The Hailey City Council introduced and passed the first reading of a franchise ordinance Monday evening laying the foundation for a new 10-year contract between the city and Idaho Power.
Hailey’s current 10-year franchise agreement with the utility expires April 30. The contract grants Idaho Power the right to serve customers within city limits and maintain and install electrical infrastructure in the city’s rights of way, or public space.
The new agreement would take effect on May 1. According to a staff report, the document gives Idaho Power “the nonexclusive right to physically locate and maintain telephone, cable, fiber optics, radio frequency, 5G or other communications facilities.”
It also recognizes the city’s objective “to have all new electrical facilities underground,” referencing Idaho Power’s proposed redundant transmission line along state Highway 75.
On Jan. 11, the City Council approved a joint clean-energy agreement with Idaho Power that states that the company will assist the city with its pledge to transition to 100% clean electricity by 2035. At the time, however, council members pushed back against an assertion by Idaho Power attorneys that the city supported the company’s proposed second transmission line into the Wood River Valley, and voted to remove that language from the agreement.
The statement of support will remain in this particular agreement, according to City Administrator Heather Dawson.
“We specifically mention the city’s goal of undergrounding electrical facilities in [the contract] … recognizing that the nuts and bolts can be worked on over the course of [10 years],” said Pat Harrington, in-house counsel at Idaho Power, on Monday.
If adopted after three readings, the new franchise agreement with Idaho Power would renew Hailey’s current 3% franchise fee, which voters approved in 2019. (Due to the successful ballot measure, Idaho Power now pays 3% of its gross revenue from Hailey customers to the city of Hailey for rights-of-way access.)
“The 3% [fee] has been a nice revenue generator for the city and for infrastructure work,” City Attorney Chris Simms commented on Monday.
The franchise agreement also states that Idaho Power will assist Hailey with dark-sky compliance—swapping high-pressure sodium bulbs for LEDs, for example—and will provide city staff an annual report with statistics on energy use.
“The [statistics] will help us benchmark our progress toward our energy goals,” Hailey Resilience Coordinator Rebecca Bundy said.
Harrington noted that Idaho Power can’t disclose information on energy use from its “larger industrial and commercial” clients.
“We always have to be careful about the details that we provide,” he said. “Having said that, we think we’ve reached a good compromise with [the city].”
The franchise agreement presented this week marks the end of nearly a year of negotiation with the utility, Dawson said.
“We are really in the 11th hour of our work with Idaho Power here,” she said.