Town of Claresholm council increases natural gas franchise fee

By Rob Vogt

Ratepayers in the Town of Claresholm will see an increase of $5.64 for the year on their natural gas bills after town council approved an increase to the franchise fee collected on its behalf by the gas company.
At its Sept. 22 meeting, council heard a report from Chief Administrative Officer Abe Tinney explaining ATCO franchise fees are the rent or lease costs ATCO pays the town to have their infrastructure, such as pipelines, on town land and exclusive rights to the distribution of natural gas within the Town of Claresholm.
These fees are in turn charged directly to the consumer, that is residents and businesses, on their gas bill.
Most municipalities in Alberta have franchise fees.
Council can change the rate for the town’s natural gas franchise fee. As per its agreement, it must notify ATCO of any changes.
He noted Claresholm’s rate is currently 14 per cent. Claresholm is lower than the majority of communities – out of 68 communities, not including Claresholm, there are 15 that are lower than Claresholm.
The other 53 are higher, with some as high as 35 per cent. The average for the 68 communities is 19.7 per cent.
Communities Claresholm generally compares itself to for tax rates include those in close proximity to Claresholm, including: Fort Macleod at 12.5 per cent; Nanton at 19 per cent; High River at 20 percent; Stavely at 11 per cent; and Granum with no fee.
Those similar in size and distance from larger urban communities, include Vulcan at 35 per cent; Raymond at 15 per cent; and Cardston at 20 per cent.
Based on Claresholm’s current rate, and ATCO’s projection for 2026 delivery tariff revenue, it is estimated Claresholm’s ATCO franchise fees will be $184,298, while 2025 revenues are projected to be $183,256. As of Aug. 31, the town collected $130,972 from ATCO in franchise fees.
If the rates are not adjusted, the town is projected to see a $1,042 increase in revenue in 2026.
If Council chose to increase the ATCO franchise fee rate to 15 per cent, this would result in estimated revenues of $197,462, or an annual increase to the average residential customer bill of $5.64.
If council raised the rate to 16 per cent, the estimated revenues would be $210,6262, or $11.28 for the average residential customer.
In 2021, council left the fee at 10 per cent; in 2022, council again kept the rate at 10 per cent; in 2023, they raised the rate to 12 per cent; and in 2024, they raised the rate to 14 per cent.
“This is a tough one this year,” said Coun. Kandice Meister, adding everyone is fighting with their bills.
She suggested if anything, raise it one not two per cent.
Coun. Kieth Carlson said it is important to move with inflation.
“(Otherwise) the catch up is sometimes worse than anything,” he said, noting he agreed with a one percent increase.
Coun. Rod Kettles said he could support a one percent increase.
He pointed out this levels the playing field, because this fee taxes health-care facilities, provincial buildings, and schools. These are all exempt from property taxes.
“It does spread out the burden across a lot of a broader group of organizations,” Kettles said.
Council then agreed to raise the franchise fee one per cent to 15 per cent, with all of council voting in favour except Coun. Mike Cutler who was opposed and Coun. Craig Zimmer who was absent.