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Chaska council adopts electric franchises and a 5% franchise fee for Minnesota Valley and Xcel
Summary
After a months-long process the council adopted four ordinances granting electric utility franchises to Minnesota Valley Electric Cooperative and Northern States Power (Xcel) and implemented a 5% franchise fee; the council also approved publishing ordinance summaries per state statute.
The City of Chaska on June 16 adopted ordinances granting electric utility franchises to Minnesota Valley Electric Cooperative and Northern States Power (Xcel) and implemented a 5% franchise fee for both utilities.
City staff said the change creates parity across utilities that use the city’s public right-of-way and will provide funds to acquire and maintain rights-of-way and protect city-managed infrastructure during construction. “We impose these franchise fees as a way of providing resources to acquire the right of way to maintain the right of way and to ... ensure that those utilities are not damaged and services not interrupted,” a staff member said during the presentation.
Why it matters: the council previously set a 5% franchise fee for CenterPoint Energy in 2014 and staff told the council the new ordinances align Minnesota Valley and Xcel with that treatment. Staff estimated there are roughly 12–15 Xcel customers inside Chaska and just over 400 Minnesota Valley Electric customers in the northwest portion of the city.
Council action: the council moved through four ordinance adoptions and a companion resolution approving summary publication. Motions to adopt the ordinances and Resolution 2025-532 (summary publication of ordinances 2025-1063 through 2025-1066) passed on council votes: Ordinance 2025-1063 (granting Minnesota Valley franchise) was moved by Council Member Hatfield and seconded by Council Member Graf; Ordinance 2025-1064 (franchise fee on Minnesota Valley) was moved by Council Member Shevlin and seconded by Council Member Benesch; Ordinance 2025-1065 (granting Northern States Power franchise) was moved by Council Member Benesch with a second from Mayor Hubbard; Ordinance 2025-1066 (franchise fee on Northern States Power) was moved by Council Member Chevlin and seconded by Council Member Graf. The council also approved a staff request to publish ordinance summaries per state statutes instead of full text as a cost-saving measure.
Implementation notes: staff said full ordinance texts have been posted on the city website for more than ten days and the final forms will remain available online. City staff and utility representatives present at the meeting said they reached an agreed form after multiple rounds of review and that the new ordinances will allow the city to collect and use franchise fees for right-of-way maintenance and related work.
The council’s actions were presented as the culmination of a multi-year process; staff and utility representatives who worked on the agreements were acknowledged at the meeting.
