Utility Franchise Fees - Laserfiche WebLink

Home Browse Search

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