Utility Franchise Negotiations: No news is good news- Is it?

At the July 11th meeting of the Climate and Infrastructure committee of the Minneapolis City Council, Jocelyn Bremmer from the City Attorney’s office gave the basic info that we already knew regarding the City’s Utility Franchise Renegotiations with Xcel and CenterPoint. Understandably, she was not able to reveal any new details of the  ongoing negotiations due to attorney client privilege. We did however get a few good takeaways on record from Ward 7 City Councilmember Katie Cashman, the C & I Committee Chair.

• Chair Cashman asked Bremmer whether utility franchise agreements are also a climate policy document for the city (allowing for revenue generation in support of our city's climate goals) and not just a right-of-way document. Jocelyn Bremmer did affirm “that is the city's position.” Historically, prior to 2013, utility franchise agreements were limited to right-of-way issues like the poles, wires and energy equipment built in city-owned public spaces.
• Chair Cashman concluded the discussion by stating “For me this is really a once in a decade opportunity for us to address the climate crisis and to work together with our utilities to address the climate crisis, aging infrastructure in our city, and prepare ourselves for being resilient to climate impacts like floods, droughts, heat waves and other natural disasters.”

Mayor Frey's office is driving this negotiating process, but there is no information being offered to us on what the mayor's team has asked from the utilities or the timeline of the negotiations. We do know that Xcel Energy, in the past, has pushed very hard in other cities for these negotiations to be done quickly and in their favor. It seems that they might be doing the same with Minneapolis now. 

So, how can we expect this to shake out? After a long period of us not being told anything about the content or the timeline for negotiations, at some point those doing the negotiating will suddenly announce to the city council, “Here's the agreement. Can you vote on it?” 

The mayor’s office and the city council members who will be voting on the eventual agreement at least need to receive messages that the community understands what's at stake, that we care about this opportunity and we're willing to show up and speak out.

There is going to be another presentation on this same topic in front of the same C&I committee on either August 8th or shortly after where we might learn more, and when members of the press might be present.

One Way the Utilities Have Not Been Great Partners

Utility customers in communities of color were more than three times as likely to have their service disconnected, even after accounting for differences in income and housing type, according to a University of MN study. These racial disparities have community advocates pushing for a pause in utility shutoffs. The first step in addressing past harms is to stop present harms, right!

We need the Franchise Agreement to enable the City to Raise more Funds

Earlier in the meeting we heard from City staff that the clean energy homes upgrade programs with the Climate Legacy Initiative (CLI) funds, which offers a 0% interest loan up to $20,000 plus a grant of up to $6000 per household, has run out of money for 2024 and is no longer taking applications. Case in point: we need to ramp-up and fully fund all CLI programs to meet existing and growing demand.

Letter to the Editor in Star Tribune from our External Co-Director:

City needs tough agreement on utility fees

We’ve recently seen two of the hottest days ever recorded on Earth, and 2023 was the hottest year “almost certainly” of the last 120,000, according to the European Union’s Copernicus Climate Change Service. But I won’t bore you with more of that old news.

Right now, in Minneapolis, the mayor’s office is negotiating new franchise agreements with our utilities, Xcel Energy and CenterPoint Energy (“Minneapolis’ once-a-decade chance to fight for energy and the climate,” June 14). It’s a big deal. Franchise agreements were once seen as simple right-of-way agreements for the utilities stringing their wires and laying their pipes; but they’ve evolved to become climate change documents, agreements that help chart the course for the city’s clean energy transition.

As things are getting hotter, the utilities should at least commit to clear, enforceable annual performance metrics with consequences for failure to meet city goals. They have monopoly power, after all, and it seems a humble request that they be held accountable to benchmarks so that we all can see how it’s going. Are we actually transitioning to a clean energy future? While the utilities own and profit from the vast majority of the energy assets in our city, it’s our air, our climate and our future. We need to be included in the conversation.

BRIAN KROHNKE, Minneapolis

Update: Minneapolis’ Utility Franchise Negotiation with Xcel Energy to be extended

The Minneapolis City Council has begun approving a new ordinance to extend the pre-existing utility franchise agreement with Xcel Energy for 6 months, until April 17th, 2025. The initial expiration date of the agreement, signed on October 17th, 2014, had been October 17th, 2024. For more on this non-controversial extension that was agreed upon by both parties (Xcel and the City) see here for the presentation to the City Council’s Climate and Infrastructure committee from September 26th. 

Why is this change significant? This leaves more time for the city to negotiate a new agreement with Xcel Energy that would satisfy the conditions that Community Power and others in the Just Transition Fund coalition have articulated in our blogpost and shared in earlier newsletters. In turn, this extension also means that there will not be a disruption of the Climate Legacy Initiative Funds. 

The City is also in separate utility franchise negotiations with CenterPoint energy. There is no motion on the table to extend it because CenterPoint’s franchise agreement expires at the end of the year and negotiations are expected to conclude before an extension is needed.  

After a new franchise agreement is announced, then there will be public hearings for Community members to speak to the city council before the council members vote to approve either the newly renegotiated franchise agreements. The public hearings will likely be at different times, with CenterPoint’s one being late this year with Xcel’s being early next year. Stay tuned to future newsletters for public hearing dates.