Staff outlines Xcel franchise agreements; city secures LIHEAP rebate for low‑income households

City staff presented a multi-part staff report on new franchise agreements with Xcel Energy covering electric and natural gas franchises. Liz Boyer, climate action coordinator in the Office of Financial Services, said the negotiations aimed to simplify an unusually complex prior agreement, maintain or increase city revenue, reduce the burden on residential customers and disincentivize natural gas use where possible.

Boyer told council that "In 2025, the City collected just under $26,500,000 from Exel gas and electric franchise fees," and that the new electric schedule would reduce an equivalent residential franchise rate from about 7% to 5.5% while raising commercial and industrial rates that had been disproportionately low. The agreements include a mechanism negotiated with Xcel to provide a bill rebate that functions as a 50% discount on the franchise fee for households participating in LIHEAP; staff said 9,821 households in Saint Paul currently participate in LIHEAP and will receive the rebate if they qualify during a 12‑month period. Staff also described a new memorandum of understanding to document partnerships on energy‑efficiency programs, pilots and consolidated invoicing for city accounts. The ordinances and franchise documents were laid over for second reading and public hearing.