Alberta’s Municipal Franchise Fees: The Hidden Tax That’s Burning a Hole in Your Power Bill

Let’s cut through the jargon: municipal franchise fees, often called “local access fees”, are quietly draining your wallet every month, and most Albertans have no idea just how much they’re paying or why. These fees aren’t about the power you use, they’re about where you live and the deals your city or town cuts with utility companies. And the discrepancies are staggering.

What Are Franchise Fees—And Why Should You Care?

Franchise fees are those charges your municipality tacks onto your electricity and gas bills, supposedly for the “privilege” utility companies get to run wires and pipes through public land. But let’s be real: for consumers, it’s just another line on your bill that goes straight to city hall. It’s not a user fee, it’s a stealth tax that funds everything from pothole repairs to pet projects.

The Numbers: How Much Are You Really Paying?

• Edmonton: 1.05¢/kWh (2023)

• Calgary: Used to be a whopping 2.72¢/kWh, 159% higher than Edmonton.

• Calgary (2025): Dropping to 1.5507¢/kWh, but still higher than Edmonton.

• ATCO/Other Towns: Many rural and small-town Albertans pay the maximum allowed: 20% of distribution charges.

For a typical Calgary household, that meant franchise fees jumped to $11.24/month in 2024, now forecast to drop to $7.91/month in 2025, a 30% decrease, but still money out of your pocket. In ATCO served areas, it’s $8.33/month for natural gas alone.

Why the Big Discrepancies?

Until now, cities like Calgary pegged franchise fees to the volatile Regulated Rate Option (RRO) now known as the RoLR (Rate of Last Resort), so when energy prices spiked, so did your fees, double pain, same bill. Edmonton and most others used a fixed rate per kWh, making fees more predictable. The Alberta government is finally forcing everyone to standardize, but the damage is done: for years, Calgarians and many rural residents have paid far more than their Edmonton neighbours for the same service.

GST on Franchise Fees: A Tax on a Tax

Here’s the kicker: GST is charged on franchise fees because they’re considered part of your utility service. That means you’re literally paying a tax on a tax, one of the most regressive forms of double-dipping out there.

Urban vs. Rural: Who Gets Hit Hardest?

• Urban: Edmonton residents pay the lowest franchise fees in Alberta. Calgary’s are dropping, but still above Edmonton’s.

• Rural: Many small towns and rural municipalities max out the franchise fee at 20% of distribution charges, often higher than what city dwellers pay for the same amount of electricity.

• Unincorporated rural areas may escape the fee, but nearly every town and village imposes it.

Legal Challenges? Good Luck.

Despite public outrage and plenty of grumbling, no successful legal challenges have overturned franchise fees in Alberta. The law is on the side of municipalities, and the Alberta Utilities Commission rubber-stamps the rates as long as they don’t exceed the cap.

The Bottom Line

Franchise fees are a hidden, regressive tax on every Albertan who flips a light switch. They’re inconsistent, unpredictable, and often unfair, especially for rural and small-town residents who already pay higher distribution costs. The new “quantity-only” model may bring more predictability, but it doesn’t erase the years of overcharging or the reality that these fees are

a cash cow for municipalities.

Are you angry yet? You should be. Check your bill, do the math, and demand answers from your local council. It’s time to call out franchise fees for what they are: a tax that hits Alberta families every month, with little transparency and even less accountability.

What’s your experience with franchise fees? Drop your thoughts below and let’s get this conversation started.