BWL Operating in East Lansing Without Franchise Agreement

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East Lansing, Mich. (WILX) The Lansing Board of Water and Light has been operating in the City of East Lansing without an explicit franchise agreement for more than 45 years.

In a memo sent to East Lansing Mayor Nathan Triplett from city attorney Tom Yeadon in January, Yeadon says the utility is "simply operating in the city of East Lansing without a permit or utility service franchise."

Triplett says the memo was prompted after questions raised by some residents following the December ice storm outages of whether customers would be able to opt to receive service from a different utility company.

According to the Michigan Constitution, which is mentioned in the memo, no public utility has the right to use a municipality's streets without consent from the municipality.

Yeadon went on in the memo to say the city has "arguably at least given implicit consent over the last 45 years as we have allowed [Board of Water and Light] to operate in the city without objection and without a franchise..."

However, the city did adopt an ordinance in 2012 granting Consumer's Energy another 30-year non-exclusive franchise to use city streets for its power lines.

Lansing attorney Steve Transeth, who is a former commissioner with the Michigan Public Service Commission, says while the utility isn't breaking any laws by providing service, the lack of an agreement does open to the door to other ambiguities, like who has claim to the infrastructure within the right of way.

"Unless you have that written agreement that says who has the rights and authority, it's pretty much up in the air," Transeth said.

"It just makes sense that when you're talking about a service as important as electric... you would want to make sure you had a clear understanding as to what obligations and authorities all the parties had."

Triplett acknowledges the need for a franchise agreement, but it's not a top priority.

"In the long run it would be our preference to negotiate an appropriate franchise agreement with the Board of Water and Light which could deal with a number of detail issues," he said.

"I think part of our ongoing conversations with BWL about response to ice storm, about the issue of regional representation will include the conversation about the future of a franchise agreement."

Though Triplett said the agreement doesn't necessarily carry as much weight anymore, because of a change in state statute in 2008 over how utilities are governed and regulated.

The 2008 change to the law says except with the written consent of the municipally-owned utility, an existing BWL customer cannot get service from another utility provider.

When asked on Monday about why the utility didn't have a franchise agreement with the city of East Lansing, General Manager J. Peter Lark said he'd have to look into it.

"You're asking me a question that I can't tell you the answer to," Lark said. "I'd have to do research on that."

A BWL spokesperson said Tuesday the utility's legal counsel was reviewing the memo.

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