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Metro Council Rejects LG&E Franchise Agreement

city Hall
city Hall

The Louisville Metro Council rejected a bid from Louisville Gas and Electric to establish a natural gas franchise agreement.

Such an agreement would give the utility company access to public rights of way to transmit and distribute natural gas across Louisville in exchange for a fee to Metro government.

The council voted unanimously to reject the bid at its regular meeting Thursday evening.

Without a franchise agreement -- the current deal expires at the end of this month -- the utility company would cease its collection of a 2 percent franchise fee from consumers, according to a council spokesman.

The current agreement's 2 percent fee has generated more than $5 million in revenue for the city. It was approved in 2014 in a push from Mayor Greg Fischer to bring in new funding for public safety initiatives, including police and surveillance cameras at Waterfront Park.

Council members decided in 2014 to direct any funds from the franchise fee coming after the March 30 deadline toward paving, according to the council spokesperson. That means no city program or initiative would lose funding if an agreement is not reached by the deadline.

Louisville Gas and Electric will continue to offer gas services without the agreement.

Councilman Bill Hollander, a Democrat from District 9, sponsored the push to reject the proposal. He said the bid proposed by the utility company did not include requirements for LG&E to repair roads and sidewalks damaged during gas line installation.

Hollander said it's "very important to the community" to ensure the utility company is held to a certain standard when it comes to keeping roads, sidewalks and the rights of way in good shape.

Kelly Downard, a Republican from District 16, said the months-long negotiation process with the utility company has been frustrating.

"It has been a difficult process as we met, and we'd hear about rejection and a reluctance to even go into good-faith bargaining," he said.

Both council members said they hope a deal between the city and the utility company could be struck soon.

Julie Hardesty with the Jefferson County Attorney's office said negotiations will continue "to come to an agreement that will be acceptable to Metro government to protect the right of way."

Jacob Ryan is the managing editor of the Kentucky Center for Investigative reporting. He's an award-winning investigative reporter who joined LPM in 2014. Email Jacob at jryan@lpm.org.