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iVIINUTES <br />CITY COUNCIL <br />AUGUST 13, 2003 <br />Anderson pointed out that at a previous Council meeting Little Canada's <br />community representative with Xcel indicated that Xcel did not support a <br />percentage fee on gas because of the fluctuation in the gas market. It was <br />also noted that Xcel's upper management had concerns with a percentage <br />fee because the amount of the fee paid by commercial customers would be <br />disproportionate with the amount of City services these customers receive. <br />Anderson stated that he would argue that there are some commercial <br />businesses in Little Canada that make a very high demand on City <br />services. Anderson pointed out that in looking at the numbers, less than <br />1% of the customer base are large commercial and industrial users. <br />Therefore, it appears that Xcel is trying to protect a very small segment of <br />its customer base. <br />Anderson pointed out that there are other cities that are charging franchise <br />fees on a percentage basis, and that it was indefensible to him that Xcel <br />can reach those agreements with other cities, but is refusing to do so with <br />Little Canada based on their claim that their interest is for equity among <br />customers. <br />Fahey felt the motivation was that Xcel does not want to field complaints <br />from their large commercial and industrial users. He noted that while the <br />number of these customers only makes up I % of total customers, this is a <br />significant group of users. <br />Anderson stated that he would assume Xcel will send out letters <br />explaining the franchise fee, and asked if Xcel would be willing to include <br />a statement in such a letter indicating that they required a flat fee because <br />of their interest in protecting the large commercial and industrial <br />customer. Jurek reported that letters would not be sent, but customers' <br />bills would have a line statement indicating "City-imposed franchise fee". <br />Blesener pointed out that the number of large commercial and industrial <br />customers is only 1% of the total number of customers, but usage is 42% <br />of total revenue. Blesener felt that Xcel's flat fee proposal would be more <br />equitable if it were possible to break the large commercial and industrial <br />customer group into subcategories. <br />Fahey pointed out that the City's recourse on this issue might lie with the <br />Public Utilities Commission and the Attorney General given that Xcel's <br />flat fee proposal results in some customers subsidizing other customers. <br />Fahey suggested that if an agreement cannot be reached, the City might <br />have to pursue other options. Fahey stated that he agrees that a percentage <br />fee would be the fairest and cleanest way to address the issue. Fahey <br />pointed out that two or three years ago percentage franchise fees were <br />10 <br />