§ 8. Franchise Fee.  

Latest version.
  • 8.1. Franchise Fee. As a condition of the Franchise, City imposes on the Company the obligation to pay a franchise fee to City. The franchise fee may be expressed (i) as a percentage of the Gross Revenues received by the Company for its operations within the City, or (ii) a flat fee per meter or (iii) in such other manner or fashion that is mutually acceptable to both the City and Company and shall be applied in a manner that does not place the Company at an economic disadvantage with another public utility as defined in Minnesota Statutes, Chapter 216B.

    8.2. Initial Fee. The initial franchise fee shall be an amount equal to the percentage of that portion of the Company's annual Gross Revenues arising from its operations within the City, as follows:

    For Residential service customers, four and one-half (4.5) percent of Gross Revenues For Large Volume Firm and Large Volume Dual Fuel customers, three (3) percent of Gross Revenues For all other customers, five (5) percent of Gross Revenues.


    For Large Volume Firm and Large Volume Dual Fuel) customers, in the event that the City imposes a franchise fee or tax on all alternate, competing fuels, including but not limited to fuel oil, propane and coal, then the City may, with notice to Company, and without the Company's consent raise the franchise fee payable to the City to the same level as the franchise fee or tax imposed on alternate competing fuels, but in no event more than five (5) percent of Gross Revenues;


    This franchise fee shall be paid to the City in lieu of any other permit or licensing fees, charges, or costs imposed on the Company for providing gas service or performing work necessary to providing gas service in the City's Public Ground or Public Way during the term of this Franchise. Company shall pay fees as provided in Section 3.3.

    8.3. Fee Payment. The franchise fee shall be payable monthly and shall be based on the complete billing month for which payment is due. The payment shall be due twenty-five (25) days after the end of the month for which the payment is due. The Company shall pay the City the franchise fee based upon the prevailing rate and as billed to the customer, but subject to subsequent adjustment in any of the following events: (i) if any amount so billed subsequently becomes uncollectible after reasonable efforts of collection by the Company or (ii) customer refunds incurred by the Company or any amounts the Company is unable to collect under Commission Rules or Order.

    8.4. Separate Ordinance.


    The franchise fee shall be imposed by a separate ordinance duly adopted by the City Council (the "Fee Ordinance").


    The annual dollar amount of the franchise fee collected from a Company customer, or a reasonable estimate of the franchise fee that would be collected from a prospective Company customer, for gas service provided under this Franchise shall not be materially greater than the annual dollar amount of the franchise fee that would be collected for similar service to such customer by a new energy supplier under the terms of a new franchise, assuming comparable energy usage by said customer.


    For the purposes of this section only, the following terms shall have the meanings given. "Similar service" shall mean the supply of energy to a customer for the same end-use purpose or function as the gas which is or could be furnished by the Company. "New franchise" shall mean a franchise granted to a new energy supplier after January 1, 2015, or an amendment to an existing franchise held by another energy supplier January 1, 2015. "New energy supplier" shall mean a supplier of energy other than the company which begins supplying energy in the City Public Way after January 1, 2015.


    The City may waive the requirement under paragraph (b) if, after one (1) month's notice to, and subsequent consultation with the Company, the City finds by resolution, in its sole discretion, that waiver is necessary to encourage economic development within the City related to small, clean or renewable energy projects or for other public purposes.


    The franchise fee may be changed by the City from time to time by ordinance; provided, however, such changes shall not occur more often than once within any twelve (12) consecutive calendar months. The effective date of the franchise fee ordinance shall be no less than sixty (60) days after written Notice enclosing a copy of the duly adopted and approved ordinance has been served upon the Company by Certified mail. The Company is not required to collect a franchise fee if the terms of the Fee Ordinance are inconsistent with this Franchise or state law, provided the Company notifies the City Council of the same within the sixty (60) day period.

    8.5. No Waiver or Release. No acceptance of any payment shall be construed as an accord that the payment made is in fact the correct amount, nor shall such acceptance of the payment be construed as a release of any claim that the City may have for further sums payable under the provisions of this Ordinance. All amounts paid shall be subject to audit and re-computation by the City.

    8.6. Fee Modification. If for any reason the amount or rate of the franchise fee shall be determined to be in excess of the amount or rate allowed by law, then the amount or rate shall automatically, and without further action by the City, be reduced to the maximum amount or rate permitted by law.

    8.7. Challenge to Fee. If any person challenges the collection or any aspect of the franchise fee or payment made to the City pursuant to this Franchise, the Company shall promptly provide notice of such challenge to City and shall, in any event, continue to diligently exercise its efforts to sustain the franchise fee and remitting of payments.

(2014-Or-083, § 1, 10-17-14, eff. 1-1-15)