Franchise Agreement

Q) What is a franchise agreement?
A) A franchise agreement is not required in order for LCEC to meet the obligation to serve customers of Cape Coral. The Florida Public Service Commission determines what utility serves customers in geographic areas. The franchise agreement allows utilities to utilize rights-of-ways for location of infrastructure.

Q) Why does LCEC believe a franchise agreement with the City of Cape Coral is the best option?
A) LCEC has managed the electric system for more than 75 years. The system is strong and reliable, and rates are among the lowest in Florida. As a not-for-profit electric cooperative, LCEC has no profit motive and is committed to providing the most reliable service possible at the lowest achievable rate. We believe continued service is in the best interest of all customers.

Q) What franchise agreement negotiations have taken place?
A) -LCEC provided a framework franchise agreement to the City in March 2015, asking the City to use this framework to suggest specific agreement terms for negotiation. A response to the framework agreement was provided by the City in March 2016.
– Several meetings between a professional negotiator hired by the City and LCEC’s CEO took place late 2016 when the city reinstated a complaint with the Florida Public Service Commission.
– After the city withdrew a complaint filed with the Florida Public Service Commission, renewed talks began in 2017 facilitated by the Council for Progress. The City and LCEC unfortunately, reached an impasse in negotiation in September 2017.

Q) Has LCEC made any concessions toward reaching an agreement?
A) LCEC has been committed to the negotiation process since 2015. Several of the City’s desired terms, while not typically part of a franchise agreement, have already been implemented. LCEC also agreed to a purchase option in exchange for a 30-year agreement, several transparency and relationship-building provisions, and the option for City Council to make reasonable increases to the franchise fee if they desired. LCEC could not agree to some of the City’s proposed terms related to changing the cooperative business model or efforts to take control or make decisions about LCEC business operations. We remain diligent in our effort to represent our members’ best interests.

Q) Does LCEC have other franchise agreements in place at this time?
A) Yes. LCEC has franchise agreements with Everglades City, City of Sanibel, City of Marco Island, and Lee County.

Q) Why did LCEC declare an impasse in negotiation?
A) Despite years of effort and numerous concessions to meet City positions, negotiations reached a stalemate over City demands that would force LCEC to abandon its cooperative business model, and relinquish governance responsibilities.

Q) What happens now that there is an impasse?
A) Either the City approves the agreement LCEC provided (with essentially similar terms) by the December 20 deadline, or LCEC continues indefinitely to provide electric service within the boundaries of Cape Coral and voluntarily collects a fee (3%) for use of rights-of-ways. Any future negotiations would begin at ground zero.

Q) What happens to my electric service without a franchise agreement?
A) Nothing, LCEC proudly continues to provide you the most reliable electric service at the lowest cost possible as it has to its members for the past 75 years.

Cape Coral Franchise Agreement

Take a look at the previous Cape Coral Franchise Agreement that was in effect since October 1986 and expired in October 2016, as well as the franchise agreement proposal provided to the City in September 2017.

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