Title
AN ORDINANCE ESTABLISHING THE FRANCHISE FEE TO BE PAID BY MINNESOTA POWER UNDER THE FRANCHISE GRANTED BY ORDINANCE NO. 10980, FILE NO. 26-035-O.
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CITY PROPOSAL:
The city of Duluth does ordain:
Section 1. Purpose and Intent. Pursuant to Section 10 of Ordinance No. 10980, the City will impose a Franchise Fee on Minnesota Power. The purpose of the Franchise Fee is to collect a fee to be paid by Minnesota Power based on its operations within the City.
Section 2. Notice. The City shall serve Notice of this Ordinance on Minnesota Power by certified mail.
Section 3. Franchise Fee. The City hereby requires Minnesota Power to collect a Franchise Fee from retail customers within the City limits, as follows:
(a) Said franchise fee shall apply to all electric service within the city, except electric service to property owned by the City. This franchise fee shall be added to each Minnesota Power customer’s monthly electric service bill, except bills for service to the City;
(b) The amount of the franchise fee to be assessed shall be the applicable assessment rate multiplied by the customer’s bills for electric service. The applicable assessment rate shall be a percentage of Minnesota Power’s Gross Revenues for service within the city and as applied to customers’ bills for electric service through Minnesota Power’s Rider for City of Duluth Franchise Fee as approved by the Minnesota Public Utilities Commission;
(c) The total amount assessed to any Minnesota Power customer pursuant to subsection (b) shall not exceed $500,000 per year;
(d) The applicable assessment rates for customers (as defined by Minnesota Power’s customer classifications) shall be as follows:
a. 4.75% for Large Light and Power Customers
b. 4.25% for General Service and Commercial Customers
c. 3.00% for Residential and Residential Dual Fuel Customers
(e) The annual assessment rate determined above shall be applicable to all bills in Minnesota Power’s billing cycles of the year;
(f) One hundred percent (100%) of the city’s franchise fee assessment collected by Minnesota Power shall be paid to the city; and
(g) The franchise fee collected by Minnesota Power shall be payable to the city monthly with each payment due on the first day of the month.
Section 4. Exemption. No Franchise Fee will be imposed upon: (i) a meter if the City has notified Minnesota Power that such meter services property owned by the City; or (ii) those meters servicing property owned or leased by Minnesota Power.
Section 5. Collection of Fee. Implementation, collection and payment of the Franchise Fee will be as provided in Section 10 of City Ordinance No. 10980, subject to any additional requirements imposed by order of the Minnesota Public Utilities Commission.
Section 6. Effective Date. This Ordinance shall be effective in accordance with the Effective Date in Section 16 of Ordinance No. 10980.
Statement of Purpose
STATEMENT OF PURPOSE: The Franchise Fee Ordinance establishes the fee to be paid by Minnesota Power to the City of Duluth as authorized in Ordinance No. 10980, File ID 26-038-O. The Franchise Fee Ordinance has been separated from the Franchise Agreement Ordinance to allow for easier modification, should that be appropriate.