No fee increase as ATCO prepares franchise agreement

By Mickey Dumont Local Journalism Initiative Reporter

ATCO is proposing the Town of Claresholm again enter into a 20-year natural gas franchise agreement.
Last signed in 2005, Dan Magnan Senior Manager, Lethbridge Region appeared as a delegation at council’s Feb. 24 meeting to remind them the 20-year lease is coming due.
The Town of Claresholm has an agreement with ATCO Gas and Pipelines Ltd. for the distribution of gas services in Claresholm. This agreement allows ATCO to be the exclusive provider in the community and is up for renewal at the end of April.
“The Town of Claresholm passed Bylaw 1456 in 2005, which is the town’s formal approval of the agreement,” explained Abe Tinney, the town’s chief administrative office. “Administration is recommending that council approve an agreement renewal with ATCO.”
Municipalities can adjust the franchise fee at the time of renewal, but Tinney said administration is not recommending adjusting the fee.
“The current franchise fee is 14 per cent. The maximum fee can be 35 per cent. Administration is not recommending any adjustments to the fee, as council has already increased the fee for 2025 (from 12 per cent to 14 per cent),” Tinney said.
In addition to the franchise fees, the town collects taxes on ATCO’s infrastructure, via a linear tax.
“Council could cancel this linear tax, however, administration would recommend that council make a corresponding franchise fee increase to recover the lost revenues,” Tinney said. “Most municipalities utilize a combination of franchise fee and linear taxes in their arrangements with ATCO. Linear taxes are ultimately passed on to ratepayers by ATCO, like franchise fees.”
Town council will discuss renewing the franchise fee at its next meeting.