Pacific Gas and Electric Company paid the City of Hollister
nearly $175,000 in fees Tuesday as part of its franchise fee
agreement.
Pacific Gas and Electric Company paid the City of Hollister nearly $175,000 in fees Tuesday as part of its franchise fee agreement.
The payment is part of an annual licensing agreement in which PG&E pays the city for the ability to use public streets to run gas and electric service to its customers.
A franchise fee is a percentage of the gross customer receipts paid to PG&E.
Payments are due to counties by March 31, followed two weeks later by fees owed to cities on April 15, according to contracts with PG&E.
“Pacific Gas and Electric Company recognizes the importance of its franchise fee payments to cities and counties during these tight fiscal times,” PG&E President and CEO Gordon Smith said in a statement. “The revenues, in part, support the many important services residents expect from their local government.”
The fees paid to Hollister were divided between $69,000 for gas and approximately $104,000 for electric service franchises and surcharges. The funds can be used for whatever city officials choose.
“This goes into the general fund and helps pay for basic services like parks, police and fire,” City Finance Director Barbara Mulholland said.
Although PG&E made its annual franchise payments on time, the amount was a little less than city officials were hoping for.
“We were expecting about $210,000, but we were close,” Mulholland said. “All of this depends on how people use it.”
The more electricity and gas that people and businesses use, the larger the franchise fees that can be collected and re-issued to the city. Mulholland said she expects the amount in franchise fees paid by PG&E will increase as the utility company comes out of bankruptcy protection.
Mulholland said the city is scheduled to negotiate with the utility company over the next year for a new franchise fee agreement.
In 2001, PG&E paid $145 million in fees to cities statewide. In 2000, it paid a little more than $101 million in fees and surcharges.
