I'm auditing PSO bills here in Tulsa and found franchise fees buried in the tariff that aren't clearly disclosed on customer bills. The fees appear to be calculated as a percentage of total charges but it's not obvious from the rate schedules. Anyone else encountered this issue with Oklahoma utilities? Eddie E.
Hidden franchise fees in utility tariffs
Eddie - franchise fees are common but the disclosure varies widely by state. In Kansas, both KCP&L and Evergy have to show franchise fees as separate line items, but I know some states let utilities bury them in base rates. What percentage are you seeing in the PSO tariff? Harold F.
Harold, I'm seeing 3.9% for Tulsa franchise fee plus 1.2% for what looks like a state gross receipts tax. Neither shows up clearly on the bills - they seem to be embedded in the total charges. The tariff language is pretty vague about how these get applied. Eddie E.
Eddie, this is a common issue with embedded taxes and fees. Oklahoma allows utilities to include franchise fees and gross receipts taxes in their base rates rather than itemizing them separately. Check the tariff's general terms and conditions section - there should be language about 'taxes and fees included in rates.' For audit purposes, you'll need to back-calculate the embedded amounts using the percentages. Randy D.
Had the same issue with Oncor here in Texas. Their delivery charges include multiple city franchise fees that vary by location, but they don't break them out on bills. Found the rate breakdown buried in Appendix C of their transmission tariff. Sometimes you have to dig deep into the supporting documents. Dean G.
Dean, that's exactly what I suspected. I finally found PSO's fee schedule in Section 12 of their general tariff terms. The Tulsa franchise fee is indeed 3.9% and there are different rates for other municipalities they serve. Makes the audit much more complex when these aren't transparent. Eddie E.
This is why I always pull the complete tariff book, not just the rate schedules. CPS Energy here in San Antonio embeds city fees but at least they publish a clear breakdown in their tariff supplement. The regulatory approach varies so much by state that you really have to know local practices. Jorge M.
Jorge makes an excellent point about pulling complete tariff books. The rate schedules are just one piece - the general terms, supplements, and rider schedules often contain critical information about embedded costs. I always recommend downloading the entire effective tariff book rather than individual rate sheets. Randy D.