Energy Utility Franchise Agreements
The City of Minneapolis has utility franchise agreements with Xcel Energy for electricity and CenterPoint Energy for natural gas. These agreements were signed in the early 1990s, and both expire at the end of 2014. The City is in the early stages of preparing to negotiate new franchise agreements.
This action comes as the City prepares to enter into energy franchise negotiations with Xcel Energy and CenterPoint Energy. State law currently limits Minneapolis’ authority over utilities in franchise agreements; however, the City is seeking legislative changes to allow negotiations with Xcel and CenterPoint to explore how Minneapolis could make progress toward its goals for sustainable energy, improved air quality, equity and green jobs. The City wishes to explore options to achieve its energy goals outside the existing franchise agreement structure including the potential for municipalization of one or both energy utilities.
What is a franchise agreement?
The right of way along city streets and alleys is public property. To connect homes and properties to gas, electric, telephone and other services, companies must run distribution lines on the public right of way. A community negotiates franchise agreements with utility companies to identify the conditions under which a utility company is allowed to use public property to provide service to local residents and businesses. Utility companies pay a fee to the City — negotiated through a franchise agreement — in exchange for use of the public right of way.
Energy Pathways Study
The Energy Pathways Study received by the City Council HECE Committee on February 28, 2014 explores the various paths the City could take to achieve its goals for an affordable, clean, reliable and local energy system. The study includes an examination of multiple pathways to this future, including potential city-utility partnerships, changes to state law or rules, changes to how the City uses energy utility franchise fees, and the potential for municipalization of one or both energy utilities.
Additional resources and information
- Minneapolis' Energy Franchise Agreements FAQ (PDF)
- State legislative changes (PDF) the City of Minneapolis is seeking related to utility franchise agreements.
- A memorandum from the City Attorney’s office (PDF) with additional detail about the franchise agreements and potential next steps.
- The existing Xcel Energy and CenterPoint Energy franchise agreements.
- The state Public Utilities Commission, which regulates utilities in Minnesota.
- City of Minneapolis targets for reducing community wide greenhouse gas emissions. The electricity and natural gas we use in our homes and businesses are the largest source of greenhouse gas emissions in Minneapolis.
- A report outlining the formation of a utility franchise work group (PDF) comprised of City officials and staff.
- Possible outcomes for the new electric utility franchise agreement (PDF), as adopted by the City's Community Environmental Advisory Commission.
- City adopts framework for energy goals
- A new energy vision details what the City of Minneapolis wants from a sustainable, 21st century energy system.
Photo: Maury Landsman.
Published Aug. 16, 2013