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City of New HopeMinnesota

Franchise Fees

New Hope City Council approved an ordinance amendment raising gas and electric franchise fees for the first time since 2016 at its Nov. 28, 2022 meeting.

What is a franchise fee?

Under Minnesota Statute §216B.36, cities can establish franchise agreements with utility companies if the utility companies use the public rights-of-way to deliver service. These franchise agreements allow utility companies to use public property adjacent to roadways. Under the statute, cities may determine the amount of the fees, or franchise fees, charged. Once the city and utility companies establish a franchise agreement, they typically pass franchise fees on to their customers, which appear as a line item on billing for a "city fee." The utility companies collect the fee and remit payment directly to the City.

New Hope's use of franchise fees enables a diversified revenue stream and provides a stable funding source, which the City can use for any public purpose.

How does the City use franchise fees?

New Hope plans to use 39% of the utility franchise fees toward the City's general fund, with the remaining 61% used for the street infrastructure fund toward maintenance of the City's streets. Examples include seal coat, mill and overlay, full-depth reclamation and reconstruction projects.

When will the franchise fees be implemented?

The new franchise fees will begin in March 2023.

How much are the franchise fees?

The amount of a franchise fee depends on how a property is classified.

Electricity (Xcel Energy)

  • Residential: $4/month
  • Small Commercial and Industrial – Non-Demand: $7/month
  • Small Commercial and Industrial – Demand $31/month
  • Large Commercial and Industrial: $135/month

Gas (CenterPoint Energy)

  • Residential: $4/month
  • Commercial A: $5/month
  • Commercial/Industrial B: $14/month
  • Commercial/Industrial C: $47/month
  • Sm Vol, Dual Fuel A (SVDF A): $90/month
  • Sm Vol, Duel Fuel B (SVDF B): $100/month
  • Lg Vol, Duel Fuel (LVDF): $190/month

How much does New Hope expect to receive in revenue through franchise fees?

According to estimates, the City of New Hope expects to receive an annual total of $1,140,000 in utility franchise fees. This number varies depending on the number of customers billed.

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