Franchise Fees
Idaho Power customers have a portion of their bill designated as a franchise fee. This fee reflects part of the amount Idaho and Oregon cities charge Idaho Power for placing power lines on city property. Idaho Power signs a “franchise” with city governments for this privilege. The fees are collected by Idaho Power and passed directly to the local government entity. The fee may be between 1% and 3% of the customer’s bill, depending on applicable government regulations. Read on for more details about franchise fees.
What is a franchise?A municipal franchise authorizes a utility to use city streets and alleys for the location of equipment and facilities. For Idaho Power, this pertains to locating electrical equipment necessary to provide an essential service. Franchise agreements may also restrict a city’s right to compete with a utility’s service to city residents. A city franchise doesn’t grant Idaho Power the right to serve customers. The respective public utilities commissions grant that right.
What is a franchise fee?It is a charge to the utility from the city, usually based on a percentage of the utility’s gross revenues collected from customers located within the city limits.
Who pays the fee?Ultimately, the customer does. Idaho Power serves an administrative role by collecting the fees and turning the revenues over to the city.