PEC Franchise Agreement – Action Item (November 6, 2025)

[Paul Roberts]

Colleagues,

I reviewed the proposed 10-year franchise agreement with Pedernales Electric Cooperative (PEC) and used ChatGPT to assist in my analysis. Below are my key concerns coupled with related questions for Council discussion:

1. Relocation Cost Burden
Concern: The ordinance places the cost of relocating or undergrounding PEC facilities on the City when such work is tied to public projects or beautification efforts.
Question: Does this match the cost-sharing structure in our previous PEC franchise, or are we assuming greater fiscal responsibility now?

2. Franchise Fee Level
Concern: The 2% franchise fee may be below the rate collected by comparable cities.
Question: Can staff confirm whether 2% aligns with PEC’s agreements in nearby jurisdictions such as Jonestown or Marble Falls, and whether a higher rate could be justified?

3. Automatic Renewal Clause
Concern: Section 9 provides for automatic six-month renewals unless canceled, which may limit Council’s ability to revisit or renegotiate terms after the 10-year term.
Question: Should we request language requiring Council reauthorization at the end of the initial term rather than indefinite auto-renewal?

4. Vegetation Management Exemption
Concern: PEC is exempt from city tree-trimming permits or fees, which could conflict with tree preservation or parkland maintenance standards.
Question: Should PEC be required to notify City staff before large-scale trimming or vegetation removal within city-maintained areas?

5. City Coordination Obligations
Concern: The City is required to provide PEC with updated capital improvement plans and schedules.
Question: Do Public Works and Engineering currently have procedures to meet this requirement, or would new coordination processes be needed?

6. Indemnification Scope
Concern: PEC indemnifies the City only for willful or gross negligence, excluding ordinary negligence.
Question: Would PEC consider expanding indemnification to include ordinary negligence, which is a more typical municipal standard?

7. Waiver of Prior Claims
Concern: The City waives any claims arising from prior franchise agreements.
Question: Has staff verified that there are no outstanding billing discrepancies or disputes with PEC before this waiver is accepted?

Summary:
The proposed ordinance appears generally standard and functional, but a few sections warrant clarification before approval. These questions aim to ensure the City fully understands its financial and operational obligations under the new 10-year term.

 

[Norma Owen]

Thank you for the added context Councilman Roberts.

 

[Shane Saum]

Colleagues,

I reviewed the proposed 10-year franchise agreement with Pedernales Electric Cooperative (PEC) and used ChatGPT to assist in my analysis. Below are my key concerns coupled with related questions for Council discussion:

1. Relocation Cost Burden
Concern: The ordinance places the cost of relocating or undergrounding PEC facilities on the City when such work is tied to public projects or beautification efforts.
Question: Does this match the cost-sharing structure in our previous PEC franchise, or are we assuming greater fiscal responsibility now?

2. Franchise Fee Level
Concern: The 2% franchise fee may be below the rate collected by comparable cities.
Question: Can staff confirm whether 2% aligns with PEC’s agreements in nearby jurisdictions such as Jonestown or Marble Falls, and whether a higher rate could be justified?

3. Automatic Renewal Clause
Concern: Section 9 provides for automatic six-month renewals unless canceled, which may limit Council’s ability to revisit or renegotiate terms after the 10-year term.
Question: Should we request language requiring Council reauthorization at the end of the initial term rather than indefinite auto-renewal?

4. Vegetation Management Exemption
Concern: PEC is exempt from city tree-trimming permits or fees, which could conflict with tree preservation or parkland maintenance standards.
Question: Should PEC be required to notify City staff before large-scale trimming or vegetation removal within city-maintained areas?

5. City Coordination Obligations
Concern: The City is required to provide PEC with updated capital improvement plans and schedules.
Question: Do Public Works and Engineering currently have procedures to meet this requirement, or would new coordination processes be needed?

6. Indemnification Scope
Concern: PEC indemnifies the City only for willful or gross negligence, excluding ordinary negligence.
Question: Would PEC consider expanding indemnification to include ordinary negligence, which is a more typical municipal standard?

