Hand Me the Franchise Agreement: Municipalities Add Another Policy Tool to Their Clean Energy Toolbox

A growing list of the more than 20,000 municipalities in the United States are considering pathways to achieve renewable energy goals. One emerging trend is for municipalities to incorporate energy objectives into their franchise agreements with an electric service provider. Franchise agreements are contracts between municipalities and utilities that grant the utility authority to serve customers in the municipality. In some cases, municipalities have negotiated renewable energy objectives into these agreements. It is still unclear how many municipalities have exercised this authority and to what effect. From a national dataset of 3500 franchise agreements, we selected five cities that adopted renewable energy or energy efficiency objectives into or alongside their franchise agreements for deeper analysis: Chicago, Illinois; Denver, Colorado; Sarasota, Florida; Minneapolis, Minnesota; and Salt Lake City, Utah. We generated seven key takeaways for other cities considering this pathway to achieve their energy objectives. In summary, municipalities can leverage franchise negotiations to pursue both modest and ambitious clean energy goals (i.e. 100% renewable electricity). This analysis provides municipalities with critical insight on how they can use this potentially formidable tool to achieve their own energy objectives.