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Utility Franchise Fees
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INFORMATION SHEET <br />MINNESOTA <br />Some cities have imposed franchise fees on their energy providers as part of utility franchise agreements. As allowed by the <br />Minnesota Public Utilities Commission, franchise fees levied on us are passed on directly to our customers within a city. This fee <br />is itemized on our customer bills as a City Fee. <br />A franchise fee can only be implemented if it is allowed by the city’s existing franchise agreement with us. If a <br />community determines that a franchise fee is appropriate, there are several guiding principles that we follow in discussing <br />fee options. <br />•Franchise fees are set forth in a fee ordinance authorized by, but separate from, the franchise agreement. <br />•An equivalent fee must be placed on all energy suppliers serving the city. <br />•We will not be subject to permit fees while franchise fees are in effect. <br />•We will prepare fee schedule options for the amount of revenue sought by the city. <br />•The fee is calculated as a flat fee, per premise and is applied equally for all customers in a given rate class. <br />•Fees are paid to the city on a quarterly basis. <br />Franchise Fee Considerations <br />As in any case where a city is considering a new revenue source, we urge careful consideration of the possible negative impacts <br />of a franchise fee since they increase the cost of energy for all customers in that city. <br />Timeline <br />Implementing franchise fees is a complex process that requires adequate time for system programming and testing. <br />Here’s a typical sequence of events: <br />•City provides us with written notice of intent to enact a fee prior to formal consideration. <br />•City and Xcel Energy negotiate the fee. <br />•In order to meet the PUC’s requirements, the approved fee ordinance must be received by us at least 90 days before the <br />anticipated start of fee collection. <br />•We collect the fee from our customers monthly and transfer it to the city on a quarterly basis. <br />Sample Timeline <br />Utility Franchise Fees <br />Day 1 Day 90 Day 120 Day 210 Day 240 <br />City adopts <br />ordinance <br />Xcel Energy implements <br />fee on customers’ bills <br />Fee collection <br />(Xcel Energy pays the city quarterly) <br />Xcel Energy pays the city at the end <br />of the month after the quarter’s fees <br />have been collected <br />Xcel Energy receives <br />proposed ordinance <br />xcelenergy.com | © 2016 Xcel Energy Inc. | Xcel Energy is a registered trademark of Xcel Energy Inc. <br />Northern States Power Company-Minnesota | 16-01-638
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