7. Waiver of Prior Claims
Concern: The City waives any claims arising from prior franchise agreements.
Question: Has staff verified that there are no outstanding billing discrepancies or disputes with PEC before this waiver is accepted?

Summary:
The proposed ordinance appears generally standard and functional, but a few sections warrant clarification before approval. These questions aim to ensure the City fully understands its financial and operational obligations under the new 10-year term.

Thank you, Councilman, for getting the PEC franchise agreement discussion moving forward. I appreciate the work that’s already gone into this and wanted to share some ideas for consideration as we refine our approach. I think we have a great opportunity to modernize this agreement in a way that benefits our citizens, supports reliability, and strengthens our partnership with PEC.

- I do not think there should be an auto-renew.
- If we go down to the 2%, we should push for some in-kind services that could help us reduce other city costs that we may have used that additional revenue for.
- We should require coordination on vegetation management so we can maximize it for better wildfire prevention and citizen transparency of work being done.

Here are my asks:

1. Infrastructure Modernization
   a. I support including a joint trenching or “dig once” policy to ensure PEC coordinates underground work with city projects and other utilities. This can save taxpayer dollars and minimize repeated road cuts.
   b. I’d also like to explore the idea of allowing city conduit or fiber to be installed in PEC trenches during new construction. Is there a need or benefit for Lago Vista to do this as part of our long-term infrastructure planning?
2. Grid Resilience and Emergency Coordination
   a. I strongly believe our water plants and critical facilities should be on PEC’s priority restoration list after storm events. This should be formalized in the agreement as part of our resilience planning.
   b. I also recommend that PEC designate a liaison to our Emergency Operations Center during major weather events or declared disasters. Having that direct communication line will help with coordination and public safety.
3. Data and Transparency
   a. I’d like to see a reliability reporting requirement that includes feeder-level outage data shared with the City on a quarterly basis.
   b. PEC should provide GIS data and coordination on right-of-way locations, planned upgrades, and easements to improve planning for city projects.
   c. We could also include a public performance dashboard so citizens can easily track streetlight repairs, outage trends, and vegetation trimming schedules.
4. Sustainability and Community Development
   a. I recommend adding a clause allowing a portion of the franchise fee or PEC contribution to fund energy efficiency programs for residents and city facilities. This could also help offset costs related to maintaining dark-sky compliance, which is important to our community.
   b. PEC could partner with the City to install a few public EV charging stations at city facilities or parks. Usage data from those chargers could help us plan for future growth.
   c. I also support including a workforce and education partnership with LVISD or local schools to promote lineworker training, safety education, and STEM-related opportunities.
5. Aesthetics, Environmental, and Safety
   a. I’d like to see a vegetation partnership formalized in the agreement. That could include wildfire mitigation coordination, a shared trimming schedule, and better public notice for upcoming work.
   b. As part of this, PEC could complete streetlight upgrades to full LED and dark-sky compliant fixtures with an online tracker for repairs.
6. Financial and Administrative Innovation
   a. I recommend adding a shared grant pursuit clause so PEC and the City can partner on state or federal grant opportunities, including with other nearby cities or Travis County, especially those focused on grid reliability, wildfire mitigation, or renewable energy.
7. Governance and Accountability
   a. We should include an annual joint work plan with PEC that outlines shared priorities for the year and progress updates.
   b. I also support adding a formal mid-term review, ideally at the five-year mark, to evaluate performance, community benefit, and opportunities for new collaboration.
8. Citizen Engagement
   a. I’d like to propose annual public safety coordination days where PEC and the City host community education events on topics like power-line safety, wildfire prevention, and storm readiness.

 

[Paul Roberts]

Thank you, Shane, for laying out a thoughtful and forward‑looking set of priorities. I support the direction you’ve outlined and appreciate the focus on reliability, wildfire mitigation, improved transparency, and long‑term infrastructure planning. Since my term concludes this week, I simply want to contribute context and contract‑ready considerations based on our current franchise, how similar agreements are structured in other cities, and the items previously raised during Council discussion. The new Council may use, modify, or disregard the following as it sees fit.

