Gas and electricity franchise fees are an important revenue source for cities. However, in spite of their significance, franchise fee receipts are rarely scrutinized. Instead, cities receive their payments year after year with little explanation or supporting documentation, and assume that utilities have performed the franchise fee calculations accurately. This approach can be costly.

UCM offers risk-free audits to ensure that cities receive the franchise fees to which they are entitled. If we uncover errors that result in increased franchise fee receipts, then we're paid a percentage of additional revenues -- otherwise, there is no fee for UCM's service.

Franchise fee calculations are based on hundreds of figures that are compiled from internal utility company data that the cities cannot access. There are various assumptions built into the figures that have not been discussed with the cities, much less approved by them. Many of these assumptions have not changed in nearly 100 years, even as there have been dramatic changes in the utility industry and the way energy is used. Furthermore, the complexity of the calculations and the underlying assumptions make it difficult for city officials to initiate informed inquiries that can shed light on the utilities' methods.

For all of these reasons, UCM believes it is important to shine a bright light on utilities’ franchise fee calculations to ensure that they are accurate.

Increases in utility charges in recent years make this an ideal time to analyze franchise fee receipts, as the potential dollars at stake are greater than ever. Contact UCM today, and we'll make sure your city is paid the full amount it is owed for franchise fees.