Columbus, Georgia

INTER-OFFICE COMMUNICATION





DATE: June 3, 2005



TO: Isaiah Hugley, City Manager



FROM: Jaimie DeLoach, Assistant City Attorney



SUBJECT: Georgia Power Franchise Agreement









You have asked me whether the 35 year term for the new Georgia Power franchise

agreement is legally required.





ANSWER: The Georgia Public Services Commission has set forth the 35-year term

as part of the rate schedule. The rate schedule provides that a city?s

franchise tax of 4% shall be billed to the individual customers unless Georgia

Power is obligated to pay the 4% pursuant to a franchise having a definite term

of at least 35 years. This 35-year term was challenged in a lawsuit brought by

the cities of Lithonia, Doraville, Pelham and Covington. City of Lithonia v.

Georgia Public Service Commission, 238 Ga. 339 (1977). The Georgia Supreme

Court held that the 35-year term was reasonable. Therefore, although the

35-year terms is not mandatory, I advise that the City agree to the 35-year

term in order to save our citizens from paying an additional 4% tax.



Let me know if you need anything else.