City’s natural gas franchise fee agreement ready for the Alberta Utilities Commission

On August 7, 2026, a notice of application was filed with the Alberta Utilities Commission (AUC) for an amendment to the natural gas franchise fee agreement between The City of Calgary and ATCO Gas and Pipelines Ltd. (ATCO Gas). A Public Notice period is being held from August 7 to 25, 2026, to gather feedback from Calgarians about this proposed change, and this feedback will be included as part of the application to the AUC.

The application includes an update to the franchise fee rate to meet Council’s 2027 franchise fee revenue target, and (at the request of ATCO Gas) extends the use of the existing franchise fee methodology that uses a fixed reference price for an additional year.

The franchise agreement grants ATCO Gas the right to provide natural gas distribution service in Calgary. The agreement authorizes ATCO Gas to collect a franchise fee from customers in Calgary and remit the fees to The City in lieu of property tax. Franchise fees make up a small percentage of utility bills. They are an important factor in supporting The City’s operating budget and they help fund the services Calgarians rely on, keeping property taxes low.

In May 2026, Council directed Administration to collect $98.2 million in revenue from the natural gas franchise fee in 2027, up from a target of $71.6 million in 2026. To obtain the revenue target, the current fixed monthly gas cost price used in the franchise fee calculation will be increased.

Currently, franchise fees are calculated using a percentage of a fixed monthly gas cost price of $3.15 per gigajoule (GJ) of gas consumed. The amendment will change the fixed rate to $5.67/GJ effective January 1, 2027. For the average residential consumer, the monthly franchise fee is estimated to be approximately $10.90 per month in 2027, an increase of about $2.45 per month.

The next step for ATCO Gas, on behalf of The City, is to apply to the AUC for approval of this new franchise fee agreement, including the franchise fee rate, by September 21, 2026.

For more information on franchise fees and to provide feedback on the changes we’re making, visit calgary.ca/FranchiseFeeUpdate.

Courtesy: The City of Calgary Newsroom