Fergus Falls, Minn. (KBRF) – The City of Fergus Falls is looking into a potential 5% franchise fee on utilities, specifically gas and electricity, for its residents.
The franchise fee is related to utility companies’ use of public rights-of-way for utility lines and transmission, which is typically underground.
The proposed franchise fee will generate funds for street projects, but also introduce a unique funding mechanism for the city.
Utility companies operating in Fergus Falls, including Otter Tail Power Co., Lake Region Electric Co., and Great Plains Natural Gas Co., would be required to pay this fee to the city for their use of public rights-of-way.
To recover these costs, the utility companies would have the right to pass the franchise fees on to their customers, which will be listed on gas and electric bills as a “City Fee.”
The utility companies would then collect the franchise fees and remit them to the city.
It is anticipated that the proposed franchise fee would generate approximately $1.3 million annually, supplementing the existing budget for street projects.
Utility franchise fees would be applicable to all utility customers within the city.
This includes non-profit organizations, schools, churches, and government customers.
For larger utility customers, a monthly cap of $1,000 per account per utility will be enforced.
While the concept of a franchise fee may be new to many Fergus Falls residents, nearly half of the cities in Minnesota have already implement similar fees.
Additionally, cable television subscribers in Fergus Falls currently pay a franchise fee that contributes to covering the cost of PEG Access.
Fergus Falls’ utility partners have experience working with other municipal customers who employ franchise fees, and they have expressed their commitment to collaborating with the city as they consider implementing the fees with a potential start date in March 2024.
To provide the public with more information, the presentation from the recent Fergus Falls Committee of the Whole meeting is available on the city’s website at bit.ly/FFFranchiseFees.
There will be an Open House scheduled for Thursday, October 26, at 5 p.m. in the City Council Chambers to discuss the issue.
The City of Fergus Falls encourages its residents to learn more about the proposed franchise fees and its potential impact by attending.
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