(WSVN) - Would you pay a fee if you didn’t know what it was? Well you might be. Ever heard of a franchise charge? It’s on your FPL electric bill and you have to pay it each month. Who gets that money? Is it another tax on you? It’s why one South Florida woman called Help Me Howard with Patrick Fraser.
Twins and a two-year-old. Meet the very busy Mercy Velez.
Mercy Velez, franchise charge concerns: “I am, but I love it. I love being a mom.”
Raising three children is a lot of work, and not only is Mercy a good mother, she is also a good shopper.
Mercy Velez: “I will Google, I will look for the best deal. Yes, I am definitely a bargain hunter.”
Then when she was paying her bills a few days ago, she noticed her FPL electric bill was higher and started looking closely at the bill.
Mercy Velez: “There was a charge for $18 that I had never noticed before, so when I checked to see what it was, it was a franchise fee. I had no idea what a franchise fee was.”
The $18 franchise charge was listed right above her nearly $26 utility tax, which is the money your city collects from you. So Mercy started asking questions about the franchise charge.
Mercy Velez: “I got on the phone. Customer service rep. had no idea what I was talking about.”
She went on social media. Her friends and family said they had not noticed that franchise fee either.
Mercy Velez: “I have everybody telling me their fees. They were like, ‘This month I had $18.’ ‘I had $10.’ Everybody has a different fee. Obviously it’s a percentage based on your total bill.”
More research and Mercy found out FPL collected that franchise charge for the city and turned it all over to them.
Mercy Velez: “I was never told about it and I just got slapped with the fee.”
Mercy said it was then clear to her. Her city, Miramar, was taxing her and then taxing her again while calling it a franchise charge.
Mercy Velez: “When you look at it, it says local tax, state tax. Why does it does not say franchise tax?”
Every FPL customer in Miami-Dade and Broward pays it. Meaning in Mercy’s case, between the utility tax and franchise fee, her city is hitting her with a 15 percent charge on her power bill.
Mercy Velez: “I have been paying this for I don’t know how many years, and have no idea where it’s going.”
Well Howard, what is a franchise charge?
Howard Finkelstein, 7News legal expert: “The legislature allows cities and utilities to sign a contract with each other. In this case, FPL is given the exclusive right to provide power to a city and use the public right of way for poles. In return, FPL pays a franchise fee, which the Florida legislature said you can collect it from your customers and make them pay the city for you. And that’s the franchise charge on your bill.”
The contracts between FPL and cities are for up to 30 years.
FPL sent us a list of the cities in Broward collecting the franchise charge. It seems to be every single municipality.
In Miami-Dade, a few cities chose not to collect it, but according to an FPL spokesperson, the county then collected it and handed part of that over to the city.
The average rate cities charge for the franchise fee is around six percent, but don’t forget your city is also charging eight to nine percent on the utility tax. So Howard, isn’t that a double tax exceeding the amount your government Is allowed to charge?
Howard Finkelstein: “If it walks like a duck and quacks like a duck, it’s a duck. But the Florida legislature and the state supreme court said the franchise charge is not a tax, it’s a fee. And legally, your city and county can do it.”
Mercy Velez: “See that just doesn’t sit well with me.”
Like all of us, Mercy has to pay that franchise charge, but spotting it on her bill did accomplish one thing.
Mercy Velez: “This honestly has woken me up a little bit to say I need to be more involved. I need to ask questions. I need to review things a little bit better.”
So if your city or county didn’t sign up to hit you with a franchise charge, would FPL quit providing power? Of course not. They need customers as much as customers need them. The bottom line is your government wants your money any way they can get it.
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