Calgary households could pay about $29 more a year on their natural gas bills beginning in 2027 as the city moves to increase its franchise fee revenue by more than $26 million.The City of Calgary filed notice with the Alberta Utilities Commission (AUC) Friday seeking an amendment to its natural gas franchise agreement with ATCO Gas and Pipelines Ltd.The proposed change would increase the average residential franchise fee by about $2.45 per month, from roughly $8.45 to $10.90, effective Jan. 1, 2027.City council voted in May to set a 2027 natural gas franchise fee revenue target of $98.2 million, up from $71.6 million in 2026 — an increase of approximately 37%.The franchise agreement gives ATCO Gas the right to distribute natural gas in Calgary and allows the company to collect the fee from customers on behalf of the city.ATCO remits the money to Calgary in lieu of property taxes. The city says franchise fee revenues help finance municipal services while keeping property taxes lower than they otherwise would be.Under the existing formula, franchise fees are calculated using a fixed natural gas reference price of $3.15 per gigajoule.To generate the additional revenue sought by council, Calgary proposes increasing that reference price to $5.67 per gigajoule in 2027.The reference price used to calculate the fee would therefore rise by 80%.At ATCO Gas's request, the proposed agreement would also extend the city's existing franchise fee methodology, which relies on a fixed reference price, for another year.Calgarians will have an opportunity to comment on the proposed changes during a public notice period running from Aug. 7 through Aug. 25. The feedback will form part of the city's application to the utilities regulator.ATCO Gas, acting on behalf of the city, is expected to submit the new franchise fee agreement and proposed rate to the AUC for approval by Sept. 21.If approved, the new fee calculation will take effect Jan. 1, 2027.
