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a ees in the franc e ,(.• it collects he franchise asonable. e ` "is no c Minnesota establishing erk is ti f able with ect to a franchise fees'° By way of example, the ctli of St ` til an ` 'est St. Paul are illy Minnesota c posingf, and electric franchise fees as high as 5% of the 's gross revenues derived from •... �: tio.ns in that city' Of course, the City "unposes the 7 °lo fee on the City of Circle Pines municipal gas utility. ' Otherwise, the most common range of the Minnesota cities that impose a franchise fee on gas and electric utilities is ,queen 2% and 3% of company's gross revenues from operations in the city. iproximately ten percent of Minnesota cities now impose a franchise tee on their gas or ctrie utilities, or both. It,is fair to say that the larger, Minnesota cities and those in the in City Metro Area comprise the vast majority of cities imposing franchise', fees. So it is Memorandum June 19, 2008 extent it is not inconsistent with 216B.36. That is Section 301B.01. Section 216B.36 provides that: Under the [municipal] license, permit, right, or franchise, the [gas or electric] utility may be obligated by any municipality to pay to the municipality fees to raise revenue or defray increased municipal costs accruing as a result of utility operations, or both. Similarly, Section 301B.01 states that the gas, electric, and other public service corporations can be required to pay the municipality "compensation" for the use of public property to deliver the utility services. Franchise Fee as Pass Through Gas and electric utilities are allowed by the PUC to pass through these franchise fees to their customers within the jurisdiction imposing the franchise fee. Thus, the franchise fee design is most relevant to the utility customers who will be paying the fee. The utility collects the fee and turns it over to the city for use as general revenue. In Minnesota, there is no possibility of an up -front franchise fee paid by the utility in the same manner a McDonald's franchisee would pay for a McDonald's franchise. Utilities will not make any franchise fee payments from their own coffers but rather rely on the collection of the fee from their customers within the city. rout to Fee Amy." atutory limit • t: but is t the franchise negotiations, 1dating fee it need not have any r e tually incurs because of the utility's g and. Section 216B.36 makes it very +ees may be recovered from t liA 335300v1 JMS LN140 -105