Core Position Points from Prior Council Discussion

1. No automatic renewal. At the end of the 10‑year term, the agreement should expire unless affirmatively renewed by Council after public review.
2. Maintain the 4% franchise fee. Our current agreement is 4%. We should retain 4%. If PEC pushes to reduce the fee to 2%, then any consideration of that reduction should be paired with meaningful in‑kind value and programmatic commitments that directly reduce City costs or improve resilience.

Negotiation Objectives (Clause Concepts + Questions)

Infrastructure Modernization

• Joint Trenching / “Dig Once.” Require coordination of underground work with the City and other utilities to reduce repeated road cuts and integrate with City capital project schedules.
• City Conduit / Fiber Placement. Allow City‑owned spare conduit or fiber to be placed in PEC trenches during construction, subject to safety and standards.

Questions: – Will PEC agree to a joint trenching clause tied to the City’s CIP and subdivision approvals? – Under what standards can City conduit/fiber be placed in PEC trenches and what cost‑sharing is appropriate?


Grid Resilience & Emergency Coordination

• Priority Restoration. Designate City critical facilities (water plants, wells, lift stations, EOC, PD/FD) on PEC’s priority restoration list with an annually updated exhibit.
• EOC Liaison. PEC designates a liaison to the City’s Emergency Operations Center during major events.

Questions: – Can PEC formalize an annually updated critical‑facilities exhibit and communication protocol? – Will PEC staff a named EOC liaison during storm events and participate in post‑incident reviews?


Data, Planning & Transparency

• Reliability Reporting. Quarterly feeder‑level outage and reliability metrics with cause codes.
• GIS Coordination. Provide ROW/easement GIS layers and planned upgrade schedules under an MOU.
• Public Dashboard. Online visibility into outage trends, streetlight repair status, and upcoming vegetation work.

Questions: – What feeder‑level reliability detail is feasible under security constraints? – Can PEC share GIS data under confidentiality protections? – Is PEC willing to participate in a shared public performance dashboard?


Vegetation, Aesthetics, Environmental, and Safety

• Vegetation Partnership. Joint wildfire‑mitigation planning, shared trimming schedule, advance notice in parks/trails/gateway corridors.
• Streetlight Program. Conversion of City‑served streetlights to LED, dark‑sky compliant fixtures with repair tracking.

Questions: – Can PEC provide advance notice and post‑work reporting for high‑impact trimming areas? – Will PEC commit to dark‑sky compliant replacements and a time‑bound conversion schedule?


Sustainability & Community Development

• Energy Efficiency Funding. An annual contribution (or portion of franchise fee value) for resident and City facility efficiency improvements.
• EV Charging Pilots. 2–4 public chargers with usage data to inform policy.
• Workforce & Education Partnerships. LVISD lineworker and STEM support opportunities.

Questions: – What funding level for efficiency programs is realistic? – Is PEC open to EV pilot installs with shared data? – Can PEC formalize an LVISD partnership with annual reporting?


Financial & Administrative Innovation

• Shared Grant Applications. Partner on grants related to grid reliability, wildfire planning, or multi‑jurisdiction resilience.

Question: – Will PEC co‑sponsor or provide match contributions when feasible?


Governance & Accountability

• Annual Joint Work Plan. Shared annual priorities, timelines, and progress tracking.
• Mid‑Term Review at Year Five. Evaluate performance, community benefits, and opportunities for adjustments.

Questions: – Can PEC agree to annually adopt a shared work plan? – Will PEC support a formal mid‑term performance review with amendment pathways?

Relocation, Undergrounding & Cost Allocation

• Retain the standard rule: PEC pays for relocations associated with City public works in ROW; third parties reimburse PEC for third‑party driven relocations. City pays overhead‑to‑underground differential only when undergrounding is a City‑requested aesthetic or policy choice beyond safety/reliability needs.

