Utility franchises reconsidered
It is easier to obtain a public utility franchise than one for a fast food store because companies like Burger King value the profit share and control available with a franchise arrangement. The investor-owned utilities (IOUs) in Chicago and elsewhere gets little financial or regulatory benefit, although they do have an alternative because the franchise can be taken over by the city with a one-year notice. As IOUs evolved, the annual franchise fee has been incorporated into the rate in a move that taxes ratepayers and maximizes profits. Cities that found franchising unsatisfactory are looking for ways to terminate the franchise and finance a takeover, but limited-term and indeterminate franchises may offer a better mechanism when public needs and utility aims diverge. A directory lists franchised utilities by state and comments on their legal status. (DCK)
- OSTI ID:
- 5714033
- Journal Information:
- Public Power; (United States), Vol. 39:6
- Country of Publication:
- United States
- Language:
- English
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