Late yesterday, Council authorized to proceed with a franchise agreement between The City of Calgary and ENMAX, readying it for an application to the Alberta Utilities Commission (AUC). This agreement includes a new franchise fee rate for electricity (also known as a Local Access Fee) and updated calculation method, making the franchise fee more stable and transparent for Calgarians.
The proposed 2025 franchise fee rate is $0.015507 per kilowatt-hour (kWh) for all customers, both residential and non-residential. This is estimated to generate $143.5 million in revenue for 2025, a $36.7 million decrease from the existing calculation method. Budgeting for this amount minimizes the risk of collecting more or less than we need and provides stable, predictable revenue to fund services.
The electricity franchise fee for the average residential consumer is anticipated to decrease by about 30% in 2025. The new rate will result in an average monthly cost of $7.91 in 2025, down from an estimated $11.24 per month in 2024.
“We’ve heard from Council and Calgarians about the importance of affordable and predictable energy bills,” said Carla Male, Chief Financial Officer at The City of Calgary. “We’ve designed the new franchise fee, the only charge that is set and collected by The City, to be simpler and clearer to understand — a fixed amount per kilowatt-hour instead of a complicated formula tied to unpredictable energy rates. These changes will result in direct savings on electricity bills for Calgarians.”
The next step for ENMAX, on behalf of The City, is to apply to the AUC for approval of this new franchise fee agreement (including the franchise fee rate) by Sept. 27, 2024. The City anticipates receiving approval to implement the new franchise fee rate by Jan. 1, 2025.
A Public Notice period is being held until Sept. 24, 2024, to gather feedback from Calgarians about this proposed change. This feedback will be included as part of the application to the AUC.
For more information on franchise fees and to provide feedback on the changes we’re making, visit calgary.ca/FranchiseFees
