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Town Council Seeks Public Input on Proposed Holy Cross Energy Franchise Fee Increase

  • 15 March 2019
Town Council Seeks Public Input on Proposed Holy Cross Energy Franchise Fee Increase

The Vail Town Council is seeking input from the community on a proposed franchise fee increase between the Town of Vail and Holy Cross Energy at its evening meeting on Tuesday, March 19. The action item discussion is listed as 5.1 on the meeting agenda which begins at 6 p.m.

The current franchise agreement was executed in 1999 and expires on April 30, 2019. It has included a three percent franchise fee on all electric bills, plus a four percent sales tax on electric consumption, as well as creation of a voluntary Community Enhancement Fund with monies provided based on one percent of gross charges. This Community Enhancement Fund has been used to exclusively help support a portion of the cost of undergrounding of electric utility lines in Vail. In 2018, the Community Enhancement Fund generated approximately $209,000 or enough to underground 730 lineal feet based on current construction costs. Another 38,000 lineal feet remains to be undergrounded throughout the community in new commitments.

To help support the town’s public safety request to accelerate the undergrounding projects, staff is recommending an increase to the current franchise fee from three percent to four percent in a new agreement. The increase would generate approximately $208,000 in 2018 dollars or approximately $4.2 million over the life of the proposed 20-year franchise agreement.

According to public safety officials, overhead power lines have been a source for wildfires in recent years with six such fires documented in the Vail Fire response area since 2017.These fires have occurred in multiple ways, including downed lines, equipment failures and trees contacting power lines.

Since 1999, the town has helped cost-share undergrounding projects with property owners and other partners supplemented by $3.2 million in Community Enhancement Funds supplied by Holy Cross Energy. Most recently, the town has budgeted $2.1 million to support undergrounding projects which have been taking place along Bighorn Road in East Vail and South Frontage Road in Intermountain, representing 7,500 lineal feet. 

According to a staff memo on the fee increase request, it would take approximately 52 years to underground the remaining power lines in Vail based solely upon use of the Community Enhancement Funds. The proposed one percent increase in the franchise fee would revert back to three percent once the undergrounding is complete.
To view the staff memo, visit vailgov.com or to comment on the proposed franchise fee increase, email the Vail Town Council at towncouncil@vailgov.com.

 

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