Fallback In‑Kind Value (If PEC Insists on 2%)

• Annual energy‑efficiency fund benefiting residents and City operations.
• Time‑bound LED/dark‑sky streetlight conversion at PEC cost.
• EV charging pilot sites with usage reporting.
• Joint trenching guarantee with City conduit rights.
• Quarterly reliability data + public performance dashboard.
• EOC liaison participation and annual emergency drills.

Closing Note

I share this to support continuity and to provide negotiation structure and historical context as the new Council steps into this work. I have full confidence in the incoming Council and appreciate the opportunity to contribute during transition. I look forward to supporting the City’s continued progress from the outside.

 

[Norma Owen]

Fellow Councilors,

As we look to finalize the structure of the PEC franchise agreement, particularly the concept of automatic renewal, I think it may be helpful to frame the discussion around a practical question:

“If the agreement expires without a replacement, what authority does the City actually gain that we do not already have under the existing franchise?”

Electric utilities such as Pedernales Electric Cooperative operate under a Certificate of Convenience and Necessity (CCN) issued by the Public Utility Commission of Texas. That certificate obligates the utility to continue serving customers within its territory regardless of whether a municipal franchise agreement is in place.

In other words, the franchise agreement does not determine whether electric service continues. What it governs is the relationship between the City and the utility, particularly the use of public rights-of-way and the franchise fee paid to the City.

Looking at how other Texas cities handle PEC franchise agreements, most seek to renew or extend them before expiration in order to maintain a clear operating framework.

For example:

Cedar Park renewed its PEC franchise before expiration and extended the agreement for ten years while increasing the franchise fee from 4% to 4.5%.
https://communityimpact.com/austin/...ctric-coop-under-consideration-in-cedar-park/

Buda similarly began negotiations as its long-standing PEC franchise approached expiration to ensure continuity in right-of-way authority and franchise fee payments.
https://d2kbkoa27fdvtw.cloudfront.net/buda-tx/03bf5552d15cdecc75f015c412c36a8b0.pdf

Austin
Austin also renewed its PEC franchise agreement to maintain the framework governing right-of-way use and franchise fee payments for PEC customers located within the city limits.
Source:
https://services.austintexas.gov/edims/document.cfm?id=346072

These examples suggest that cities generally avoid allowing franchise agreements to lapse because doing so can introduce uncertainty in areas such as:

• franchise fee revenue
• authority governing the placement of utility infrastructure in city rights-of-way
• coordination of street, drainage, and capital improvement projects involving utility infrastructure

It is also worth noting that the packet materials identify several operational considerations tied directly to the franchise framework, including coordination on joint trenching (“dig once”) policies, improved right-of-way data sharing and infrastructure planning, and maintaining standard cost allocation rules where utilities relocate facilities for public works projects while the City only pays the incremental cost when undergrounding is requested for aesthetic or policy reasons. These types of provisions reinforce that the franchise agreement primarily governs infrastructure coordination and right-of-way management, not simply electric service delivery.

In my view, an automatic renewal framework can actually preserve leverage for the City by maintaining continuity while still allowing the City and PEC to negotiate improvements to the agreement when appropriate. Without an artificial deadline, negotiations can occur deliberately rather than under time pressure.

I look forward to hearing everyone’s thoughts as we continue working through the best path forward for Lago Vista.

 

[Adam Benefield]

During our last meeting, the City Manager mentioned that reducing the PEC franchise fee from 4% to 2% would likely go unnoticed by residents and would not meaningfully change individual utility bills. That comment prompted me to think about the inverse of that statement.

If a reduction would not be noticeable, would a small increase be noticed?

Based on our current franchise revenue of approximately $500,000 per year, increasing the fee by just 0.5% (from 4% to 4.5%) would generate a little over $60,000 annually for the City. Spread across the community, that equates to roughly fifty cents per household per month.

This raises an interesting question: how could that revenue be invested in a way that directly benefits the community and supports our local economy?

