Franchise Fees

Municipal franchise fees reflect the City’s charge to utility operators for the exclusive right to provide utility services within Spruce Grove. These agreements also provide the utility companies with access to City lands to construct, maintain, and operate their assets. The City of Spruce Grove has entered into Franchise Agreements with FortisAlberta Inc. (Bylaw C-835-12) and ATCO Gas and Pipelines Ltd. (Bylaw C-1064-19) which allow for a municipal franchise fee to be charged to these utilities.  The amounts are remitted to the City by the utility companies after they have billed their customers. The FortisAlberta Inc. agreement authorizes a charge of 20% of the consumption of electricity. The FortisAlberta Municipal Franchise Fee Riders lists the franchise fees charged by municipalities in Alberta which appear on consumer’s electricity billings.

The ATCO Gas and Pipelines Ltd. Agreement authorizes a charge of 35% of gross revenues from gas. The ATCO Gas and Pipelines - North Rate Schedules shows franchise fees charged by municipalities in Alberta which appear on consumer’s gas billings. 

Why does the City have franchise fees?

Franchise fees are one of the ways a municipality can reduce the tax burden, as it provides a stream of revenue that accesses properties that are otherwise exempt from property taxes such as schools, healthcare facilities, places of worship and non-profit organizations. It is an opportunity to increase revenue more equitably, as nearly all organizations use utilities, but not all organizations pay property taxes.

When considering any type of tax or fee increase, City Council takes into consideration a variety of factors, including the potential financial impact to residents. Council also looks at what is required to ensure the City is functioning well and serving the needs of the community in both an efficient and resourceful manner.