City receives approval to implement new franchise fee rate for natural gas starting in March

This picture, taken on Jan. 24, 2025, shows the Saddledome and the Calgary skyline on a windy Friday. (Courtesy: Matt Melnyk)

The City of Calgary has received approval from the Alberta Utilities Commission for a new natural gas franchise fee rate that it says will bring more predictable bills to Calgarians starting next month.

In a media release, the city said the new rate substitutes the variable cost of gas with a fixed price of $3.15 per gigajoule (GJ) in its existing formula.

Using a fixed franchise fee rate, it said, will protect residents from fluctuating market-driven natural gas prices.

The franchise fee rate for natural gas is expected to rise by $1.08 a month in 2025 but because a new electricity franchise fee was implemented Jan. 1, the overall monthly franchise fee rate is projected to decline $3.33 a month from 2024.

The city and ATCO Gas and Pipelines also announced that they will change the way they calculate the franchise fee in 2027, when they charge a simple rate per GJ of natural gas. That will eliminate the current formula which involves natural gas delivery and energy charges.

For more information on utility franchise fees, go here.