Anyone else seeing franchise fees on Xcel residential accounts in Minneapolis? I've got three clients showing a "Municipal Franchise Fee" line item at 2.5% of total electric charges. This started appearing in February bills. I thought franchise fees were typically rolled into the base rates for residential customers, not itemized separately. Has anyone dealt with this before or know if this is legit? The amounts are small ($3-8 per month) but it's the principle of the thing.
Xcel Energy franchise fee showing up on residential accounts?
Hank, I've seen similar issues with Xcel here in Denver but not recently. Usually franchise fees are built into the tariff rates and not shown as separate line items for residential. Check the city ordinance - Minneapolis might have changed their franchise agreement terms. Sometimes utilities will start itemizing these fees when they renegotiate agreements with municipalities. Worth calling Xcel directly to ask about the legal basis for the separate charge.
We dealt with something similar in Atlanta with Georgia Power a few years back. Turned out they were testing a new billing format that separated previously embedded costs. The key is whether the total bill amount actually increased or if they're just showing existing fees separately. If the total went up, you've got grounds to challenge. If not, it might just be transparency (annoying as it is).
Good point Rachel. I compared year-over-year totals and they did increase by roughly the franchise fee amount. So this isn't just itemizing existing charges - it's an actual addition. I'm going to file complaints with the Minnesota PUC. Has anyone had success getting franchise fees removed when they're improperly applied to residential accounts?
In North Carolina, Duke Energy tried something similar in 2010. We organized a group complaint through the NCUC and got the charges reversed for residential customers. The key argument was that residential customers weren't specifically mentioned in the city franchise agreement. Commercial accounts kept the fee since they were explicitly covered. Definitely worth pursuing - these "small" charges add up to millions for the utility.
Derek's right about the group complaint approach. I'd be happy to share the template we used in Colorado for a similar issue. The utilities count on people not fighting $5 charges, but when you multiply that by thousands of accounts, it's worth their while. Make sure you document everything - bills, tariff schedules, city ordinances. The PUC will want to see the paper trail.
Just want to add - check if there's a statute of limitations on getting refunds. In Ohio, we can usually get 24 months back if we can prove the charges were unauthorized. Don't wait too long to file that complaint. FirstEnergy tried to pull this nonsense in Youngstown and we got two years of refunds for affected customers.
Update: Hank, did you end up filing with the Minnesota PUC? Curious how it turned out. We're seeing some similar charges pop up on Xcel accounts here in Colorado and want to know if there's precedent from your case.