Minneapolis committee hears hours of public testimony on proposed gas and electric franchise fee increases; vote continued

Council’s Climate and Infrastructure Committee heard a two-hour presentation and more than 50 minutes of public testimony on Nov. 13 on proposed amendments to the city’s gas and electric franchise fee ordinances that would raise rates across several utility customer classes and align fee categories with the utilities’ rate schedules.

The committee’s legal briefing, delivered by Jocelyn Bremer of the City Attorney’s Office, cited Minnesota Statute 216B.36 as the city’s authority to enter franchise agreements and to charge fees to defray municipal costs related to utility operations. Bremer said the proposed ordinance updates would align the city’s fee categories with the classes utilities use when they file rate books with the Minnesota Public Utilities Commission.

Luke Hollenkamp, a sustainability program manager, outlined the staff estimate that the proposed changes would generate about $5 million in additional annual revenue based on 2024 data and said the authors intend for the incremental revenue to support the Climate Legacy Initiative. Hollenkamp summarized the proposed percentage increases by customer class and estimated the average residential household impact at roughly $10 per year.

The proposal drew sharply different responses during the public hearing. Suzanne Murphy, community relations manager for Xcel Energy in Minneapolis, said the utility was "disappointed in the insufficient process and engagement" and asked the committee not to approve the ordinance. Kat Knudson of CenterPoint Energy similarly said her company could not support the gas franchise fee increase and criticized the level of outreach and analysis.

By contrast, scores of residents, nonprofit leaders and environmental advocates urged council members to raise fees by larger amounts so the Climate Legacy Initiative and green-cost-share programs would not run out mid-year. Leslie Jackson, a long-time green-zones advocate, accused the city of failing to deliver on a prior commitment: "You promised 40%, you delivered 11%," she said, urging reinvestment in environmental justice areas. Justice Jones, representing a Northside organization, told the committee staff and officials had presented contradictory data to community members, calling for clearer, consistent reporting.

Deputy Commissioner Patrick Hanlon and other staff defended program targeting and data. Hanlon said the most recent snapshot (10/16) showed 54% of residential program funding going to environmental-justice projects, and staff reported a year-to-date EJ project dollar share of about 60% for 2025; he also said 13% of program dollars went to the North Side Green Zone and that between 2024 and 2025 roughly 2,464 low-income households benefited from these programs. Hanlon said additional program tools to reduce upfront costs would be piloted in 2026.

Committee members pressed staff for more detail on how increased revenue would be distributed across customer classes and how much additional burden commercial and industrial ratepayers would bear. Council Member Rainville asked for a breakdown of expected revenue by customer class before the full council votes. Chair Katie Cashman said she wanted staff to circulate the memos and slide materials to committee members.

Because committee members requested more information and time to consider the utilities’ procedural concerns and community requests for transparency and targeting, the committee voted by voice to continue consideration of the franchise-fee ordinance amendments to the Climate & Infrastructure Committee on Dec. 4 and to the full City Council on Dec. 11. No committee vote occurred on the substance of the ordinance on Nov. 13.

The committee asked staff to provide the requested revenue breakdowns, documentation cited during public testimony and clarification on program distribution ahead of the Dec. 4 committee meeting.