A Municipal Franchise Fee is a charge a municipality collects for allowing a utility’s distribution system to run through public land, and it appears on your natural gas bill no matter which retailer supplies your gas. The City of Calgary is increasing the fixed rate used in its calculation from $3.15/GJ to $5.67/GJ effective January 1, 2027, moving the fee from roughly $0.35/GJ to about $0.63/GJ.
Published August 24, 2026. Source: Gas Alberta Energy customer notice, “Notice of Increase to The City of Calgary’s Natural Gas Municipal Franchise Fee.”
The line item most Albertans never read
Most people look at the total on a natural gas bill and not much else. But a meaningful share of that total is not the gas at all — it is delivery, riders, and municipal charges. One of those is the Municipal Franchise Fee, and in Calgary it is set to increase.
What the fee actually is
A municipal franchise fee is what a municipality charges a utility for the right to run its distribution system through public land: roads, rights-of-way, and easements. The utility recovers that cost through customer bills, and your retailer collects it on the municipality’s behalf. It is not a retailer charge, and it is not something a retailer sets, marks up, or can discount.
How Calgary calculates it
The fee is 11.11% of transmission and distribution charges, plus 11.11% of a fixed monthly rate the City sets. That fixed rate replaced an earlier method tied to the Direct Energy Regulated Services (DERS) rate, which tracked closely to Alberta’s floating natural gas price.
What is changing on January 1, 2027
The City’s fixed monthly rate rises from $3.15/GJ to $5.67/GJ — roughly an 80% increase to that input.
| Method | Calculation | Fee per GJ |
|---|---|---|
| Former (DERS-based) | $1.729/GJ × 11.11% | $0.19 |
| Current | $3.15/GJ × 11.11% | $0.35 |
| Effective Jan 1, 2027 | $5.67/GJ × 11.11% | $0.63 |
For context, Gas Alberta Energy notes the incoming fixed rate sits above both the current Alberta natural gas spot price and current three-year wholesale fixed contract pricing adjusted for seasonality.
Who it affects
Any natural gas customer inside Calgary’s franchise fee area. The dollar impact scales with consumption, so commercial and industrial customers will feel it most — a high-throughput site pays the per-GJ fee on every gigajoule it burns.
What you can and cannot change
You cannot shop away a franchise fee. It applies regardless of who supplies your gas. The City has invited affected commercial and industrial customers to send comments to franchisefee@calgary.ca on or before August 25, 2026.
What is competitive is the energy portion of the bill — the commodity rate and the administration fee. If no one has ever read your gas bill line by line with you, that is a conversation worth having, whatever you decide about the rest.
FAQ
Is the Municipal Franchise Fee charged by my retailer?
No. It is set by the municipality and collected on its behalf. It appears on gas bills from every retailer serving the franchise area.
Can I avoid the fee by switching providers?
No. The fee is tied to your location, not your supplier.
When does the Calgary increase take effect?
January 1, 2027.
How much is the increase?
The fixed rate input goes from $3.15/GJ to $5.67/GJ, moving the fee from about $0.35/GJ to about $0.63/GJ.
Sources
- Gas Alberta Energy, “Notice of Increase to The City of Calgary’s Natural Gas Municipal Franchise Fee” (retrieved August 24, 2026).
- The City of Calgary — franchise fee inquiries: franchisefee@calgary.ca
Questions about what the lines on your gas bill mean? Call us at (780) 665-4771 or visit getenergy.ca.
Get Energy is a competitive retailer. Get Energy is a tradename of Utility Network & Partners Inc.
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