Rochester Staff Recommends Shelving Natural Gas Franchise Fee

Rochester, MN (KROC-AM News) - The Rochester City Council is being asked to put consideration of a natural gas franchise fee on the back burner.

3 Month Public Engagement Effort

City staff is scheduled to give a presentation to the City Council during a study session on Monday concerning the results of a community engagement process that took place over the past several months to gauge the public's views about a proposal to collect a franchise fee from natural gas utilities in exchange for the use of public right-of-way. The public engagement included an online survey, in-person and virtual listening sessions, presentations to community and business organizations, as well as direct outreach through partner networks.

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City officials say more than 3,600 community members were reached through dozens of outreach and engagement activities. Just over 200 people responded to the online survey.

Mixed Opinions

According to city staff, the community feedback on the issue was mixed. The presentation materials say community members expressed “generally supportive views toward the concept” of a natural gas franchise fee, but the feedback reflected no clear consensus on the fee structure and raised ongoing questions about fairness, administration, and impacts on households and businesses.

Expressions of Generalized Support…But

The presentation says 61% of the people who participated in the survey and other community engagement events support using a franchise fee in some form. It also shows that more than two-thirds of them would support a fee of only a dollar a month or less. Only 5% would back a fee of $5 a month.

Business Opposition

City staff also noted that business interests in the community are not supportive. Sixty-three percent expressed opposition to a natural gas franchise fee, citing concerns about competitiveness, administrative complexity, and passing the costs through to customers.

Staff Recommendation

In light of the feedback, city staff is recommending that the City Council not pursue a natural gas franchise fee at this time. The report does recommend developing and implementing one or two pilot initiatives focusing on energy cost reduction, housing improvements, and community-based initiatives accessible to renters and a broad range of residents before considering a long-term funding plan for such programs.