Lawrence City Commission votes to increase fees charged to Black Hills Energy; more discussion to come

photo by: Screenshot/City of Lawrence

The Lawrence City Commission meets virtually via video conferencing software for its meeting Tuesday, Nov. 17, 2020.

Lawrence leaders have voted to increase some of the fees the city charges a natural gas provider to use city property, and more discussions about both fees and environmental sustainability goals will occur in the next year.

As part of its meeting Tuesday, the Lawrence City Commission voted unanimously to adopt fee changes in the city’s franchise agreement with Black Hills Energy. The changes bring the city’s agreement with Black Hills more in line with other utility and service providers that use the city’s public right of way for their infrastructure and operations.

Unlike most other companies, Black Hills does not currently pay permit fees to use the city’s right of way. The new contract approved Tuesday will charge permit fees, generating up to $25,000 annually in revenue for the city, according to a city staff memo to the commission.

Black Hills does currently pay another kind of fee, called a franchise fee, to the city as part of the agreement, and city staff is also recommending that the franchise fee increase in the future. The franchise fee is based on the utility’s monthly gross receipts from Lawrence customers. It’s currently set at 3% of Black Hills’ monthly gross receipts, and city staff is recommending that it be raised to 5%.

However, city staff doesn’t want such an increase to take place this year, because it could potentially cause customers’ bills to rise during the COVID-19 pandemic. The commission agreed with the city staff recommendation that instead of the usual five-year contract, the city should adopt a one-year contract with the intent of revisiting negotiations in a year.

Commissioner Lisa Larsen said she would also like to discuss environmental sustainability issues at that time. Larsen noted that in March, the commission adopted an ordinance establishing the goal of using 100% renewable energy citywide by 2035.

Regarding sustainability, Black Hills spokesperson James Williams told the commission that the company has pledged to reduce its “carbon intensity” by 50% by 2035 by tightening up its system to decrease gas leaks during transportation and distribution. In response to questions from Larsen, Williams said that natural gas is composed of about 99% methane and that Black Hills does not currently get its methane from renewable sources. Methane is a greenhouse gas that is more harmful to the environment than carbon dioxide, according to the Environmental Protection Agency.

Larsen asked Williams whether there was any way for Black Hills to strengthen its goal. Williams told Larsen the company planned to have a broader conversation about sustainability goals in 2021 and would like to be a part of the city’s discussions.

In other business, the commission deferred action on a resolution that establishes procedures for investigating alleged violations of the city’s ethics and professional conduct policy. Commissioners asked for some changes to the draft resolution proposed by staff regarding the handling of complaints against advisory board members, who are volunteers and not city staff.

City Commission 11/17/20


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