing Water revenues by $300,000 and Storm revenues by $300,000 will still allow CUI to be financial sustainable.

City Staff recommended reducing the request further by:
• Considering interest savings from CUI’s newly negotiated funding arrangements. This will
result in reduced rate-related interest expenses of approximately $149,000, with additional
savings benefits occurring in future years.
• Reducing the demands on cash through appropriate debt financing. CUI will pursue debt
financing that aligns with the life cycle of their long-term assets to provide short-term ratepayer
relief.

“When making this decision as the rate regulator and as residents, Council understands the importance of listening to our community’s concerns, respecting today’s economic conditions, and enabling CUI to continue to serve Chestermerians,” says Matthews.

The average residential customer will pay an additional $11.74 per month, significantly lower than CUI’s original request, an average increase of $22.60 more per month.

CUI’s final submission, InterGroup Consulting’s report and the City’s detailed recommendations can be viewed on the agenda, which is available at: www.chestermere.ca/agendas

Additional Info in the Agenda...
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