+ RMA Rural Municipalities
of Alberta

Resolution 18-18F

Utility Conflict in Municipal Right of Ways

Date:
November 21, 2018
Expiry Date:
December 1, 2021
Active Status:
Active
Sponsors:
Red Deer County
District:
2 - Central
Year:
2018
Convention:
Fall
Category:
Transportation and Infrastructure
Status:
Intent Not Met
Vote Results:
Carried
Preamble:

WHEREAS municipalities and contractors are experiencing road construction project completion delays and incurring added expense due to utility companies such as TELUS, ATCO and Fortis not meeting schedules for relocation of their infrastructure located within municipal right of ways; and

WHEREAS for many years, utility companies have utilized municipal right of ways for their infrastructure, both overhead and underground utilities; and

WHEREAS over the past several years, conflicts between municipalities and utility companies in relation to road construction and road maintenance projects have increased as utility companies are not meeting their agreed upon schedules for relocation of underground utility lines and overhead power lines; and

WHEREAS although the locating and marking of utilities used to occur within 48 hours, current experience has this process taking up to 10 to 12 days to complete;

Operative Clause:

THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta collaborate with the Government of Alberta and other stakeholders to create a better process of locating and marking utilities to alleviate the added costs and delays being incurred by municipalities conducting infrastructure maintenance or construction; and

FURTHER BE IT RESOLVED that options considered in this process include:

  • negotiate with utility companies to ensure they honor their schedules or be held responsible to pay for all delays, impacts and costs associated with these delays; and
  • create a universal master agreement for utility companies to enter into with all municipalities whereby utility companies pay a fee per lineal meter for their utilities to be located within municipal road right of way.
Member Background:

For many years, utility companies have utilized municipal right of ways for their infrastructure, both overhead and underground utilities. There are several agreements with the various utility companies that have developed over time that allow them to place and maintain their infrastructure within municipal right of ways.

For the past several years, the conflicts with utility companies in relation to road construction and road maintenance projects have increased. Utility companies are not meeting their schedules to relocate their underground utility lines and overhead power lines. This causes project delays to construction schedules for municipalities and adds additional costs. The utility line locating process used to be as little as 48 hours to get lines located and marked. Municipalities are experiencing delays of up to 10 to 12 days to get utilities marked. Beyond that component, municipalities are experiencing much longer delays to have the actual utility relocated.

Current examples for Red Deer County include the following:

  • Range Road 10 – Construction on this road was delayed due to TELUS’s line relocation. Communication with TELUS commenced January 8, 2018, construction started in May and the line was not relocated until mid-June. The additional costs for to work around the TELUS lines is approximately $50,000.
  • Township Road 370 and ATCO – ATCO was notified of the road construction project in February 2017. They were updated in March 2018 that the project had been awarded to a contractor for summer 2018 construction.  An onsite meeting was held on April 6, 2018.  ATCO requires three months’ notice in order to commit to relocating their power poles on road construction projects. It is now 18 months past the initial notice. This grading project will be completed in early August. As of August 1, 2018, ATCO has begun the survey for relocation of entire line.  The road project will be completed and the contractor will be mobilized off the project before ATCO relocates their power line. This will lead to soil disturbance and re‑landscaping of the ditches and slopes.
  • FORTIS in Gasoline Alley’s Laura Avenue – Construction completed in summer 2017 with final clean up and landscaping delayed to 2018 due to FORTIS delay, including their installation of the required street lights. Additionally, during the long delays, FORTIS provided three cost estimates that started at $39,000 and increased to $52,700 then to $121,700 with no additional scope or work added and no detailed back up provided on how FORTIS obtained these numbers. The street lights were finally installed in late July, a year later than scheduled.

AltaLink in the Markerville area –AltaLink located several large structures within the road right of way that were too close to the road shoulder and intersections, posing hazardous situations. Due to the cost to AltaLink to re-locate these large structures, a guardrail was installed around the structures.

RMA Background:

RMA has no active resolutions directly related to this issue.

Government Response:

Alberta Utilities Commission

The responsibility and standards around the locating and locating marking of utility infrastructure in Alberta lies with Alberta One Call Corporation. Utility Alberta One-Call is a private, not-for-profit corporation providing a communications service between people who intend to disturb the ground in Alberta and the utility operators who register their buried facilities (members of Alberta One-Call).

