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A municipality may grant the exclusive right to a utility distribution company to provide services to the municipality through a franchise agreement. The municipality then charges the distribution company a franchise fee for the exclusive right to serve utilities. The municipality is largely responsible for establishing the level of the fee through the franchise agreement with the distribution company; however, the Alberta Utilities Commission must approve the franchise agreement. The distribution company is then able to recover these costs from its customers.
Franchise fees are typically calculated as a percentage of the total distribution charges on your bill and are capped at 20 per cent for electrical and 35 per cent for natural gas. The provisions and requirements of franchise fees are found in Section 45 of the Municipal Government Act.
The federal government’s carbon charge applicable listed fuels produced or delivered in Alberta to residential, commercial and industrial customers will appear as a separate line item on natural gas bills starting on January 1, 2020. The charge will be calculated based on volume according to pricing schedules determined by the federal government. The pricing for natural gas, converted to gigajoules, is as follows:
Please visit the Government of Canada web page for more information.