Quick question for the group - I've got a church client in Corpus Christi that's been getting franchise fees on their AEP Texas electric bills. From what I understand, religious organizations should be exempt from municipal franchise fees under Texas law. The monthly charge is only $18.50, but it's been going on for two years. Am I right about the exemption, or do franchise fees apply to everyone regardless of tax-exempt status?
AEP Texas charging franchise fees on exempt customers?
Vivian, you're absolutely right about the exemption. Religious organizations, schools, and other tax-exempt entities shouldn't be paying franchise fees in Texas. I've dealt with similar issues with Oncor here in Lubbock. The utilities often don't properly screen for exempt customers in their billing systems. Your church client should get a full refund of those charges plus interest. File the exemption paperwork with AEP and demand immediate correction.
Dean's correct about the exemption. Alabama Power had similar billing errors with churches and nonprofits here in Huntsville. The key is providing proper documentation of tax-exempt status to the utility. Most franchise fee billing is automated based on customer class codes, so exempt organizations often get missed. Two years of $18.50 monthly adds up to $444 - worth pursuing for sure. AEP should reverse those charges once you provide the exemption documentation.