Bringing Cities and Their Utilities into the 21st Century

The guide outlines five strategies for cities to leverage utility franchise agreement renegotiations: incorporating climate strategies, planning for equity, investing in resilient infrastructure, embracing collaboration, and understanding negotiation leverage. It highlights specific examples, such as San Diego's climate equity fund and Colorado's powerline undergrounding, to demonstrate how cities can align utility operations with community-wide clean energy goals.

• Cities can incorporate climate strategies into franchise agreements by creating parallel agreements on climate goals or making specific actions a contract requirement. For example, Minneapolis established a parallel agreement with Xcel Energy and CenterPoint Energy to support its Climate Action Plan and Energy Vision for 2040, aiming for an 80 percent reduction in greenhouse gas emissions by 2050.
• Franchise agreements can be used to secure financial commitments for climate equity. San Diego's agreement with San Diego Gas & Electric included $20 million for a climate equity fund and $10 million for solar access and rebates for underserved communities, funded by shareholders rather than ratepayers.
• Municipalities can mandate infrastructure resilience, such as the 'undergrounding' of overhead powerlines to reduce risks from extreme weather and wildfires. This practice began in Colorado in the early 2000s and was adopted by Denver in 2006, subsequently being included by every municipality served by an investor-owned utility in that state.
• Cities often face informational asymmetry during negotiations because utilities negotiate more frequently than municipalities. To counter this, 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, the document argues it is rarely an effective threat due to high infrastructure costs and legal complexities, citing the City of Boulder's decision to decline the process after ten years 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} }