Franchise agreement between city and YVEA approved for next 20 years
STEAMBOAT SPRINGS — Steamboat Springs City Council approved a new 20-year franchise agreement with Yampa Valley Electric Association after a lengthy negotiation process that began last July.
For a fee, the agreement allows YVEA to use city-owned streets, alleys, right-of-ways and other easements and property to provide electric service to their customers.
According to the city charter, the agreement must cover a term not exceeding 20 years.
Negotiations involved dozens of meetings over nearly nine months and two extensions, during which the document grew from 19 to 40 pages, City Manager Gary Suiter said.
The agreement was approved in a 6-0 vote at the council’s Feb. 11 meeting. Council member Sonja Macys, who serves on the YVEA board, abstained from voting.
In part, the process was lengthy because of the technical — and legal — nature of many of the issues included in the agreement and the fact that it involved planning 20 years into the future.
“There’s a lot to think about,” Suiter said.
City staff worked hard to make the agreement clear, he said, approaching it while asking questions like, “How is this going to work when none of us are here anymore?” and “What is electric generation and distribution going to look like in 20 years?”
Portions of the prior agreement, approved in 1999, remained the same but with added clarification. There were also a number of updates and new provisions.
And there were some contentious issues that led to longer than expected negotiations, Suiter said.
At the Feb. 11 meeting, City Attorney Dan Foote told council about two “highlight” issues on which compromises were reached.
The first relates to “YVEA’s agreement to refrain from requiring its customers to provide private utility easements outside of setback areas.”
In an effort to protect private property owners, developers and property value, Suiter said the city reached an agreement with YVEA that the utility would not exceed the existing setbacks already established under community development and land codes.
Another point of contention was about the number of outdoor lighting fixture options available in YVEA’s inventory. The city wanted more than the three that existed, Suiter said, while YVEA wanted to keep its maintenance and supply requirements minimal. He said the city gets frequent requests from developers for different designs and was looking for a little more flexibility.
YVEA agreed to add two more options, he said, and the city agreed to pay for the fixtures and insulation if used. And if they aren’t tied into an existing meter, the city agreed to pay a tariff.
Council discussed the franchise fee — a 4% additional charge listed on every electricity bill — that is a cost YVEA passes onto customers.
That 4% fee remains the same under the new agreement; however, the city has the ability to raise it, though not by more than 0.008% during a five-year window.
The city collects approximately $2,200 per day through the franchise fee. Suiter said a 3% to 4% fee is in line with what other cities collect.
Of the 4% franchise fee, 1% is dedicated to “undergrounding” — the moving of overhead lines underground. The city recently completed a major undergrounding project on Yampa Street using the franchise fees. Council President Jason Lacy said that project used the entirely of the undergrounding that had built up over many years to over $1 million.
It’s an expensive process, noted Council President Jason Lacy, though it’s something the city would love to do more of downtown.
Reasons for undergrounding are primarily aesthetic, with safety another consideration, Lacy said. Suiter noted that overhead lines are typically considered safer to maintain from a utility company’s perspective.
YVEA is not required to underground any of their lines, Foote said, though there is a provision in the agreement that allows the city to request that the company relocate lines underground. In that case, it would have to be a project that met YVEA’s requirements, and the city would pay the difference in cost.
Council member Kathi Meyer questioned the process around the agreement. She expressed concern about the recommendation from the city staff against tabling or rejecting the ordinance, saying that “re-opening negotiations may not be fruitful and would require significant commitment of senior staff time. … Negotiations could continue without a franchise agreement but would likely result in YVEA not collecting and the city not receiving a franchise fee.”
Meyer said after nine months of negotiating, she felt four days was not sufficient time for council members to “think about impacts for the next 20 years.”
After the meeting, Suiter acknowledged he could have done a better job giving council regular updates throughout the process.
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