Town of Claresholm council increases electricity franchise fee

By Rob Vogt

Ratepayers in the Town of Claresholm will see an increase of $13.68, or $1.14 per month, on their electricity bills after town council approved an increase to the franchise fee collected on its behalf by the power company.
At its Sept. 22 meeting, council heard a report from Chief Administrative Officer Abe Tinney explaining Fortis franchise fees are the rent or lease costs Fortis pays the town to have their infrastructure, such as power lines, on town land and exclusive rights to the distribution of electricity within the Town of Claresholm. These fees are in turn charged directly to the consumer, that is residents and businesses, on their electric bill.
Most municipalities in Alberta have franchise fees.
Council has the ability to change the rate for the town’s Fortis, that is electricity, franchise fee.
As per the Claresholm’s agreement, the town must notify Fortis of any changes.
Claresholm’s rate is currently seven per cent. Claresholm is below the average of 10.17 per cent, out of 165 communities.
Communities Claresholm generally compares itself to for tax rates include those in close proximity to Claresholm including: Fort Macleod at 15 per cent; Nanton at nine per cent; High River at 20 per cent; Stavely at six per cent; and Granum with no fee.
Those similar in size and distance from larger urban communities include: Vulcan at 20 per cent; Raymond at 16 percent; and Pincher Creek at 20 per cent.
Based on Claresholm’s current rate, the town has collected $178,555 in franchise fees. Using the same seven percent rate, Fortis’ projection for 2026 delivery tariff revenue is estimated to be approximately $250,611.
That is projected to increase from 2025 by approximately $14,700.
If council chose to increase the Fortis franchise fee rate from seven per cent to eight per cent, this would result in an additional $49,000 in revenue, helping to reduce the burden on property taxes, and more fairly distribute the burden of municipal revenues to all properties, that is Alberta Health Services, schools, and so on, versus only those that are taxable.
A one percent increase in the franchise fee rate is estimated to have a $7.50 annual impact on residential customers, so approximately $0.62 per month.
A two percent increase would be a $13.68 annual impact to residential customers, so about $1.14 per month, and is estimated to generate an additional $85,000 in franchise fee revenues.
In 2021, council increased the fee from four per cent to five per cent; in 2022, there was no increase; in 2023, council raised the rate from five per cent to six per cent; and in 2024, council raised the rate from six per cent to seven per cent.
Administration recommended increasing the Fortis franchise fee rate by one or two per cent, to assist in offsetting inflation and cost increases the town has anticipated as part of its initial review of the 2026 operating budget, and to reduce some of the burden to property taxes.
Council then agreed to raise the franchise fee two per cent to nine per cent, with all of council voting in favour except Coun. Rod Kettles who was opposed and Coun. Craig Zimmer who was absent.