3 time loser

[cinnamonjock]

What are the implications of this? The mayor said something about getting the courts involved and apparently they've been working on a "handshake agreement" this whole time.

[FighttheGoodFight]

What are the implications of this? The mayor said something about getting the courts involved and apparently they've been working on a "handshake agreement" this whole time.

From an econ professor at OU had a good overall summary for it.

"CYNTHIA ROGERS

OU PROFESSOR OF ECONOMICS

On March 5, Norman voters get the opportunity to vote on a 25-year franchise agreement with OG&E for a second time. Unfortunately, there has been a lot of misinformation about the nature of franchise agreements. What exactly does a franchise agreement entail?

OG&E is a for-profit corporation operating as state-granted monopoly in its service areas in Oklahoma. The State requires utilities such as OG&E to obtain voter-approved franchise agreements. A franchise agreement sets out the terms which allows OG&E the right and privilege to generate, distribute, and profit from electric service in a municipality.

Franchise agreements are not one-size fits all. Many electric utility companies have different agreements for different municipalities in their service areas. Oklahoma statutes specifically allow municipalities to negotiate terms that are put to a public vote.

The only common feature of franchise agreements is right of way access, which allows the utility to access and maintain infrastructure without obtaining permits. Right-ofway access can be granted without a long-term agreement as is done in hundreds of communities across America.

Norman allows OG&E right of way access even though the last OG&E franchise agreement expired in December of 2018. According to case law mentioned by City Attorney Walker, the previous agreement continues as an implied contract unless either party decides to withdraw.

OG&E could decide to stop selling electricity to Norman customers, which would require them to remove or sell their equipment from City right of ways.

Other cities in Oklahoma, including Edmond and Stillwater have cityowned electric utilities.

A second common (but not universal) feature of a franchise agreement is the franchise fee, which is a percentage of gross revenues (your electric bill) that OG&E collects and remits to the city. It is a city tax added to your electric bill in which OG&E agrees to serve as the tax collector. The tax goes into the city’s general revenue fund. Some cities do not collect a franchise fee and others collect fees as high as 6%.

Norman’s expired OG&E franchise agreement imposes a 3% franchise fee and allows for an automatic increase if any municipality in Oklahoma increases their franchise fee. The fee functions as a tax which impacts energy costs and funds local government services. Broken Arrow residents approved a franchise agreement with the Public Service Company of Oklahoma that has a 2% franchise fee and a 1% fee for economic development.

A third common feature of franchise agreements is a rebate of energy costs to host municipalities. This can range from a set dollar amount, a percentage of kilowatt hours (KWH) used for municipal purposes, or a percentage of overall KWH used by municipal customers. Norman’s expired OG&E franchise agreement set the rebate at .5% of KWH used by Norman customers. This covers part of Norman’s municipal energy use for streetlights.

Franchise agreements can also include other requirements. In June of 2022, voters in the City of Enid approved a 25-year franchise agreement which included five years of annual $100,000 grants for economic development purposes and upgrades of certain streetlights in the city.

Franchise agreements can also include opt out or termination clauses. In 2001, voters in the City of Warr Acres approved an OG&E franchise agreement with an option to terminate the agreement by resolution at the end of the fifth year from the date of acceptance.

The franchise agreement is not just about access to easements as OG&E has claimed. It is certainly not about keeping the line maintenance employees working either! A franchise agreement sets out conditions by which OG&E gets the right and privilege to profit from selling electricity in Norman. A franchise agreement is the only real tool that customers have regarding the quality of service and infrastructure investments in our community.

OG&E spent a lot of money via an initiative petition process to get its boiler-plate franchise agreement back on the ballot. It is the same agreement that voters rejected in January 2022. Voting NO on March 5 is a vote to bring OG&E to the negotiating table.

Norman voters can demand opt out clauses to avoid underinvestment, grants for economic development, increased underground lines, and increased use of renewable energy. These are not fantasies. Other communities negotiate agreements to fit their priorities. Norman can too.

Please mark your calendars and vote March 5."

[cinnamonjock]

From an econ professor at OU had a good overall summary for it.

Thanks for this and I wish I would have read it before yesterday. Seems like the Norman mayor has zero interest in negotiating with OG&E, but, from the sound of this, he will now be compelled to do so if he wants the franchise agreement to pass.