COLD LAKE –Cold Lake residents won’t see an increase in the City’s percentage-based franchise fees on their natural gas or electricity bills next year after council decided to leave both rates unchanged for 2027.

Council reviewed its agreements with ATCO Gas and Pipelines Ltd. and ATCO Electric at its Sept. 8 meeting and ultimately maintained the natural gas franchise fee at 15.5 percent and the electricity franchise fee at 7.25 percent.

Even without increasing the percentages, the City expects to collect more franchise fee revenue next year as ATCO forecasts higher delivery tariff revenues.

Combined, the two fees are currently expected to bring the City approximately $2.02 million in 2027.

So, what exactly is a franchise fee?

It sounds complicated, but the basic idea is fairly simple.

ATCO uses municipal land and rights-of-way to deliver electricity and natural gas throughout Cold Lake. Under its franchise agreements with the City, ATCO pays Cold Lake a franchise fee.

ATCO doesn’t simply absorb that cost. The fee is collected from utility customers within Cold Lake as a percentage of ATCO’s delivery tariff revenue.

That means council faces a choice each year: increasing the percentage can generate additional municipal revenue, but it also means collecting more money through residents’ and businesses’ utility bills.

Council wasn’t interested in doing that this year.

“I think we’re at a reasonable rate,” Mayor Bob Mattice said during the discussion. “I don’t think we need to burden our residents with any more increases at this time.”

Electricity expected to bring in $1.31 million

Cold Lake’s electricity franchise fee will remain at 7.25 percent.

ATCO Electric estimates its delivery tariff revenue within Cold Lake will increase from approximately $16.56 million in 2025 to $18.11 million in 2027.

At the existing rate, that would generate approximately $1.31 million for the City in 2027.

During the meeting, administration presented comparisons showing Cold Lake’s rate remains well below what several other Alberta municipalities charge.

CAO Kevin Nagoya explained that some municipalities have turned to franchise fees as another way of generating municipal revenue.

“Some municipalities have used it as another form of taxation, to be honest,” Nagoya said.

He said increasing Cold Lake’s rate would generate additional revenue, but council would have to decide whether that was appropriate given the financial pressure residents already face.

Council voted unanimously to leave the electricity rate unchanged.

Natural gas stays at 15.5 percent

Council made the same decision on natural gas, keeping the City’s franchise fee at 15.5 percent.

ATCO Gas forecasts approximately $4.58 million in delivery tariff revenue within Cold Lake in 2027, compared with about $4.23 million in 2025.

At the current percentage, Cold Lake is expected to receive approximately $710,000 next year.

The estimates aren’t guaranteed. ATCO notes that gas revenues can change with weather and customer activity, while electricity estimates can also shift depending on consumption and final tariffs approved by the Alberta Utilities Commission.

Cold Lake remains on the lower end

Council’s discussion also put Cold Lake’s rates into perspective.

Administration’s municipal comparison showed Cold Lake’s 15.5 percent natural gas franchise fee was the lowest among the municipalities included, while the 7.25 percent electricity fee was also near the bottom of the comparison.

Coun. Chris Vining noted that raising the rate could provide additional revenue but said he wasn’t convinced Cold Lake needed to move in that direction.

“If we’re not in a pinch, I don’t see a reason to necessarily raise it just to raise it,” he said.

Coun. Vicky Lefebvre agreed, noting residents are already facing increases elsewhere.

Both decisions passed unanimously.

For residents, that doesn’t necessarily mean their overall utility bills won’t change in 2027. ATCO’s delivery rates, energy prices and consumption can all affect the final bill.

What council’s decision does mean is that Cold Lake won’t increase its own franchise fee percentages next year.