The Clinton Herald, Clinton, Iowa

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October 10, 2012

Clinton approves franchise agreement with Alliant

CLINTON — A new franchise agreement between the city of Clinton and Alliant Energy for electric and natural gas, complete with unenforced franchise fee language, was approved Tuesday night by the City Council.

The agreement details the protocols when Alliant is performing work in the city right of way, or when the City is performing work that requires Alliant to move its infrastructure, among other items.  

The last agreement with Alliant, which the city entered into in 1988, did not expire until December 2013.

Among the new items in the agreement is the franchise fee, which would allow the City to collect a certain percentage of customers’ bills in order to generate revenue.  In these cases, Alliant acts only as the collector and does not receive any of the percentage.

Franchise fee talks were on the table in November of last year, with City Administrator Jeff Horne proposing a 3 percent fee, 2 percent lower than allowed by Iowa law.

If that fee would have been implemented, the city would have raised approximately $2.4 million annually. A household with a $250 per month Alliant bill would pay around $90 a year in franchise costs.

However, implementing a fee was not discussed during the discussion of the new agreement this year.  

On the contrary, Council members discussed how common it is for agreements to contain fee language without having one in place.  

According to Keith Sherman, Franchise and Community Relations manager for Alliant Energy of the 82 franchise agreements that have fee language in them, only 35 franchises actually have franchise fees.

If the City was interested in implementing a fee, a public hearing on the franchise fee would be held first. Following the public hearing, the City Council would need to vote. After the first two steps were completed the public or council could push for a referendum.

The new agreement also features a clause that will allow the city the opportunity to cancel the agreement after 10 years.

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