Utility Franchise Matters

Many franchises for utility service are nearing the end of their term. The effects of the Federal Energy Regulatory Commission (“FERC”) Order No.636 which deregulated natural gas pipelines are now evident in local gas distribution markets. Likewise, the impacts of FERC Order Nos. 888, 889 and 2000 are beginning to have dramatic effects on the planning and operation of electric utilities throughout the nation. At both the federal and state levels, new laws and regulations are expanding the level of deregulation of the electric utility industry to provide for competitive open access at both the wholesale and retail levels. Additionally, and in part as a result of the implementation of Federal Clean Water Act provisions, water utilities are experiencing increased scrutiny regarding their level of service, water quality and quantity, as well as the price customers are being required to pay. As the utility industry becomes more competitive, municipalities need to be concerned with maintaining General Fund revenues while experiencing the potential erosion of the franchise fees as a funding mechanism.

Accordingly, ERG offers complete Franchise Evaluation and Support Services, including the following:

  • Existing franchise provision audit
  • Competitive market issues strategy development
  • Evaluation of franchise terms and conditions
  • Franchise bidding program development
  • Negotiation of revenue enhancement provisions
  • Franchise fee analysis and negotiation
  • Negotiation of forward looking franchise agreements
  • Risk analysis
  • Litigation Support & Expert Testimony

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