(e) Notwithstanding subsection (a), the contract shall not apply to undertakings transporting natural gas in accordance with a “gas-only transport” agreement in force before 1 January 1986. Other cities in the Midwest also charge franchise fees, including more than 150 Iowa municipalities, according to the Iowa Utility Association. Many communities in Illinois received free electricity or gas for city operations instead of payments. The current agreement between the city and San Diego Gas & Electric, which has been in effect since 1970, runs until June 1. The original pact was set to expire this month, but Gloria and SDG&E officials worked out an extension. (c) This chapter does not allow a municipality to recover surcharges in addition to the exemption fee calculated on the subcalculation value of the same quantities of gas or electricity levied on the cost of raw materials for transmission customers in accordance with this chapter; Where a municipality has entered into a franchise agreement with an energy carrier that requires the energy carrier to pay a franchise charge based on intrinsic value for the raw material costs of the gas or electricity transported but not sold by the energy carrier, the energy carrier may collect the surtax imposed in this Chapter on the amount of the franchise charge payable under the franchise agreement. While the following list is far from exhaustive, it covers several tools that cities have used (or could use) with funds from franchise fees to help residents and businesses reduce energy costs and reap the local economic benefits of clean energy: A 2017 article from the Norman Transcript newspaper in Oklahoma explains: how franchise agreements work in general. If the timeline continues, Gloria will present a recommendation for a new agreement to the entire board in May. It takes a super-majority of at least six of the nine board members to approve a new pact. NREL collected information on franchise agreements from 3,538 municipalities across the country. The dataset includes information about the municipality, its franchise authority, the electricity service provider, the term of the agreement, the franchise fee, and whether the agreement contains references to specific clean energy objectives, including energy efficiency, renewable energy, street lighting, underground infrastructure and others (i.e., electric vehicles, , reliability and strengthening of infrastructure). A recent assessment of more than 3,500 cities by the National Renewable Energy Lab found that more than 3,200 have franchise agreements.
Of these, 57 of the cities surveyed aim to achieve 100% renewable energy, and 75 of the franchise agreements concern renewable energies. For example, the city of Dunnellon, Florida, used its franchise agreement to prevent Duke Energy from imposing restrictions on the development of renewable energy and reselling that energy to the utility. The city of Alamosa, Colorado (along with a handful of other Colorado cities) used its franchise agreement to set baseline expectations for the city`s and utility climate goals. Minneapolis, Minnesota, Salt Lake City, Utah, Denver, Colorado and others go even further by leveraging franchise agreements with their electric utility to create clean energy partnerships. Their franchise rights fund a significant portion of cities` climate and energy efforts. Cities have many supply options to achieve their energy goals. An emerging trend is for municipalities to include energy targets in their franchise agreements with an electricity service provider or use these agreements as an entry point to negotiate other clean energy agreements with the utility. Dark blue states allow cities to manage their own franchise agreements and set franchise fees.
Bright orange states do not allow cities to manage their own franchise agreement, but allow cities to set franchise fees. Orange-banded states do not allow cities to manage franchise agreements and franchise fees. States in light blue allow cities to manage their own franchise agreements, but the state sets the franchise fee. Blue-green blue states do not allow cities to manage their own franchise agreements, and fees are set at the state level. Finally, dark orange states do not allow franchise fees, but allow cities to manage their own franchise agreements. A few enterprising U.S. cities have found an unexpected source of revenue to support local renewable energy and climate action. Buried in most customers` electricity and gas bills, there`s one obscure element that`s often overlooked: it`s called a “franchise fee.” The City of San Diego is pleased to offer the following franchise opportunities for gas and electric utilities in the form of tenders. The following links contain instructions on the tendering process and the terms and conditions of each franchise. Potential bidders can choose to bid on one or both of the franchise opportunities. Minneapolis, Minnesota, has distinguished itself as the most innovative user of franchise fees in recent years. When the existing franchise agreement with private monopoly electricity and gas companies Xcel Energy and Centerpoint Energy expired in 2013, the city began exploring its legal options to meet local climate and energy goals.
In a study titled “Energy Pathways” (summary slideshow), the city examined the leverage of creating its own city-owned utility (testing the influence of the “birch pole,” as President Franklin D. Roosevelt called local authority bending in his 1932 “Portland Speech”). The 2009 study also found that only one city (among those studied) – Ann Arbor, Michigan – had a franchise agreement with renewable energy regulations. Specifically, the franchise required the utility to provide at least 10% renewable energy by the fifth and final year of the contract. ILSR was unable to find an example of a franchise agreement from another city with a similar purpose. Unfortunately, monopolistic utility fees levied on third parties and changes to Michigan state law invalidated Ann Arbor`s franchise agreement, and no fees have been charged for several years. If you have any questions about NREL`s work on municipal franchise agreements, contact Jeff Cook. Thursday`s virtual committee hearing was referred to as an “information session,” meaning no votes were held, but in reference to the interest in the franchise agreement, 59 appellants called during the public comment period.
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