Related to the conflict examples provided by the County of Red Deer, Telus Communications Inc., ATCO Electric Ltd., ATCO Gas, ATCO Pipelines and FortisAlberta are all members of Alberta One Call. The organization pledges to have utilities respond within two full working days to contact those requesting a location, or to visit the site and mark the location of buried lines, etc.

The dispute between utilities and municipalities on the timing of both locations and relocations appears to be a commercial dispute between the two parties. It might best be resolved by discussion between them. These matters may possibly be addressed through utility right-of-way agreements, a municipality’s bylaw or negotiations between a municipality and the utility, although this is likely on a case-by-case or municipality-specific basis.

In Alberta, a municipality may grant a right, exclusive or otherwise, to a third-party utility to provide utility service in all or part of the municipality under the Municipal Government Act. The Alberta Utilities Commission (AUC) approves these agreements. For gas and electric distribution service, many municipalities use the standard or universal franchise template agreements developed and approved by the AUC under its Rule 029: Applications for Municipal Franchise Agreements and Associated Franchise Fee Rate Riders.

These agreements, subject to AUC approval:

  • Set out the utility’s right to use portions of roads, rights-of-way and other lands controlled or managed by the municipality, to deliver the utility service.
  • Provide the means and manner of calculation for the utility to charge a franchise fee to consumers. Within limits, the franchise fee is set by agreement between the utility and the municipality, and is subject to AUC approval. The franchise fee is typically based on delivery revenue of the utility (the cost of the utility service, less the cost of the gas or electricity itself).
  • Require a one-year notice from a municipality for infrastructure relocations by the utility reasonably required by the municipality due to planned municipal construction.

The AUC approved franchise agreement template is effectively a universal master agreement between municipalities and utilities, and effectively sets out the financial arrangements between utilities and municipalities for the right to deliver service, and in order for the utility to do so, for the use of municipal rights-of-way.

A proposal to add an additional fee per linear metre would almost certainly increase costs for utility ratepayers and have an impact on that approved utility service arrangement, because utilities are entitled to recover their reasonable costs from ratepayers. The franchise fee and any linear fee is a cost, i.e., a payment to a municipality for use of the streets, roads, etc., which is passed on to the utility’s customers who pay it as part of their utility rates. Such a change would require formal AUC approval.

The first round of AUC specified penalties, for contraventions by utility service providers of AUC rules on billing-related standards, came into effect on January 1, 2019 following several months of consultations.

The AUC was empowered to formulate and apply specified penalties for contraventions of its decision documents, such as rules, decisions, orders, etc. The AUC issues no permits and licenses, has no rules and has issued no orders dealing with standards on utility infrastructure location and relocation.

Alberta Energy

Companies or municipalities should contact the AUC if an issue arises that cannot be resolved directly with the distribution owner. A Specified Penalties framework and the rules surrounding terms and condition violations are currently being determined by the AUC and may address part or all of this issue.

Alberta Municipal Affairs

Alberta Municipal Affairs has no input, as the resolution is not within the ministry’s mandate.

Development:

The response provided by the Alberta Utilities Commission (AUC) indicates the unique challenges related to the utility right of way approval process. The first part of this resolution requests an improvement to the utility marking and locating process to reduce delays and costs. The AUC response explains the current process but does not indicate plans to improve it. Not mentioned in the response but relevant to the resolution is the recent passing of Bill 211: Alberta Underground Infrastructure Notification System Consultation Act in the Alberta Legislature. Bill 211 would form a committee of the Legislative Assembly to prepare and submit a “report on the underground infrastructure notification system in Alberta, which must include any recommendations for amendments to legislation to improve safety for excavators and to protect underground infrastructure.” Among other things, the report must consider “enforcement of rules pertaining to the underground infrastructure notification system.” RMA formally submitted the passing of Bill 211 and looks forward to engaging with the committee when they are formed to voice the municipal perspective on underground infrastructure notification, including the issue of delays faced by municipalities.

The second part of this resolution requests the development of a master agreement which would include a fee per lineal metre to be paid by utility companies with infrastructure within a municipality’s boundaries. The AUC response raises concerns about the costs such an approach would impose on utility companies, which would be passed along to consumers. RMA looks forward to discussing this approach and its pros and cons with the AUC. At this point, this resolution is assigned a status of Intent Not Met, but RMA looks forward to progressing on this issue through Bill 211 and other discussions with the AUC.

Provincial Ministries:
Energy,
Municipal Affairs
Provincial Boards and Organizations:
Alberta One-Call
Back to Resolutions Database