Clay Electric franchise agreement approved

HIGH SPRINGS – An ordinance granting Clay Electric Cooperative an electrical franchise in the city of High Springs was unanimously approved on second reading following a brief public hearing Thursday, May 9, 2013.

Deputy City Attorney Sondra Randon said later that the franchise fee was last set at 6 percent, but through negotiation, would now be reduced to 5.5 percent.

City Manager Ed Booth negotiated the agreement with Clay Electric’s general manager. He explained that the fee is a “pass-through fee,” meaning the homeowner pays the franchise fee to Clay and they pass it along to the City. “The percentage is assessed against the homeowners’ total usage,” explained Booth.

Clay Electric has agreed to pay the City more than $25,000, which has been in arrears from March 25, 2012 to January 15, 2013, plus the franchise fees collected at the 5.5 percent rate from January 15, 2013 to the date of execution of the Acceptance of Franchise Agreement. Clay Electric has 15 days from the date of acceptance of the ordinance by the City to execute the Acceptance of Franchise Agreement, otherwise the agreement is null and void.

The agreement will be retroactive to Jan. 15, 2013, and will extend for a period of 10 years. It will also include an option to renew the Franchise Agreement for up to four additional 5-year terms, if nether party provides written notice to the other of their intention to conclude the agreement or renegotiate terms 90 days prior to the end of the contract period.

Clay Electric has held a franchise agreement with the City for more than 50 years. When the last agreement matured, the City was in the midst of management changes. When City Manager Ed Booth joined the City, he realized the contract had expired and contacted Clay Electric to negotiate a new agreement.

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