PG&E Pays City For Gas and Power Facility Use

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The Pacific Gas and Electric Company paid nearly $1 million in annual franchise fees and franchise fee surcharges to the city of Berkeley last week, the company announced Wednesday.

On April 6, the company paid the city $482,236 in fees for electric services and $487,159 for gas. In total, PG& paid almost $29.6 million to East Bay cities and counties and $151 million statewide, according to a company press release.

The company pays the franchise fees for use of city facilities-such as power lines and gas mains-to transport gas and electricity, said Robert Hicks, the city's finance director.

"(The company) is required to pay us half a percent of their gross receipt," Hicks said.

PG&E must also pay the city franchise fee surcharges for using city facilities to transport natural gas for independent gas companies, said Paul Moreno, a spokesperson for the company.

"We're literally acting like a collection agent," he said.

The money raised through these fees goes into Berkeley's general fund, according to city spokesperson Mary Kay Clunies-Ross.

The fees are part of an agreement between the company, the California Public Utilities Commission and the city, Moreno said.

According to the release, Oakland received about $2,783,000 and Emeryville received nearly $219,000 from PG&E this year.

The amounts paid in franchise fees and surcharges to Berkeley have been steadily rising, according to Hicks. The company paid the city $815,028 in 2006 and $909,207 in 2008.

Moreno attributed the fee increases to rising industry prices and increased use of natural gas and electricity by the city's government and residents.

Despite the growth in revenue from the company the city receives, Clunies-Ross said the annual payments do not significantly add to the city's $321 million budget and $146 million general fund.

"It's as important as all the annual revenue we receive but by no means is it extra," Clunies-Ross said. "It's not money that anyone wants to lose, but property taxes and sales taxes and lots of things are bigger sources of revenues."


Contact Arielle Turner at [email protected]

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