City of Rochester seeks community input on proposed natural gas franchise fee – ABC 6 News

(ABC 6 News) – The Rochester City Council is considering a new fee that if approved would be added on to everyone’s natural gas bill, but first, the city is looking for public input to decide if and how it should be implemented.

It’s called a natural gas franchise fee.

It’s a charge to the utility provider, in this case Minnesota Energy Resources, to use public right-of-ways like roads, sidewalks and other paths to run natural gas lines throughout the city.

Those costs are then passed off to the provider’s customers.

The fee itself can take different forms.

According to Rochester’s sustainability coordinator, Kayla Betzold, the city is currently considering three models.

“A flat monthly fee, a per therm fee, which charges based on the amount of natural gas that a customer is using, and then a tiered flat fee,” she says.

That means, for the majority of residents, if the fee is approved it will either be the same cost every month or it would fluctuate.

This early in the process, there’s no indication how much the fee would be.

In cities across the state that have adopted similar fees, the cost ranges from just $0.60 to $8.00, averaging around $3.50 on residential gas bills.

Fees for commercial buildings would be more dependent on which method is ultimately adopted: either flat each month, dependent on monthly usage or dependent on annual usage.

Regardless of the method, Betzold says the fee would be used to help the city meet its sustainability goals through various projects which would otherwise be funded by property taxes.

“The city council has elevated responsible environmental stewardship to one of the city council’s strategic priorities,” Betzold says. “The question is how to fund all of kind of that work and the work towards these goals. And so this could be an option to fund that work.”

The fee is designed to reduce the city’s reliance on property taxes for those purposes.

If approved, it would be distributed across everyone who pays a natural gas bill, including renters, showing up as line item on their bill.

Even if the fee becomes reality though, there’s no plans right now to change property taxes as a result.

Community response so far has been split.

“I’ve been getting calls on both sides of it,” says Rochester Ward 2 City Council member, Patrick Keane. “I’ll be getting calls of people, says boy, since I moved into my house in 2022, my taxes have been up. The fees are up. When does it end? And I understand that perspective. But there’s also people are saying this is a good way for us to be a better, contributor to a more sustainable world going forward. And it’s a good way to fund our roads without putting everything on the levy or on assessments on property owners.”

The city council last discussed this proposal in a study session back in November, when city staff presented their plan to get community feedback.

Council members were also split, some perceiving value in the proposal that could help the city and its residents long term.

Ward 2 council member Nick Miller said it could be an incentive for homeowners to be make their homes more energy efficient.

“In my own case, I live in a house that was built in the 1930s. I have a small part on the northern side of my house where the snow melts first. I know there’s heat leaking through there,” Miller said.

Others, however, were more critical, viewing the fee as a tax impacting people unfairly.

“This is essentially a regressive tax,” said Ward 4 council member Andy Friederichs. “It hits the people that make the least amount of money the hardest, and we’re taken from them and we’re distributing it the way that we see fit.”

Part of the goal in the upcoming engagement sessions, says Betzold, is to see how, if at all, the community thinks this project should move forward.

“Ultimately right now we’re just really looking for feedback from the community to guide this process,” she says. “So we’re interested to hear any feedback that the community has for sure.”

The first opportunity for community members to ask questions or voice their opinions is Friday, January 30 during a virtual session from noon to 1:00 P.M.

Registration is required and can be done here.

Further opportunities for both in-person and business focused meetings, as well as more information on what the fees could look like, can be found on the project website.