This is a new one for me. Vermont Gas Systems has been billing a 5% franchise fee to customers in Colchester, but Colchester doesn't even have a franchise agreement with VGS. I discovered this while auditing a small manufacturing client's gas bills going back three years. The client has paid over $8,000 in bogus franchise fees. When I called VGS billing, they claimed it was a "municipal surcharge" but couldn't explain why customers outside Burlington are being charged Burlington's franchise rate. Has anyone dealt with geographic franchise fee errors like this?
Vermont Gas charging franchise fee to customers who aren't even in franchise territory
Fiona, that's a huge red flag. In Virginia, we've had similar issues with Columbia Gas applying Richmond city franchise fees to suburban customers. The utilities often use ZIP code databases that don't match actual municipal boundaries. Your client has a slam-dunk case for full refund. I'd demand immediate correction plus interest, and threaten to involve the state PUC if they resist. Document everything and get their explanation in writing.
This is more common than people think. Northwest Natural here in Oregon had similar problems with Portland franchise fees being applied to Beaverton customers. The issue is usually in their billing system mapping. VGS probably has your client's service address coded wrong in their database. I'd request a complete account audit and ask them to identify exactly which municipal ordinance authorizes the franchise fee at that specific address.
Sandra and Kira, thanks for the insights. I pulled the Colchester town records and confirmed they've never had a franchise agreement with VGS. The town clerk was actually surprised to learn residents were being charged franchise fees. I've documented three years of billing and calculated $8,247 in erroneous charges plus potential interest. Filing a formal complaint with Vermont PSB tomorrow and copying the town administrator.
Fiona, this sounds like a systemic issue that probably affects more than just your client. In Ohio, when we found Cincinnati Gas & Electric applying city franchise fees to suburban accounts, it turned out hundreds of customers were affected. You might want to reach out to other VGS customers in Colchester to see if they're getting hit with the same bogus charges. Could be a class action situation.
Great catch, Fiona. I've seen utilities in Kentucky make similar "mapping errors" that always seem to favor collecting more fees, never less. The fact that VGS couldn't explain their municipal surcharge claim when you called is telling. They know they screwed up. Push hard for full restitution and make sure they fix their billing system to prevent future errors. This kind of sloppy billing practice is inexcusable.
Update: VGS initially resisted but after the PSB opened a formal investigation, they coughed up full restitution of $8,247 plus 6% annual interest dating back three years. Total refund was $9,731. They also committed to auditing all Colchester accounts and fixing their billing system mapping. The town is now considering whether to pursue a franchise agreement, but at least residents won't be paying unauthorized fees anymore.
Excellent outcome, Fiona! That's a substantial recovery for your client. The interest component makes it even sweeter. This case should serve as a warning to other utilities about sloppy franchise fee billing. I'm definitely going to reference this thread when I encounter similar boundary issues. Well done on staying persistent and involving the regulators when needed.
Fantastic result! The fact that they agreed to audit all Colchester accounts suggests this was affecting more customers than just your client. You probably saved other residents thousands in bogus charges. This is exactly why our work matters - utilities count on customers not understanding these complex fee structures. Great job documenting everything and pushing for accountability.
Fiona's case is a perfect example of why we need to scrutinize every line item on utility bills. Franchise fees are often the most overlooked charges, but they can add up to serious money over time. I'm bookmarking this thread as a reference for my own audits. The geographic boundary angle is something I hadn't considered before, but I'll definitely be checking municipal limits more carefully now.
This thread caught my attention because we see similar franchise fee boundary issues with MLGW here in Memphis. Utilities often rely on outdated or incorrect GIS mapping for municipal boundaries. The key is getting them to admit in writing that the charge was applied in error. Once they acknowledge the mistake, they're usually more willing to negotiate a settlement rather than face regulatory scrutiny. Keep pushing, Fiona.