By Robert Medley
Managing Editor
Voters in Okarche will get to decide if they want an Oklahoma Natural Gas franchise in town. If approved, gas bills will be a bit higher.
The town has not had a franchise agreement with the public utility company. The town has had one with Oklahoma Gas & Electric Co.
If the franchise agreement is approved by voters Oklahoma Natural Gas would have a franchise for 25 years and would maintain the gas lines through the town. The town would get a tax from natural gas sales that would increase from the current 2% rate to 4% with a franchise agreement.
The question as to whether ONG would increase rates for utility customers has been asked at town hall, said clerk Dana Reese. Will it result in an increase to the customers.on their monthly bills? This has also been a question, Reese said. Any rate increase would be up to ONG subject to approval by the Corporation Commission.
A response to the question was provided by Oklahoma Natural Gas spokesman Chad Previch. Customers will see an increase on their bills if approved.
Previch writes, “Currently, these funds in Okarche are collected as a “Gross Receipts Tax,” and a yes vote will change the line item on a customer’s bill to ‘franchise fee.’ So, only that line would increase if approved. Oklahoma Natural Gas does not keep any portion of the franchise fee and 100% goes back to the town to help Okarche with improvements for residents.”
Over the last 12 months, Okarche collected about $13,000 to help fund municipal projects, Previch reports.
“The Okarche Board of Trustees approved the resolution for a vote with the 4% rate, which some municipalities across Oklahoma have chosen as well. As an example, if your bill is $50, the increase would be about $1 and that $1 would go back to the town to fund town projects,” Previch reports.
“The franchise outlines how Oklahoma Natural Gas and the Town of Okarche will work together to continue our long standing partnership. Residents will continue to benefit from reliable natural gas service as they have for over 60 years. Because most of our infrastructure is underground, we have a 99% reliability rate, keeping customers warm in the coldest of temperatures,” according to Previch.
“A franchise agreement details the rights and responsibilities between the town and Oklahoma Natural Gas. The franchise allows Oklahoma Natural Gas to work within the town’s public ways to place, maintain and operate a natural gas system. This allows Oklahoma Natural Gas to work with the town on growth and economic development projects to help it thrive well into the future,” Previch wrote.
Town trustees unanimously approved the election. Town officials voiced support for the franchise agreement at the Monday, Jan. 29, 2024 regular monthly meeting.
“It is more typical for us, for the town to have an agreement,” Mayor Jeff Sadler said.
Okarche town attorney Bryce Kennedy backed that up saying a franchise agreement is “good government.”
The Okarche town trustees unanimously called for an election Tuesday, April 2 for the franchise agreement consideration.
If approved, a non-exclusive, 25-year contract would allow ONG to enter public right-of-ways to install, operate and maintain a distribution system to sell gas to customers in town. The agreement requires the public utility to pay the 4% franchise fee.
In a note about the background of the issue in the town trustee meeting agenda, the idea to ask voters to pass a franchise agreement has been going on for about seven years. The merits of a franchise and its differences from the current gross receipt tax, has been prepared by the town attorney, Bryce Kennedy.
Read the Okarche Warrior for local news coverage.
