Talks on new franchise agreement underway between city, PSO

But, ultimately, that’s not their decision to make. The utility operates in the city under a franchise agreement that must be approved by voters, and the existing 25-year agreement is set to expire in July 2022.

Jack Blair, the city’s chief operating officer, said he expects the vote on the new agreement to occur in February. In the meantime, the Mayor’s Office and city councilors are in discussions with PSO to hammer out the details of what that agreement would include.

“We are in a pretty good position of having a good, reliable service provider,” Blair said. “So it’s just a matter of refining and improving where we can in terms of the way we coordinate and work together.”

A franchise agreement gives a utility the right to access public rights of way to provide a public service, in this case electric power. In return, the city charges a fee.

Under its existing agreement with the city, PSO pays an annual 2% fee based on its gross receipts in the Tulsa service area. The funds, which amount to about $9 million a year, go into the city’s general fund.

The franchise fee is one aspect of the agreement that could be different when it goes before voters in February.

“We are a little bit of an outlier,” Blair said. “Our 2 percent, it dates back to the 1933 franchise, and probably before, so I wouldn’t be surprised if we revisit that, but it hasn’t been determined (yet).”

If a franchise fee increase is pursued, Blair said, the city would also look to ensure that service improvements that constituents could see would follow.

“Our street and highway (light) program is important to people, and that is another enormously expensive proposition,” he said. “So stabilizing that and improving that for the long term I think is important.”

The city is also discussing ways to improve coordination and communication with PSO when it comes to doing work beneath city streets.

“As much of it is on our side as on theirs in terms of coordinating work in the right of way,” Blair said. “Making sure that when we have a street project, we’re coordinating well with them, and when they have emergency situations or infrastructure repair work that they have to do, that they’re coordinating and communicating well with us.

“It is not that anything is not working well now, it’s that there is always an opportunity to just refine and make that work better.”

Blair said there have been some discussions with PSO about how to make it less expensive to install underground lines, but he cautioned that no one should expect “that with the new franchise that every above-ground pole is going to be put underground.”

It comes down to cost, and who pays for it.

“That is just an enormously expensive proposition,” Blair said. “... What PSO charges in terms of rates and rate recovery gets spread out across their whole rate base so they have to justify that to the (Oklahoma) Corporation Commission.”

The Mayor’s Office and city councilors have also been discussing the process for selecting light poles and what they look like. The city is putting together a catalog of pole standards and costs it hopes will provide a better understanding of the city’s options.

“The issue has been kind of inconsistency, so we’ll put up one kind of pole in an area, and a block away have a different kind of pole,” Blair said.

PSO spokesman Stan Whiteford said the company appreciates the conversations it’s had so far with city leadership.

“Our franchise with the city of Tulsa is important not only to our company and our 1,100 employees in the Tulsa area, but to the future of the city,” Whiteford said. “We look forward to continuing our work with the city to develop a franchise agreement that will serve the citizens of Tulsa, just as our past franchise agreements have.”

City Councilor MyKey Arthrell said his main concern going into talks with PSO is energy sustainability.

“We can’t just have one source of energy for power, or what happened this winter is going to continue to happen,” Arthrell said.

The city councilor would like to see PSO diversify its energy sources and ensure that the energy sources it does rely on have winterized facilities.

“That is the only way I see them getting a 25-year contract,” Arthrell said. “If they are really wanting to do this for another 25 years, they need to think big in terms of investment.”

The Mayor’s Office is working with city councilors to arrange public meetings in the next few months to get residents’ input on the new agreement.

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