Calgary gas bills to rise $2.45 monthly as franchise fee agreement heads to regulator

Calgarians will pay roughly $2.45 more per month on natural gas bills starting January 1, 2027, under a proposed franchise fee agreement now before the Alberta Utilities Commission.

On August 7, the city and ATCO Gas filed an amendment changing the fixed gas price cost for the average Calgary customer from $3.15 per gigajoule to $5.67/GJ. The franchise fee is calculated as a percentage of that fixed price.

City council approved the revenue plan in May, aiming to collect $98.2 million from the natural gas franchise fee in 2027, up from $71.6 million in 2026. Franchise fees allow the city to collect revenue from utilities instead of annual property taxes.

Mayor Jeromy Farkas said the difference between a franchise fee and property tax is that a franchise fee is based on use. "If you use more, you have the ability to be able to pay more," he said. "When we think about property taxes, that's one of the least equitable ways to be able to raise revenues. Property taxes don't care what your income is, and many Calgarians, especially those more vulnerable Calgarians and seniors who lived on fixed incomes, they may be asset rich, but cash flow poor."

Farkas said all options are on the table to address a $50 billion essential infrastructure deficit over the next 10 years. He pointed to the Bearspaw south feeder main breaks as evidence of how critical infrastructure renewal has become. "It is a matter of when, and not a matter of if, when we see the next major break of critical infrastructure," he said. "It could be water mains, it could be other essential infrastructure like roads, bridges, recreation centers."

Farkas said he supports the increase on one condition: every additional dollar raised must be earmarked for essential infrastructure, not to offset future property tax increases. "Calgarians need to see on their bills, a very clear delineation in line of sight for those access fees and royalties collected to material benefits in their neighborhood, but also to the essential infrastructure that they rely on."

A public notice period runs through August 25 for feedback from Calgarians. ATCO Gas must apply for regulator approval by September 21.