Bringing Cities and Their Utilities into the 21st Century

This guide by RMI provides strategic advice for municipalities to renegotiate franchise agreements with electric and gas utilities to advance climate, equity, and resilience goals. It emphasizes moving beyond narrow legal scopes to incorporate specific climate actions, equitable funding, and infrastructure resilience, while highlighting the importance of overcoming informational asymmetries during negotiations.

• Cities can use franchise agreements to integrate climate strategies by creating parallel agreements or requiring specific utility actions. For example, Minneapolis established a parallel agreement with Xcel Energy and CenterPoint Energy to support its Climate Action Plan and Energy Vision for 2040, including quarterly meetings with a community advisory board to work toward an 80 percent reduction in greenhouse gas emissions by 2050. Salt Lake City implemented a similar agreement with Rocky Mountain Power.
• Franchise agreements can be used to secure financial commitments for climate equity from shareholder funds rather than ratepayer funds. San Diego's agreement with San Diego Gas & Electric included $20 million for a climate equity fund and $10 million for programs increasing solar access and rebates for historically underserved communities.
• Municipalities can mandate infrastructure resilience, such as the 'undergrounding' of powerlines to reduce risks from extreme weather and wildfires. In Colorado, this practice began in the early 2000s, with Denver becoming the largest city to include this requirement in 2006; subsequently, every municipality in the state served by an investor-owned utility adopted the same requirement.
• Cities often face an informational asymmetry during negotiations because utilities negotiate many agreements annually while cities do so every few decades. To gain leverage, cities should research prior processes, engage peer cities, and quantify the value of the franchise to the utility. For its 2020–2021 renegotiation, San Diego estimated a new 20-year contract would be worth approximately $6.4 billion and set a minimum bid of $70 million.
• While municipalization (creating a public utility) is often considered during negotiations, it is rarely an effective threat on its own due to high infrastructure costs and legal complexities. The document cites the City of Boulder, which declined to proceed with municipalization after a decade of debate.

APA

RMI (2022). Bringing Cities and Their Utilities into the 21st Century. https://rmi.org/resources/bringing-cities-and-their-utilities-into-the-21st-century/

Chicago

RMI. Bringing Cities and Their Utilities into the 21st Century. 2022. https://rmi.org/resources/bringing-cities-and-their-utilities-into-the-21st-century/.

Wikipedia

{{cite report |author=RMI |title=Bringing Cities and Their Utilities into the 21st Century |date=16 March 2022 |url=https://rmi.org/resources/bringing-cities-and-their-utilities-into-the-21st-century/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2022bringing, author = {{RMI}}, title = {{Bringing Cities and Their Utilities into the 21st Century}}, institution = {RMI}, year = {2022}, month = mar, url = {https://rmi.org/resources/bringing-cities-and-their-utilities-into-the-21st-century/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }