Following last week’s payment of $75 million in local property taxes, bankrupt Pacific Gas and Electric Co. announced Monday that it had paid $113 million in 2002 franchise fees to 290 cities and counties in which it operates over the northern two-thirds of California.
The combination utility paid $78.6 million for electric and $34.4 million for gas service franchises and surcharges, with the gas fees dropping nearly in half, compared to 2001.
As another reminder of the softening of the wholesale energy markets after the unprecedented price spikes in 2001, last year’s total franchise payments were $32 million less than their totals in 2001 when they reached what the PG&E utility called an “unprecedented” $145 million ($72.3 million for gas and $73.1 million for electricity). The fees vary annually depending on the costs utility customers pay for gas and electricity. In 2000, they totaled $101 million, for example.
The franchise fee is based on a percentage of gross customer receipts received by the utility. The fees are paid to cities and counties for the right to use public streets to run gas and electric services. A franchise surcharge is based on a percentage of the transportation and energy costs to customers choosing to buy their energy from third-party suppliers, and in this case, the utility serves as the “collection agent,” passing the fees on to the local government entities.
Payments were made between March 31 and Tuesday (April 15). CEO Gordon R. Smith emphasized that the utility recognizes the importance of these fees for the cities and counties in the current tight fiscal times they face. The revenues, he said, help support the local police, fire, education, public health and environmental services that citizens (and utility ratepayers) expect.
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