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UTILITY FRANCHISE FEES <br />Some cities impose franchise fees to their energy providers as part of utility <br />franchise agreements. As allowed by the Minnesota Public Utilities Commission, <br />franchise fees levied on us are passed on directly to our customers within a city. <br />This fee is itemized on our customer bills as a City Fee. <br />A franchise fee can only be implemented if it is allowed by the city's existing <br />franchise agreement with us. If a community determines a franchise fee is <br />appropriate, there are several guiding principles we follow in discussing fee options. <br />• Franchise fees are set forth in a fee ordinance authorized by, but separate from, the <br />franchise agreement. <br />• An equivalent fee must be placed on all energy suppliers serving the city. <br />• We will not be subject to permit fees while franchise fees are in effect. <br />• We will prepare fee schedule options for the amount of revenue sought by the city. <br />• The fee is calculated as a flat fee, per premise and is applied equally for all <br />customers in a given rate class. <br />• Fees are paid to the city on a quarterly basis. <br />Franchise Fee Considerations <br />As in any case where a city is considering a new revenue source, we urge careful <br />consideration of the possible negative impacts of a franchise fee since they increase <br />the cost of energy for all customers in that city. <br />Timeline <br />Implementing franchise fees is a complex process requiring adequate time for <br />system programming and testing. Here's a typical sequence of events: <br />• City provides us with written notice of intent to enact a fee prior to formal <br />consideration. <br />• City and Xcel Energy negotiate the fee. <br />• In order to meet the PUC's requirements, the approved fee ordinance must be <br />received by us at least 90 days before the anticipated start of fee collection. <br />• We collect the fee from our customers monthly and transfer it to the city on a <br />quarterly basis. <br />Sample Timeline <br />Xcel Energy receives <br />proposed ordinance <br />City adopts <br />ordinance <br />Xcel Energy implements <br />fee on customers' bills <br />Fee collection <br />(Xcel Energy pays the city quarterly) <br />INFORMATION SHEET <br />MINNESOTA <br />�& Xcel Energy°' <br />kk <br />Xcel Energy pays the city at <br />the end of the month after the <br />quarter's fees have been collected <br />xcelenergy.com I © 2022 Xcel Energy Inc. I Xcel Energy is a registered trademark of Xcel Energy Inc. 1 22-11-617 <br />