One opportunity worth exploring is EV charging infrastructure. There are very few charging stations in the region. As a result, mapping and route-planning software used by EV drivers often routes travelers around communities that lack charging access. In effect, Lago Vista gets bypassed entirely.

What if the City created a grant or incentive program for local businesses that would help them install and maintain EV charging stations?

Through a partnership approach, the City could help offset installation costs while local businesses host and maintain the chargers. This could encourage route-planning systems to direct travelers into Lago Vista rather than around it. While their vehicles are charging, visitors may shop at our grocery stores, eat at local restaurants, or explore other local businesses before continuing to their next destination.

Even a modest program could begin positioning Lago Vista as a charging destination rather than a charging gap on the map.

In this scenario, the benefits could be shared across the community:
• Local businesses gain additional customers and traffic
• Visitors discover Lago Vista and its amenities
• Residents gain convenient access to charging infrastructure
• The City leverages a very small fee adjustment to support economic development

I would be interested in hearing whether this is something Council and staff might consider exploring further as part of the broader PEC franchise discussion.

 

[Shane Saum]

Mr. Benefield,

I may be misunderstanding the direction of your proposal here, so I would appreciate some clarification.

On March 5 you proposed reducing the PEC franchise fee from 4% to 2%. Now on March 11 the discussion is about increasing it to 4.5%. Council has had the draft PEC agreement since approximately October or November of 2025, and these proposals had not been raised during those previous months of discussion. I just want to make sure we fully understand your intended policy objective.

Is the goal to reduce franchise fees for residents, or to increase them in order to fund new city programs?

More broadly, I think it is important for residents that we approach public policy with consistency and transparency. When proposals shift quickly between lowering and increasing fees, it can make it difficult for the public to understand what the long term direction is.

I am also curious about the premise that Lago Vista lacks EV charging infrastructure. A private development along Lohman Ford is already installing charging stations, which is publicly visible on their project signage.

Given that the private sector is already moving in this direction, what gap do you believe the city would need to fill through a subsidy or incentive program?

 

[Adam Benefield]

Shane,

Thank you for the question.

Since October, I have consistently raised concerns about the 4% franchise fee and have been the only member of Council to advocate for reducing what is effectively a hidden tax collected through residents’ utility bills, this includes you.

During the most recent meeting, I again raised the idea of lowering the rate, and the feedback expressed by the City Manager was that "a 2% reduction would likely go unnoticed by residents, I really believe that." After reviewing the recording, I did not hear any objections to that statement from you or others.

That comment is what prompted my follow-up thought. If Council truly believes residents would not notice a reduction of that size, then it raises an interesting question: would they notice a very small increase?

As Councilor Owen pointed out, cities like Cedar Park recently increased their PEC franchise fee from 4% to 4.5%. Based on our current revenue, a half-percent adjustment would generate roughly $60,000 annually, which equates to about fifty cents per household per month.

My preference remains reducing it from 4% to 2% so residents keep more of their money. However, if the Council’s consensus is that the rate should not be reduced, then I believe it is reasonable to ask whether a small increase could be used strategically to benefit the community and support local businesses.

With respect to EV charging infrastructure, I am aware of the private project currently installing chargers along Lohman Ford. That is a positive step. My suggestion is to think more broadly about how the City could encourage additional installations throughout the community. A modest grant or incentive program could help local businesses from our breweries to gas stations to retail centers which bring travelers into Lago Vista rather than routing around it.

Programs like this are commonly supported through small public incentives that encourage private investment and economic activity.

So to answer your question directly: my first preference is still reducing the rate from 4% to 2%. If the Council is unwilling to support that reduction, then I believe it is fair to explore whether a very small increase could be leveraged to strengthen our local economy and support our business community.

My question to you: Will you support my effort in reducing this hidden tax on the citizens from 4% - 2%? If no, will you support our local business and economy by a 0.5% increase for a robust grant program? If no, business as normal?

Adam C. Benefield