Calgarians will be asked to pay more on their natural gas bills each month, with a new franchise fee agreement that’s now out for public feedback.

On Aug. 7, an application was filed with the Alberta Utilities Commission (AUC) for an amendment to the current franchise fee agreement between the City of Calgary and ATCO Gas and Pipelines.

The proposed amendment will change the fixed gas price cost for the average Calgary customer from $3.15 per gigajoule (GJ) to $5.67/GJ starting on Jan. 1, 2027. The franchise fee is calculated using a percentage of the fixed monthly gas price. The result will be a roughly $2.45 monthly increase on a gas bill.

The amendment comes after Calgary city council approved a plan in May of this year to collect $98.2 million in revenue from the natural gas franchise fee in 2027, up from $71.6 million in 2026.

The City of Calgary collects franchise fees from utilities instead of annual property taxes.

“Franchise fees make up a small percentage of utility bills,” the City of Calgary said in a news release.

“They are an important factor in supporting the City’s operating budget, and they help fund the services Calgarians rely on, keeping property taxes low.”

Calgary Mayor Jeromy Farkas was asked on July 29 whether it mattered if the revenue was collected via property taxes or through franchise fees when there’s only one taxpayer.

He said the difference was that a franchise fee is calculated based on one’s use.

“If you use more, you have the ability to be able to pay more,” he said.

“When we think about property taxes, that’s one of the least equitable ways to be able to raise revenues. Property taxes don’t care what your income is, and many Calgarians, especially those more vulnerable Calgarians and seniors who lived on fixed incomes, they may be asset rich, but cash flow poor

“We need to be looking at ways to make revenue raises from municipal governments more fair.”

Franchise fees a key funder for future infrastructure: Mayor Farkas

Mayor Farkas said that all options need to be on the table to address a $50 billion essential infrastructure deficit over the next 10 years. He said that the problems with the Bearspaw south feeder main highlighted a need to deal with Calgary’s infrastructure deficit.

“It is a matter of when, and not a matter of if, when we see the next major break of critical infrastructure,” he said.

“It could be water mains, it could be other essential infrastructure like roads, bridges, recreation centers.”

Farkas said he fully supported the increase in franchise fee gas rates in Calgary — on one condition. He said that every single additional dollar raised from that revenue source has to be earmarked for essential infrastructure.

“It can’t just be money that’s collected in a way to be able to offset future property tax increases,” he said.

“Calgarians need to see on their bills, a very clear delineation in line of sight for those access fees and royalties collected to material benefits in their neighborhood, but also to the essential infrastructure that they rely on.”

A Public Notice period was opened between Aug. 7 and 25, 2026, to collect feedback from Calgarians on the proposed increase. That feedback will be included as a part of ATCO’s application to the AUC.

The next step is for ATCO Gas, on behalf of the City of Calgary to apply for approval of the rate increase by Sept. 21.