NOTICE FOR OBJECTIONS
APPLICATION NO. 1427925
TOWN OF FALHER
APPLICATION NO. 1427937
ATCO ELECTRIC LTD.

Take Notice that the Alberta Energy and Utilities Board (the EUB) may continue to process these applications without further notice if no valid objections are received on or before December 14, 2005.

An application has been filed with the EUB by the Town of Falher (the Town) for approval to renew its electric distribution franchise agreement (the Agreement) with ATCO Electric Ltd. The Agreement gives ATCO Electric Ltd. the exclusive right to deliver electric power to the residents of the Town for 10 Years.

The Agreement has been based on a standard electric franchise agreement negotiated by the Alberta Urban Municipalities Association for use by all municipalities in the province. The standard electric franchise agreement has been reviewed by the EUB.

The terms of the Agreement have changed substantially from previously approved franchise agreements. Some of the noteworthy changes include a change in responsibility for utility relocation costs caused by municipal purposes, provision of extra services, changes respecting street lighting investment matters, options for purchase of the distribution system by the municipality, and provisions respecting third party use of the distribution system.

The Agreement also requires ATCO Electric Ltd. to pay the Town linear taxes as well as a franchise fee for use of municipal rights of way. Previously ATCO Electric Ltd. only paid a franchise fee in lieu of linear taxes. The level of franchise fee is a matter that is specifically negotiated between a municipality and the utility at the time a distribution agreement is entered into, renewed or amended. The combination of the franchise fee and the linear taxes paid to the Town for service provided exclusively in the Town are recovered as a separate utility charge on customer billings within the Town of Falher.

The franchise fee provided in the proposed agreement would initially be set at 6.25 per cent of ATCO Electric Ltd.'s delivery revenues. The combination of the linear taxes and franchise fee changes would increase the monthly billing of an average residential customer in the Town by about $0.36. An average residential customer uses about 625 kWh per month.

The Agreement further allows the Town to increase the level of the franchise fee at its own discretion on an annual basis, without any further review by the EUB. However the Agreement does not allow the Town to impose a franchise fee above 20 per cent. Therefore, if the Town implemented the maximum franchise fee at current rates for distribution, monthly billings would increase by a further $10.60 for an average residential customer in the Town.

ATCO Electric Ltd. has applied to the EUB for approval to revise its rates so that the franchise fee and linear tax clauses included in the Agreement can be recovered from customers within the Town.

To obtain additional information or a copy of the applications, contact:

The Town of Falher
PO Box 155
Falher, Alberta T0H 1M0
Attention: Gerard A. Nocolet
Telephone: (780) 837 2247 , Fax: (780) 837 2647 

- or -

ATCO Electric Ltd.
10035 – 105 Street
Edmonton, Alberta T5J 2V6
Attention: J. P. Sloan
Distribution Services
Telephone: (780) 420 7310, Fax: (780) 420 7400

For information about EUB procedures, contact Joanna Luong-Tran of the Utilities Branch at the number listed below.

The application is available on IAR Query through the EUB website at www.ercb.ca. IAR Query is available through the "Quick Links', by choosing 'IAR'. Search for application number 1427925 or 1427937.