In this article: everything you should know about the franchise fee increase in Edmonton for 2027.
Edmonton’s Electricity Franchise Fee Increase
The franchise fee increase in Edmonton from 17.65% to 19.4% will start on January 1, 2027, and will be calculated based on electricity distribution charges.
To better explain, an electricity bill contains several different components, including the cost of electricity itself and charges associated with delivering that electricity to the home, such as transmission, distribution, administration, and other regulated costs. The slice of the franchise fee component is tied to the distribution portion, which means the increase applies to only one part of the bill, and not to the amount of energy you use (the ¢/kWh price).
But that is not something new. Residents are used to paying the current amount as 17.65%, and the math behind the update remains the same. The difference is that once the new rate takes effect, this portion of the bill will cost more for Edmontonians.
Why might the increase be different from one household to another?
Although the 19.4% figure is fixed and doesn’t vary, it is also related to the distribution charges, which can vary depending on the type of service, the customer’s usage, and the way charges are calculated on the bill.
AUC highlights that a distribution system that serves rural areas will cost more than a system that serves urban areas because the distribution company has to build, operate, and maintain more poles, wires, and facilities to serve each customer.
Therefore, a customer with lower applicable distribution charges could see a smaller increase, while a customer with higher distribution charges could see a larger one. The change may also be less noticeable on a bill where the energy charge is much higher than the distribution charge, as the franchise fee is not applied to the full bill.
For example, the price of electricity may rise or fall depending on whether a customer is on a fixed-rate or variable-rate plan. Retailer fees, regulated charges, transmission costs, and other adjustments can also affect the final amount. This means a customer’s total bill could increase by more than the franchise fee change, less than the franchise fee change, or not increase at all in a particular month if other costs move in the opposite direction.
It is important to remember that the franchise fee is related to the distribution charge; a slice of the whole pizza. In fact, the more you use electricity, and where you live, the pricier each slice will be. Each consumer has different needs, behaviour, plans, and consumption, and these factors affect the total costs.
Can switching electricity retailers prevent the increase?
The franchise fee is connected to Edmonton’s local electricity distribution system and the City’s agreement with EPCOR; therefore, it is not determined by the retailer. However, in Alberta’s deregulated energy market, there may be opportunities for people to choose more affordable energy plans and reduce their bill costs.
When comparing energy retailers and their plans, consumers should consider the two things they can change about their bills: the energy charge and the site fee.
Get unbiased information
Add EnergyRates.ca as a Preferred Source on Google to see more of our articles in your search results.
What is the Franchise Fee?
Franchise fees are costs that distribution companies are allowed to recover from customers that use and benefit from their energy service, and these fees are generally calculated as a percentage of the distribution charges on a utility bill.
The City of Edmonton (the landowner) has a franchise agreement with EPCOR (which uses this land), so the company is responsible for distributing electricity through Edmonton’s local power system. As part of that agreement, EPCOR pays a franchise fee to the City for the right to provide electricity distribution service within Edmonton.
