The Town of Patagonia will hold an election on Tuesday, November 5, to approve or reject the granting of a franchise to Sulpher Springs Valley Electric Cooperative (SSVEC), to maintain and operate an electric energy transmission and distribution system within the corporate limits of the town of Patagonia.
SSVEC is currently providing Patagonia’s electric power, through a contract which is due to expire. The new contract, if approved by the voters, would provide for continued service through SSVEC, with some amendment to the old contract.
Following are some questions and answers about this proposed contract:
WHAT IS THIS FRANCHISE AGREEMENT?
It is a legally binding agreement between Sulphur Springs Valley Electric Company and The Town of Patagonia describing the terms under which SSVEC can provide electricity in this town.
WHAT ARE WE VOTING FOR?
A yes vote would allow SSVEC to continue to have its poles and electric lines traverse the town’s rights of way and supply electricity to the community. It would also define the rules for how SSVEC would interact with the town.
WHY ARE WE VOTING ON THIS?
State law requires the voters to approve plans for electric service.
HAVE WE HAD A FRANCHISE AGREEMENT BEFORE?
Yes, the Town and SSVEC have been operating under the current franchise agreement for 25 years. The current agreement expires this fall so we need a new one.
HOW IS THIS FRANCHISE AGREEMENT DIFFERENT FROM THE CURRENT AGREEMENT?
Much of the language is similar. The new agreement adds a few guarantees that weren’t in the old version, such as language that ensures we will always have a place to pay our bills in town. If times get tight a utility might close an office in a small community.
The new 25-year franchise agreement allows greater flexibility for the town to respond to rapidly changing market conditions in alternative energy, by giving the town the ability to renegotiate every five years.
The old franchise agreement had a 2% franchise fee, the same as the new proposal, but the fee was offset by the Transaction Privilege Tax (TPT) so SSVEC paid the Town 3% TPT instead of the franchise fee. The new proposal eliminates the offset provision, so SSVEC will pay the Town the franchise fee of 2% and 3% TPT. The fee and the TPT are based on the electricity sold in Patagonia.
WILL MY RATES GO UP?
Your electric utility rates are approved by the Arizona Corporation Commission and SSVEC must apply to that organization for any rate increases. SSVEC has just applied for a rate increase. That pending increase has nothing to do with the new franchise agreement with the Town of Patagonia.
CAN I PROPOSE CHANGES BY COMING TO A COUNCIL MEETING AND SPEAKING?
No, the language in this document has been approved by the SSVEC Board of Directors and the Patagonia Town Council (after review by Town legal counsel) and has been submitted to the official ballot preparers.
WHY DIDN’T I HEAR ABOUT THIS BEFORE?
The Patagonia Town Council has been discussing the franchise agreement for many months as negotiations with SSVEC were happening. It was last discussed by the council September 4, 2013, with public comment allowed, and it was approved at the September 11, 2013 regular council meeting.
WHAT HAPPENS IF IT IS VOTED DOWN?
SSVEC is legally required to continue to supply electricity; however, operating without a legal agreement could expose the Town to expensive litigation with respect to any disputes on items that are covered by the agreement.
CAN WE GET OUR ELECTRICITY FROM SOMEONE ELSE?
No, the Town would need another contract with a different electricity supplier. Unisource is close but it would cost too much to connect to their system.
HOW CAN I LOWER MY ELECTRIC BILL?
There are many ways to reduce your energy consumption to lower your electric bill. Talk to SSVEC about an energy audit. They will come to your house for free and make suggestions on how to use less electricity. You can also install solar panels or other renewable energy sources on your property and create your own energy.
If you have additional questions, contact Meg Gilbert at 604-0063 or Carolyn Shafer at 394-0252.