Municipal Franchise Fees in Alberta: What You Should Know

Think your electricity bill is high? You're not imagining it — you're paying more than just for the power you use.

Across Alberta, municipal franchise fees—also known as local access fees—are quietly adding extra charges to your monthly power bill, often without clear explanation. These hidden utility charges aren't based on consumption but rather on where you live and the agreements your city or town makes with utility providers.

And here’s the catch: residents in some areas pay significantly more than others for the same level of service. With franchise fee discrepancies across Alberta, from rural municipalities to major cities, many homeowners are shocked to discover just how much of their electricity bill is made up of hidden fees.

It’s time to take a closer look at what you’re really paying for—and why.

What Are Franchise Fees—And Why Should You Care?

Municipal franchise fees—are charges your municipality adds to your electricity and gas bills. These fees allow utility companies to use public land for infrastructure like power lines and gas pipes. While framed as standard operating costs, for many Alberta residents, they're simply hidden charges on electricity bills that funnel money directly to city hall.

Unlike a typical user fee, these utility taxes in Alberta often go unnoticed, yet they contribute significantly to city utility charges and municipal revenue streams. From pothole repairs to non-essential pet projects, these public utility fees are often used to fund general city services—making them a stealth tax buried in your monthly power bill.

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 Hidden Tax on a Tax

Here’s the kicker: GST is applied to franchise fees because they're classified as part of your overall utility service. That means you're not just paying for electricity—you’re also paying a tax on a tax. It’s one of the most regressive energy charges in Alberta, silently inflating your monthly costs without most consumers realizing it.

For many households already struggling with high electricity delivery rates and franchise fees in Alberta, this stacked taxation adds insult to injury.

Looking to reduce your reliance on expensive utility charges? Explore our Solar Club program to see how you can produce your own energy, earn credits, and cut down on unnecessary utility taxes—including GST on inflated bills.

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 in Alberta are one of the most hidden and regressive taxes on your power bill. They’re inconsistent, difficult to track, and often unfair—particularly for rural and small-town residents who already face higher utility distribution costs. While Alberta’s new “quantity-only” model may introduce some predictability, it does little to compensate for the years of overcharging or the fact that these electricity surcharges remain a steady revenue stream for municipalities.

If you’re in a rural area, you may already be paying significantly more than your urban neighbors. Learn more about the rural-urban divide in our blog on why rural Albertans pay more for electricity.

At Big Rock Power, we believe in breaking down those barriers by offering affordable electricity solutions and standing up for underserved communities. It's time for energy equity—no matter your postal code.

Feeling overcharged? You're not alone. Review your electricity bill, calculate your franchise fees, and start asking questions. Alberta families deserve fairness and transparency.

Have you experienced high utility charges or unclear fees? Share your story below and help push for franchise fee reform in Alberta.

FAQs:

1. What are municipal franchise fees in Alberta?

   These are local utility charges collected by municipalities from electricity and gas bills.

   
   

2. Why are Calgary’s franchise fees higher than Edmonton’s?

   Calgary used a volatile pricing model tied to market rates, unlike Edmonton’s fixed model.

   
   

3. Is GST charged on franchise fees?

   Yes, GST applies to franchise fees, effectively making it a tax on a tax.

   
   

4. Can residents challenge franchise fees legally?

   Legal challenges have consistently failed due to existing provincial law and AUC approval.

   
   

5. Will Alberta standardize these fees in 2025?

   Yes, the AUC is moving toward a quantity-only model for better predictability.

   
   

If you want to know more about Alberta's Electricity Industry including it's history and it's future follow this link.