Council maintains franchise fees at current rates

Cold Lake, AB – Cold Lake City Council has stayed the course with its electrical and gas franchise fees, maintaining the existing fees with no increases for 2026.

The City of Cold Lake is in a 10-year electric distribution franchise agreement until August 27, 2033, with ATCO Electric, with a franchise-fee cap of 10 per cent.

“Franchise fees essentially allow municipalities to charge an access fee to utility companies for the use of roads, right of ways, and municipal lands,” Mayor Craig Copeland said. “They also give utility companies the right to be the exclusive services provider in the municipality.”

In 2022, the franchise fee was set at 5.75 per cent before being raised to 7.25 per cent in 2023. This same rate was maintained through 2024 and 2025, and now into 2026 as well. The franchise fee is estimated to generate $1,224,332 by the end of 2025 and $1,237,446 in 2026.

Cold Lake City Council also voted to maintain its fee under the gas franchise agreement with ATCO Gas and Pipelines Ltd. The franchise fee will remain at 15.5 per cent. This agreement also has a 10-year term that was entered into in July of 2023. The franchise-fee cap for gas utilities is 35 per cent. Maintaining the existing 15.5 per cent fee is expected to generate $664,155 in 2025 and $667,625 in revenue for 2026. 

“Franchise fees are an economical means for many municipalities to build and maintain the systems needed to distribute crucial utility services that everyone relies on, but which smaller municipalities cannot provide in an economical manner by themselves,” said Copeland.

A franchise agreement grants a utility system provider within a given municipal service area the right to provide a utility distribution service and to construct, operate and maintain the utility distribution system. It also grants the right to use designated roads, right of ways, and municipal lands needed to provide the utility distribution service. The utility system provider also agrees to pay the City a franchise fee calculated as a percentage of the utility system provider’s actual revenue in that year from the distribution tariff rate charged in the municipality. Franchise fees are recovered from the consumers of the utilities.

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