Local group wants to see St. Paul reach a more climate-forward, flexible contract with Xcel

The city of St. Paul is in the midst of negotiating a new contract with one of its largest electricity suppliers, Xcel Energy. The final outcome of these discussions will be a new franchise agreement.

Franchise agreements are contracts between a city and a utility laying out how the company can use the city's existing infrastructure to provide its services.

St. Paul’s current agreement is a renewal of a contract originally negotiated 20 years ago.

Unidos MN has been working behind-the-scenes to push the city toward what it would see as a more climate-forward, flexible deal.

Madi Johnson, an organizer with Unidos MN, said they want an adjustable fee structure and a shorter agreement in order to better assess Xcel’s reliability, affordability and performance.

“It’s really been in the past decade that cities around the country have realized that this agreement is one of the most important ways we can decide to shift our climate goals,” Johnson said.

In a statement, the city of St. Paul said it had the following priorities for the new contract.

The Mayor and City Council are united in the goal for this Xcel franchise negotiation: to both simplify the and improve the existing rate structure. Our current system of franchise fees is the most complex in the state and providing transparency will set the City up well for the future, which is ever-changing as we combat the effects of our climate emergency.

For its part, Xcel Energy shared the following statement with MPR News.

We are pleased to collaborate with the City of St. Paul on renewing our franchise agreement for the next 10 years. Our conversations with the city have been productive, collaborative and focused on continuing to provide energy that is safe, reliable and resilient, while keeping our customers’ bills as low as possible. Our goal is to continue to keep both gas and electric franchise fees low for our St. Paul customers. Regarding timing on the final agreement, we are still early in the process and will know more about decision timing in the coming weeks.

As we continue our fast progress towards Minnesota’s statewide 2040 carbon-free electricity standard, with 69 percent of our electricity carbon-free in 2025, we are committed to also helping communities advance their energy sustainability goals. We appreciate the long-standing opportunity to collaborate directly with the city on its goals.

Johnson said the mayor’s office is taking lead on the negotiations but the City Council gets to vote on any potential agreement.

“This process pretty much happens behind closed doors,” said Johnson. “I think this process should be a lot more democratic because it is ultimately about what kind of relationship do we want to have with our utility, what expectations do we have of them, and how serious are they about getting us to clean energy.”

The existing agreement between St. Paul and Xcel Energy is set to expire in August.

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