FAQ: What does the PSO non-exclusive franchise mean?

The City of McAlester is asking voters in a Feb. 13, 2024 special election if they want to approve a 25-year non-exclusive franchise with Public Service Co. of Oklahoma. Here are some questions and answers on what that means.

What does the ballot language say?
The ballot language asks voters if they want to grant PSO a 25-year non-exclusive franchise “to build, equip, maintain, extend, own, and operate a system for the manufacture, transmission, distribution, sale, and control of electricity and communications circuits for itself and others” in the City of McAlester, with PSO agreeing to charge legal rates for the electric service and pay the City a monthly fee on gross receipts from the delivery and sale of electricity.

What does that mean?
If voters approve the ordinance, it means PSO will be granted a 25-year franchise to operate and provide electric services in the City of McAlester. These kinds of agreements are common because a public utility must have a franchise before it can use streets or public grounds to operate under Oklahoma law.

Will PSO be the only provider allowed to provide service in the City under this agreement?
No, the City can grant others to provide electric services in city limits.

How does this agreement benefit McAlester?
If the franchise is approved, PSO will pay a franchise fee to the City that is equal to 2% of gross receipts from delivery and sale of electrical energy in city limits. The payment is paid monthly in lieu of other fees or taxes, except assessments for special improvements and ad valorem taxes.

Where does the franchise fee go?
Franchise fees the City receives go into General Fund and are part of revenues funding the City. Those funds are used in everyday operations.