Kevin D. from Louisville here. Working on a rate comparison for a client and discovered Louisville Gas & Electric buries franchise fees and gross receipts taxes inside their base energy charges rather than listing them separately like most utilities. Found this by comparing their $/kWh rates to nearby utilities - LG&E was consistently 0.8 cents higher across all rate classes. Anyone else encountered utilities that hide these pass-through costs in the base rates instead of separate line items?
Hidden franchise fees in municipal utility tariffs
Greg L. from Indianapolis. IPL does something similar here. Their commercial rates include city franchise fees in the base energy charge, but residential customers see it as a separate line item. Makes rate comparisons tricky when you're looking at multiple utilities. I usually call the utility's regulatory affairs department to ask for the embedded tax breakdown.
Randy Dawson here from Memphis. This is actually more common than people realize, especially with municipal franchise agreements. Some utilities negotiate franchise fees as a percentage of revenues and embed them in rates, while others collect them as separate charges. Kevin, for LG&E specifically, their last rate case filing should break out the embedded franchise fee component. Check the KPSC docket for their cost-of-service study - usually shows the revenue requirement with and without franchise fees. Memphis Light Gas & Water does this too - embeds the city franchise fee in base rates rather than showing it separately.
Susan W. from Oklahoma City. OG&E shows franchise fees separately here, but you have to read the fine print. Each municipality has different franchise fee rates, so the same OG&E customer class pays different total rates depending on which city they're in. Kevin, are you comparing LG&E to other Kentucky utilities or out-of-state?
Susan, comparing to both KU (Kentucky Utilities) and some Tennessee Valley Authority rates. Randy, I'll dig into the KPSC rate case filings - that's a great tip about the cost-of-service breakdown. Greg, good point about residential vs commercial treatment being different. This embedded approach makes true rate comparison much harder than it should be.
Janet H. from Richmond, VA. Dominion Energy Virginia breaks out the franchise fees separately, but each locality sets their own rate. Richmond charges 0.5% of electric revenues as franchise fee, but surrounding counties range from 0% to 2%. Creates a patchwork of effective rates across the service territory.
Norm R. from Des Moines. MidAmerican Energy here in Iowa embeds state and local taxes but shows franchise fees separately. Kevin, have you tried asking LG&E directly for their embedded tax breakdown? Sometimes they'll provide it even if not required to show it on bills.
Norm, that's worth a shot. I'll reach out to their business customer service team and see if they can break it down. Janet, the patchwork issue is exactly what makes this so complicated - same utility, different effective rates based on municipality. Thanks everyone for the insights on this tariff quirk.
Larry G. from Meridian, ID. Idaho Power keeps it simple - franchise fees are separate line items and clearly disclosed in their tariff schedules. Sounds like eastern utilities make this more complicated than it needs to be. Kevin, did you ever get that breakdown from LG&E?