Negotiating a franchise agreement in a competitive environment
- Trigsn-Peoples District Energy Company, Chicago, IL (United States)
In urban centers where there is more than one district energy company, the administrative branch of municipal government is in a position to manipulate its taxing policy for the use of the public right of way by advancing the goal of {open_quotes}remaining revenue neutral.{close_quotes} In order for a district energy company to be successful, it must be able to produce energy more efficiently. Greater efficiency in the production of energy creates a dilemma for a municipal government. A city government depends on a number of revenue producing sources to fund its annual operating budget. Taxing energy demand by commercial customers is one source of revenue. Thus, in effect, reducing energy demand through increased efficiency will reduce the revenue a city receives by taxing demand. As this relates to a district energy company, the city must determine how to replace the revenue that was previously generated by taxing demand of high energy use production equipment by looking to district energy companies to replace this revenue. Negotiating a franchise fee for use of the public right of way for distribution piping is one way a city can attempt to recoup lost revenue. In a market where there is competition between district energy companies, the city can leverage its position as the granting authority.
- OSTI ID:
- 96178
- Report Number(s):
- CONF-9506165--
- Country of Publication:
- United States
- Language:
- English
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