Found a weird 2.5% "City Franchise Fee" line item on several MidAmerican Energy bills here in Des Moines. Client says it wasn't there last year. Anyone else in Iowa seeing this pop up recently? The tariff doesn't mention it specifically and it's adding about $18/month to their bill. Trying to figure out if this is legitimate or if we can challenge it.
MidAmerican Energy franchise fees - anyone else seeing these?
Norm - we're seeing similar charges down here with Georgia Power. Started showing up around January. From what I understand, these are legitimate fees that utilities pass through when cities update their franchise agreements. The city gets the money, not the utility. Check with Des Moines city clerk's office to see if they recently renegotiated their franchise deal.
Rachel's right about the legitimacy, but you can still challenge the implementation. FirstEnergy tried to sneak these in without proper notice here in Cleveland. We got them to backdate credits for improper notification. Check if MidAmerican gave proper 30-day notice before implementing. Iowa usually requires this for any new charges.
Good point Frank. I'll dig into the notification timeline. The bills I'm looking at show it started in January but I don't see any advance notice inserts from December. If they didn't follow proper procedure that could be our angle. Thanks for the tip about FirstEnergy - I'll use that as precedent.
Just wanted to chime in - MLGW here in Memphis added franchise fees last year after the city council vote. They did give proper notice but buried it in fine print. The key is making sure the percentage matches what the city actually approved. We found one case where they were charging 3% but the ordinance only authorized 2.5%. Easy $400/month recovery once we caught it.
Amir makes a great point about verifying the actual percentage. Savannah Electric here in Georgia tried something similar. Always cross-reference the utility's tariff with the actual municipal ordinance. Sometimes there's a discrepancy that works in your favor. Also check if they're applying it to the right rate classes - some franchise agreements exclude certain customer types.
Update: Found the smoking gun! MidAmerican started charging January 1st but the city ordinance wasn't effective until February 1st. One month of improper charges across all their customers. Filing a complaint with the Iowa Utilities Board tomorrow. Thanks everyone for the guidance on where to look.
Nice work Norm! Keep us posted on how the IUB responds. That kind of timing error could result in a pretty significant refund order. Bet MidAmerican settles quickly rather than deal with the bad publicity.