Franchise Fees
Franchise Fees
Beginning in 2014, residents will notice a “Municipal Franchise Fee” on their Natural Gas and Electricity utility bills. Essentially, a franchise fee is rent that the City charges utility distributors for having infrastructure (pipes, wires, etc) on City of Chestermere land.
The utility distributors charge this fee back to consumers then forward the payments to the municipality. The vast majority of municipalities in Alberta have franchise fees.
While other municipalities put revenues from franchise fees into general revenues, Chestermere has chosen to use the fees only for the replacement or major repairs of municipal infrastructure (i.e. the RCMP building, the bridge over Chestermere Lake, etc.).
This year, and for the next ten years, franchise fees will be used to make the payments for borrowing for the new RCMP building. With the franchise fees revenues, the City will be able to have a 10 year loan on the new RCMP building instead of a 20 year loan. This will save residents approximately $1.4 Million in interest because a lower borrowing rate was available for a 10 year term and because of the shortened borrowing time frame .
Fees
The fees in Chestermere are on the distribution charges required to transport the energy to your location, not on the final cost of the energy product. The percentages listed below are percentages charged on the distributor’s delivery revenues (not the final amount of your utility bill). | Product | Franchise Fee (%) | Amount per Year (Based on 120 GJ consumption) ($) |
|---|---|---|
| Natural Gas (Distributor-ATCO) |
17% | $72.06 / year ($6.01/month) |
| Electricity (Distributor - FORTIS Alberta) |
11.5% | $79.56 / year ($6.63/month) |
| Water, Wastewater & Stormwater (Distributor - CUI) |
0% | 0% |
Franchise Fee Implementation Process
February 4, 2013 - Information about Franchise Fees and the Bylaw 002-13 being the ATCO Franchise Agreement Bylaw, for delivery of natural gas to customers within Chestermere, were presented to Council. The Bylaw received 1st reading (Resolution No. 030-13).
Link to Council Agenda. Link to Council Minutes.
March 14, 2013 – Notice printed in The Anchor advertising the application for Natural Gas Franchise Agreement with the City of Chestermere and ATCO Gas.
March 18, 2013 – A resolution was passed to allow the implementation of Franchise Fees at 11.5% for FORTIS Alberta and 17% for ATCO Gas beginning January 1, 2014 (Resolution No. 091-13).
Link to Council Agenda. Link to Council Minutes.
May 6, 2013 – 2nd and 3rd reading of Bylaw 002-13 being the ATCO Franchise Agreement Bylaw were passed (Resolution No. 172-13).
Link to Council Agenda. Link to Council Minutes.
June 4, 2013 - 1st and 2nd reading of Bylaw 018-13 being the Franchise Fee Bylaw were passed (Resolution Nos. 213-13, 214-13).
Link to Council Agenda. Link to Council Minutes.
June 17, 2013 – Resolution to amend Bylaw 018-13 (being the Franchise Fee Bylaw) and rename it to “Franchise Fee Revenue Allocation Bylaw” was passed (Resolution No. 238-13).
3rd reading of Bylaw 018-13 being the Franchise Fee Revenue Allocation Bylaw was passed as amended (Resolution No. 239-13).
Link to Council Agenda. Link to Council Minutes.
August 19, 2013 - Motion to approve the CUI Franchise Agreement passed (Resolution 290-13).
Link to Council Agenda. Link to Council Minutes.
September 3, 2013 - 1st reading of Bylaw 029-13 being the CUI Franchise Bylaw was passed (Resolution No. 330-13).
Link to Council Agenda. Link to Council Minutes.
September 16, 2013 - 2nd and 3rd reading of Bylaw 029-13 as amended being the CUI Exclusivity Bylaw (formerly named the CUI Franchise Bylaw) were passed (Resolution Nos. 357-13, 358-13).
Link to Council Agenda. Link to Council Minutes
October 31, 2013 – Advertisement for Franchise Fee with ATCO Gas Ltd. And Franchise Agreement with CUI is listed in The Anchor.
For more information:
If you would like more information on the utility business in Alberta, please contact:
Alberta Utilities Commission
(780) 427-4903
Consumer-relations@auc.ab.ca
For more information on the franchise fees or franchise agreements in Chestermere, please read the FAQs at the top of the page or contact:
Alberta Utilities Commission
(780) 427-4903
Consumer-relations@auc.ab.ca
City of Chestermere
Chief Administrative Officer
(403) 207-7050
cao@chestermere.ca
FortisAlberta
Allison Beaudry
(403) 514-4386
Allison.beaudry@fortisalberta.com
ATCO Gas and Pipelines Ltd
Mr. Doug Brown
(403) 245-7271
Doug.brown@atcogas.com