Power Play: Cities Fight Utilities Over Fee Legislators Tell Sides To Try For Compromise By Wednesday

Idaho power and utility companies asked the Legislature Friday to pass a bill limiting the franchise fees cities and counties can charge them.

Legislators told the power and utility officials to sit down with city and county officials to fashion a compromise before Wednesday. Neither side expressed much optimism that an acceptable deal would come from those talks.

Franchise fees often appear as a few extra dollars at the bottom of power, cable and other utility bills. Cities get the money for their general funds.

Coeur d’Alene Mayor Al Hassel told the committee the bill would strip power from his and other Idaho cities.

“This bill would give all the strings to the power company,” Hassel said. It is not as if the power companies get nothing in return for the fee, he said. “They’re paying for a monopoly.”

Hassel said that 83 percent of Coeur d’Alene voters favored raising franchise fees from utility and cable TV companies to pay for road improvements. “Executives in an office building are not elected; they’re not accountable to the public.”

A subcommittee will bring the two sides together in the next few days. North Idaho legislators likened the battle to another dispute requiring mediation.

“It’s kind of like Congress mediating the baseball strike,” said Rep. Tom Dorr, R-Post Falls. Like the baseball players, the cities don’t want any cap on how much they can ask utilities to pay. Like the team owners, power companies want to control their costs.

“We have to stop the expansion of franchise fees,” said Pat Harrington of Idaho Power. The bill would limit the fees in some cases to 3 percent of the bills charged. “There are new fees where none previously existed, and additions to fees that already exist.”

Coeur d’Alene’s Kootenai Electric Cooperative has a 5 percent franchise fee with the city, said Allison Kratt, spokeswoman for the cooperative. But the company wasn’t aware of Friday’s bill, she said.

Cities say asking for a break in the fees would make it much harder for local government to make ends meet, especially while trying to cut property taxes. They say the fees are a good deal for utilities who use city streets and rights of way.

“We’ll have higher reliance on property taxes if we decrease franchise fees,” said Boise City Council member Paula Forney.

Local government officials said they thought the bill would bring the state into disputes between cities and utilities, and unreasonably weaken the cities’ bargaining ability. Some city representatives thought passing legislation was unnecessary since some cities have good working relationships with utilities.

“Why should the state as a whole be penalized?” Hassel asked.

Rep. Jeff Alltus, R-Coeur d’Alene, said he didn’t approve of taking power from local government. Cities have been using the fees for their general fund needs, which makes the charge a tax. Limiting fees would be like limiting the power of the city to tax.

Alltus said he didn’t understand why the power companies would have such an interest in this because the franchise fees are simply passed on to customers as an added cost.

Dorr said that he has no problem with local entities collecting taxes, especially if it offsets property taxes. But he cautioned that cities “should call it what it is - it’s truly a hidden tax. They know the public hates to hear the word tax.”