The Chaska City Council on Monday adopted a new 20-year franchise agreement with CenterPoint Energy and replaced an 11-year fixed-fee structure with a straight 5% franchise fee, aligning the gas utility arrangement with recently renewed electric utility agreements.
City staff said the existing agreement was last renewed in 2010 and the city established a franchise fee with CenterPoint in 2014 using fixed customer charges intended to generate roughly a 5% return; that structure produced roughly a 4.25% effective rate in 2024. City staff recommended moving to a straight 5% fee and updating the franchise agreement’s language to match recent agreements with electric utilities.
Nut graf: The ordinances formalize utility access to public rights-of-way, update contract language and convert the fee calculation method so gas utility franchise revenue is percentage-based rather than a set fixed charge, which staff said simplifies administration and aligns the gas franchise with electric utility practice.
City staff described operational reasons for franchise agreements: utilities place infrastructure in the public right-of-way, and the city incurs costs to manage and maintain that right-of-way and to coordinate utility relocations. The staff presentation noted recent construction along Angler Boulevard as an example of multiple conduits and relocation coordination.
The council approved three separate actions: (1) adoption of ordinance 2025-1069 establishing the CenterPoint Energy gas franchise (motion by Council Member Graff, second by Council Member Benesch); (2) adoption of ordinance 2025-1070 imposing the 5% franchise fee (motion by Council Member Benesch, second by Council Member Chevlin); and (3) adoption of resolution 2025-48 to publish the ordinances in summary form (motion by Council Member Chevlin, second by Council Member Graff). Each motion passed with council members responding “aye.”
Discussion versus action: The council’s votes were formal adoption of ordinances and a resolution. Staff noted that full ordinance texts are available on the city website and that summary publication is a cost-saving public-notice method. No amendments were offered at the meeting.
Ending: Staff said CenterPoint and city legal counsel had negotiated the updated agreement language and that the agreements will be published in the city’s municipal code. The franchise fee change will take effect per the adopted ordinance schedule.