SDG&E did not disclose details of the proposal, but in a statement at 9:16 p.m. .m .m, SDG&E spokeswoman Helen Gao said: “Mayor Todd Gloria, his administration and the city`s attorney have urged us to find new creative ways to work with the city under modernized franchise agreements. The proposed agreements reflect the solutions to the comments heard during the rigorous public process and the objectives expressed by City Council and its call for greater transparency and accountability. In this 2014 blog post, ILSR discussed how cities like Minneapolis, Minnesota, or Edmonton, Alberta, could use franchise fees to support clean energy development. This article describes how one city used its franchise agreement negotiations to advance its climate action plan. Similar to the Clean Energy Partnership launched by Minneapolis, Minnesota, Salt Lake City, Utah, Utah has included clean energy goals in its franchise agreement. While the city does not charge franchise fees, Salt Lake City Corporation and Rocky Mountain Power signed the city`s joint declaration of clean energy cooperation in their franchise agreement. The joint venture establishes a cooperative relationship between the city and the utility company to achieve the city`s goal of 100% renewable energy by 2032. The city and utilities plan to collaborate on demand response, energy storage, renewable energy projects, energy efficiency and other initiatives to help the city meet its clean energy and energy efficiency goals. This data forms the basis of an analysis published in Energy Policy that found that local governments in 30 states can negotiate franchise agreements, which could lead to the development of 164 to 911 terawatt hours of renewable energy by 2030.
The article also presented illustrative case studies of three individual cities. U.S. largest city bans natural gas in new buildings Other midwestern cities also charge franchise fees, including more than 150 Iowa municipalities, according to the Iowa Utility Association. Many communities in Illinois received free electricity or gas for city operations instead of payments. To understand this trend, NREL has developed a national dataset on municipal franchise agreements and is publishing case studies of cities that have included clean energy targets in their franchise agreements. NREL also publishes a national assessment of the potential impact of widespread adoption of renewable energy targets on national deployment. However, states may restrict the authority of localities to pursue such objectives through the right to vote. For example, when Minneapolis negotiated the renewal of its franchise agreements in 2014, state law ruled out the inclusion of similar requirements in the contract.
In March, Gloria launched a formal tender requiring potential candidates, among others, to pay the city at least $80 million ($70 million for the electricity franchise and $10 million for the gas franchise) and sign a term of “10 plus 10” – that is, a 10-year agreement with an automatic extension of 10 years. if the city considers that the franchisee has met all the conditions. A recent assessment of more than 3,500 cities by the National Renewable Energy Lab found that more than 3,200 have franchise agreements. Of these, 57 of the cities surveyed aim to achieve 100% renewable energy, and 75 of the franchise agreements concern renewable energies. For example, the city of Dunnellon, Florida, used its franchise agreement to prevent Duke Energy from imposing restrictions on the development of renewable energy and reselling that energy to the utility. The city of Alamosa, Colo. (along with a handful of other Colorado cities) used its franchise agreement to set baseline expectations for the city`s and utility`s climate goals. Minneapolis, Minnesota, Salt Lake City, Utah, Denver, Colorado and others go even further by leveraging franchise agreements with their electric utility to create clean energy partnerships.
Their franchise rights fund a significant portion of cities` climate and energy efforts. But the utility would ask permission to stop charging the surcharges – also known as differences in franchise fees. While this would reduce monthly bills for San Diego residents, it would be a blow to the city`s budget. One strategy: Local governments could change franchise agreements, which are contracts that govern how private utilities can build and operate their infrastructure in public rights-of-way. These franchise agreements outline the rules, rights and fees associated with companies that use public property for private reasons – and it may be possible to change them to slow the flow of fossil fuels into our cities. The 2009 study also found that only one city (among those studied) – Ann Arbor, Michigan – had a franchise agreement with renewable energy regulations. Specifically, the franchise required the utility to provide at least 10% renewable energy by the fifth and final year of the contract. ILSR was unable to find an example of a franchise agreement from another city with a similar purpose.
Unfortunately, monopolistic utility fees levied on third parties and changes to Michigan state law invalidated Ann Arbor`s franchise agreement, and no fees have been charged for several years. Thousands of cities have the opportunity to turn their franchise negotiations into clean energy commitments from their electricity supplier. You can use the franchise fee to finance new projects related to renewable energy, energy storage, etc. Cities interested in flexing their franchise fee muscles should consult their state laws to determine the extent of their franchise authority. Minneapolis, Minnesota, has distinguished itself as the most innovative user of franchise fees in recent years. When the existing franchise agreement with private monopoly electricity and gas companies Xcel Energy and Centerpoint Energy expired in 2013, the city began exploring its legal options to meet local climate and energy goals. In a study titled “Energy Pathways” (summary slideshow), the city examined the leverage of creating its own city-owned utility (testing the influence of the “birch pole,” as President Franklin D. Roosevelt called local authority bending in his 1932 “Portland Speech”). Increasing the cost of installing natural gas infrastructure is a mechanism that local governments can use to control utilities. In Washington, state law prohibits cities and towns from charging franchise fees for the use of public rights of way, but the law still allows cities and municipalities to collect a sales tax of up to 6 percent.
Most receive the full amount in addition to covering the administrative costs associated with the deductible. While Minneapolis stands out for its targeted use of an increase in franchise fees for clean energy goals, the city isn`t the only one evaluating franchise fees. .