Natural gas bills set to rise as Calgary pursues infrastructure funding

Calgary residents could see their natural gas bills inch up next year as the city tackles a looming infrastructure crisis.

The city filed a notice of application Friday with the Alberta Utilities Commission to amend its natural gas franchise agreement with ATCO. If approved, franchise fees are expected to rise roughly $2.45 per month for the average resident, bringing the typical monthly franchise fee to approximately $10.90.

The franchise agreement allows ATCO to distribute natural gas in Calgary and collect fees from customers on behalf of the city. Those revenues go directly to municipal coffers for building, running, and maintaining utilities on city land. In May, council directed administration to collect $98.2 million in franchise fee revenue next year—up from this year's $71.6 million target. To hit that mark, the city is increasing the fixed monthly gas price used to calculate the fees.

Mayor Jeromy Farkas supports the increase, emphasizing that every dollar raised must be earmarked for essential infrastructure. "It can't just be money that's collected in a way to offset future property tax increases," Farkas said. "Calgarians need to see on their bills a very clear delineation and line of sight for those access fees and royalties collected to material benefits in their neighbourhood, but also to the essential infrastructure that they rely on."

The context is urgent: a city report earlier this year projected $49 billion in capital infrastructure needs over the next decade, with $18 billion of Calgary's existing assets in poor or very poor condition. Two catastrophic breaks in Calgary's Bearspaw feeder main—occurring just 18 months apart—spurred council members to address the infrastructure gap now rather than pass the problem to future councils.

Ward 10 Councillor Andre Chabot framed the franchise fee as more equitable than property tax increases. "Not everybody pays property tax," Chabot said. "Everybody does pay a franchise fee to some degree if they are using utilities. So it's sharing the load amongst more Calgarians." Chabot added that Calgary's natural gas franchise fee remains lower than other Alberta municipalities', so the increase does not place undue burden on residents compared to the rest of the province.

The public notice period for feedback runs August 7-25. The city will include community submissions in its application to the Alberta Utilities Commission, which ATCO is expected to file by September 21. The Alberta Utilities Commission approved the new rate on February 13, 2025, with implementation set for March 1, 2025.