Beth H. from Jacksonville. Working with JEA tariffs and trying to understand how they calculate the franchise fee component. It shows up as a separate line item but the percentage seems to vary by customer class. Municipal utilities handle this differently than investor-owned utilities - anyone have experience with the calculation methodology?
Franchise Fees and Gross Receipts Tax Calculations in Municipal Tariffs
Gary F. in Baton Rouge. Municipal utilities here in Louisiana typically apply franchise fees as a percentage of the total electric bill before taxes. Usually ranges from 3% to 6% depending on the city ordinance. JEA might have different tiers based on customer size or usage levels.
Randy Dawson here. Beth, municipal utility franchise fee structures can be complex because they're governed by city ordinances rather than state PUC regulations. JEA likely has the methodology spelled out in their tariff's "Terms and Conditions" section, usually around Section 12 or 13. Some municipal utilities apply franchise fees only to base rates, others include it on the total bill including riders and adjustments. The percentage can also vary - residential might be 6% while large industrial could be 3%. Florida municipal utilities also have to deal with gross receipts tax which is separate from franchise fees. Check JEA's website for their city council ordinances - that's where the fee structure is legally defined.
Linda F. from Milwaukee. We Energy here applies franchise fees differently to each municipality they serve. Beth, you might need to look at Jacksonville's specific agreement with JEA. These deals get renegotiated every 10-20 years and the fee structure can change significantly.
Sylvia D. in Harrisburg. Pennsylvania municipal authorities are required to publish their fee calculations in the tariff appendix. Beth, if JEA doesn't show the methodology clearly, you can request it under Florida's sunshine laws. Municipal utilities have to be more transparent than private companies.
Eddie H. from Spokane. Our municipal utility applies franchise fees only during certain months of the year to spread out the city's revenue needs. Might want to check if JEA has seasonal adjustments to their fee structure.
Diane from Louisville. Had a client challenge LG&E's franchise fee calculation last year. Found out they were applying it to rider charges that should have been exempt. Beth, make sure you understand exactly what bill components are subject to the fee.
Thanks everyone for the insights. Found JEA's franchise fee ordinance from 2019 - it's 6.85% applied to total bill excluding taxes and deposits. Randy, you were right about checking the city ordinances. The fee hasn't changed since 2019 but there's a review scheduled for 2025. Linda, good point about renegotiation cycles.