Stubbornly high electric bills have been a hallmark of the past two record-setting summers in Oklahoma City. But at least a little bit of the money is filtering back to local public services.
The record heat and resulting expensive electric bills have shown up in increased franchise fee payments from the Oklahoma Gas and Electric Co. to Oklahoma City, city budget figures show.
OG&E made nearly $2 million more in franchise fee payments to the city than had been projected in the fiscal year that ended June 30, city budget documents show.
“Last August, our franchise fees jumped 32 percent from OG&E from the year before. That's a sizable change,” city Budget Director Doug Dowler said. “That means, basically, residents in Oklahoma City were spending 32 percent more on electricity than they were (that month the previous year).”
Back into general fund
Franchise fee payments are what utility companies pay to use public rights of way when building and maintaining infrastructure. Each utility company has its own agreement with a city, which often includes other stipulations like a cable company providing a public access channel.
OG&E's franchise fees paid to Oklahoma City are based on what customers in the city pay on their bills.
The city expected to get about $19.6 million from OG&E in fiscal year 2012, but ended up with nearly $21.6 million.
Franchise fees go to the city's general fund, which is the bulk of the city budget and pays for most city services. So even though Oklahoma City residents feel the burn of a hot summer in their wallets, at least a few dollars will come back in the form of public services.
More this year?
As Oklahoma City residents likely have noticed, the metro area felt like an oven for most of this summer as well. So another hefty spike in OG&E franchise fees could be on the way again.
But it could be offset by something else. The mild winter, for example, resulted in about $1 million less for Oklahoma City in franchise fees from Oklahoma Natural Gas.
So the city tries not to forecast the weather when coming up with budget projections for franchise fees.
“Nobody can project the weather a year out,” Dowler said. “The things we're looking at are fuel prices: coal and natural gas. And right now, natural gas prices are down pretty significantly.”