Are Utility Franchise Fees Making 10% of Your Revenue?

Utility Franchise Fees can represent up to 10% of a local government’s annual revenue, so it is essential to understand what is truly going on within these payments. A Utility Franchise Fee is essentially rent being paid by a utility to a city or county for the use of their rights-of-way. The typical utilities that pay franchise fees are electric, natural gas, telephone, video/cable, waste hauler, and water utilities.

Depending on the state, the fee can either be state regulated or set at the local level. In either case, the local jurisdictions have the ability to verify payments from their utility providers by conducting audits.

Understanding where opportunities exist to increase compliance can be a difficult task. Technological advancements have become widespread in delivering certain utilities, so there are more fees for equipment, connections, service upgrades, premiums, penalties, and services that fall under the franchise.

Avenu has 30 years of auditing experience and we have performed thousands of utility audits. We are fluent with industry changes and understand the potential areas for misallocation, omission, and/or accounting mistakes.

We also stay ahead of issues such as deregulation or streaming content in telecommunications. The judicial and legislative activity they create may affect a utility’s gross receipts and your future franchise fee revenue

If your Utility Franchise Fee revenue isn’t being maximized, then it may be time to reach out to succeed@avenuinsights.com, and let Avenu help you maximize your revenue stream.