The Alberta Utilities Commission is consulting on changes to franchise fee agreements
The AUC recently released a bulletin outlining processes for approving municipal franchise agreements and franchise fees affected by the Utilities Affordability Statutes Amendment Act, 2024. The Act makes several changes to statutes concerning franchise agreements, including:
- Section 139 of the Electric Utilities Act now requires AUC approval of electric distribution franchise agreements between a municipality and a corporation controlled by the municipality or subsidiary of the municipality (collectively referred to as subsidiaries). Subsection 139(7) provides that, without AUC approval, existing franchise agreements between a municipality and its subsidiary are terminated 270 days after the coming into force of that subsection.
- Section 49(5) of the Gas Utilities Act now states that a franchise granted by a municipality to an owner of a gas utility that has not been approved after the coming into force of this subsection will terminate 270 days after the coming into force of that subsection.
- Section 45.01 of the Municipal Government Act now prohibits franchise agreements from providing for the payment of fees that are determined in whole or in part using a price per kilowatt hour or per gigajoule that varies according to market prices.
As a result, any franchise agreement impacted by the amendments will terminate on March 17, 2025, unless approved by the AUC before this date. The bulletin sets out filing deadlines to ensure municipalities and utilities have sufficient time to prepare the relevant franchise agreements, and to allow the AUC sufficient time to adequately review and approve subsequent applications. Details of each application type are outlined in the bulletin.
| Application type | Deadline |
| Applications for approval of unchanged existing natural gas franchise agreements compliant with the Act. | January 10, 2025 |
| Applications for approval of franchise agreements eligible for streamlined approvals, as set out in Rule 029 and Bulletin 2021-13. | January 10, 2025 |
| Applications for approval of franchise agreements that are not eligible for the new expedited or existing streamlined processes. | December 4, 2024 |
Warren Noga
Policy Advisor
825.319.2285
warren@RMAlberta.com
Wyatt Skovron
General Manager of Policy & Advocacy
780.955.4096
wyatt@RMAlberta.com