Edina switches utility fees from flat rate to percentage-based model
The Edina City Council approved a new utility franchise fee structure that will change how residential customers pay for gas and electricity starting January 1st. The shift aims to make fees more equitable while generating $1 million annually for street repairs and community improvements.
Edina residents will soon see a significant change in how they're charged for utilities. Instead of paying a flat $355 per month fee, customers will pay 4% of their monthly utility bill starting next year. The City Council previously directed staff to implement this change as a way to fund street reconstruction and other community projects.
The new percentage-based fee structure is designed to be fairer to residents. Under the old flat-rate system, customers paid the same amount regardless of how much energy they used. The new approach means customers who use less energy will pay less in franchise fees, while those who use more will pay proportionally more. "The shift to a percentage-based fee means customers will pay in proportion to how much energy they use, which is a more equitable approach," according to meeting materials.
Council members were particularly drawn to another benefit of the change: it gives residents control over their fees. "That gives the residents those opportunities to reduce the fees. And that's what council really liked about this change from a flat rate to a percentage-based fee," a council member noted during the meeting. Residents can lower their franchise fees by conserving energy through efficiency improvements or behavioral changes.
The additional $1 million in annual revenue will support several community priorities beyond street reconstruction, including sustainability initiatives, pedestrian and cyclist safety improvements, and street lighting upgrades. The City Council chose this franchise fee approach over raising taxes to fund these improvements. The new fee structure takes effect January 1st, 2026.
Our proprietary artificial intelligence agent analyzed publicly available documents including meeting agendas, minutes, and transcripts to write this story to help inform local residents. Feedback helps us improve, so please consider rating how we did with the thumbs up or down below.
Go deeper on this topic
Research related meeting documents and build a brief — without rewriting the story.
Full analysis
Implementation of New Utility Franchise Fee Structure
The city of Edina is changing its utility franchise fee structure for residential customers from a flat rate of $355 per month to 4% of the monthly utility bill, effective January 1st. This shift is motivated by a desire for greater equity, allowing customers to influence their fees through energy conservation, and to secure additional funding for community projects like sustainability, safer streets, and road reconstruction. The City Council previously directed this change as a preferred funding mechanism over taxes for street reconstruction.
The shift to a percentage-based fee means customers will pay in proportion to how much energy they use, which is a more equitable approach.
That gives the residents those opportunities to reduce the fees. And that's what council really liked about this change from a flat rate to a percentage-based fee.
Source document
[0:00] [Music]
[0:05] To make utility costs more equitable and
[0:08] to generate more revenue for public
[0:10] improvements, the city of Edina is
[0:13] changing its utility franchise fee
[0:15] structure. Right now, all residential
[0:18] customers pay a flat fee of $355
[0:22] per month for both gas and electricity.
[0:25] But starting on January 1st, that fee
[0:28] will change to 4% of your monthly
[0:31] utility bill. The shift to a
[0:33] percentage-based fee means customers
[0:35] will pay in proportion to how much
[0:38] energy they use, which is a more
[0:40] equitable approach.
[0:41] Yeah, with the new 4% fee, residents
[0:43] really have the ability to impact those
[0:45] fees by doing some small changes in
[0:47] their homes. They can do LED lighting or
[0:50] take advantage of more efficient systems
[0:52] and HVAC systems when they have major
[0:54] equipment replacements at their home.
[0:56] That gives the residents those
[0:57] opportunities to reduce the fees. And
[0:59] that's what council really liked about
[1:01] this change from a flat rate to a
[1:03] percentage-based fee. Revenue from these
[1:05] fees will help fund important community
[1:08] projects, including sustainability
[1:10] initiatives, safer streets for
[1:12] pedestrians and cyclists, street
[1:15] lighting, and road reconstruction.
[1:18] Earlier this year, the city council
[1:20] directed staff to raise franchise fees
[1:23] rather than taxes to fund an additional
[1:26] $1 million per year for street
[1:28] reconstruction. destruction.
Was this story helpful?
Also from this meeting
Want to know when new stories arrive?
Enter your email to receive updates.
We will not use your email for any other purpose. You can unsubscribe at any time.