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RELEVANT LINKS: League of Minnesota Cities Information Memo: 5/15/2024 Gas and Electric Utility Franchising Page 3 The models are based on actual ordinances that have been reviewed by gas and electric companies. Because these models are more city-oriented than many currently existing franchises, utilities have objected to many of the provisions contained in these models. As a result, there is likely to be negotiation on at least the following provisions: • Franchise fees; in form, amount, and class of service distinctions. • Fee obligation on perceived competitors. • Where a city seeks additional rate and service consideration regarding renewable energy or infrastructure investment. • Rights regarding city-requested location and relocation of facilities. • The city’s right to amend the franchise during the term. Each city must evaluate the importance of the provisions contained in these models as such provisions may affect the city’s particular needs. One franchise cannot fit all because of the many variations of city-utility relationships, including factors such as urban, suburban, or rural settings; developing versus redeveloping cities; single versus multiple utilities serving the city; residential-commercial customer mix; larger employer versus diversified economic base; the presence of a municipal utility or contemplated utility; and revenue needs of the city. Electric Utility Franchise, LMC model ordinance. See Section 11, Service reliability, infrastructure reporting. Gas Utility Franchise, LMC model ordinance. See Section 10, Service reliability, infrastructure reporting. One section is taken from the City of Minneapolis-Xcel Energy Electric franchise. It introduces an agreement to obtain additional service and reliability reporting from the utility for comparison purposes among other utility service areas. These are matters governed by the MPUC and routinely produced by regulated utilities, but not on a city-by-city basis. This section is slightly different, depending on whether it is a gas or electric utility. Electric utilities have reliability issues such as outages and reduced power. Gas utilities bring the public safety risk of unsafe gas lines when infrastructure ages. This type of information is available to all customers through the MPUC. Putting a provision in the franchise establishing annual reporting may heighten the city and the company’s awareness of where improvements can be made within the city. For cities interested in establishing additional dialog with the utility and identifying its service record in the franchised city when compared with other cities, this provision can achieve greater awareness and perhaps heightened attention by the utility to the needs of the city.