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  • Writer's pictureKent Hobart

Franchise Fees



Franchise Fee, It's there at the bottom of your bill every month. What is it and why is it adding another five percent to my bill? More importantly can I get rid of that charge?


When utilities want to begin serving customers inside the jurisdictional boundaries of a municipality they need the municipality's permission to serve those customers. Municipalities give that permission through negotiated franchise agreements that typically give the utilities an exclusive right to provide service and also permit them to use the public right-of-way along roads and streets as corridors for utility pipes, wires and cables.



In exchange the municipality gains access to utility services for its citizens and a negotiated revenue stream equal to a percentage of the revenue the utility generates providing service within the city. This negotiated revenue stream is commonly called a Franchise Fee and can range anywhere from three to eight percent of the utility's billed revenue.


Utilities recover this cost from customers through the line item you see on your bill, collecting the dollars from you and turning them over to your municipality. If you are located outside the city limits and see a Franchise Fee on your bill, there's a good chance you shouldn't be paying it. But if your buildings are located within the city limits, then the Franchise Fee is there to stay. Franchise agreements tend to have terms of ten years or more, so good news your city's franchise fee likely won't be increasing anytime soon.


Still have questions? Call us at (813) 917-8952 and let us help with an answer.

 

Hi, I'm Kent Hobart and I'm different. I've been blessed with a knowledge of utility billing and rate structures that is rare and yes, a little weird.


I started Utility Refund Specialists as a way to use my unique skills in serving organizations like yours. We audit our client's utility bills and identify errors in the billing that earn them refunds from their utility providers. I know, it sounds crazy but 3 in every 4 clients we work with have errors in their bills.


The incidence of errors is so frequent and the refund amounts are large enough, we can perform the audits for free. We only get paid after we secure you a refund!


Interested in learning more? Use this link to set up a 30- minute discovery call. Want to talk sooner, give me a call at (813) 917-8952 or send me an email.


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