The city of Gainesville and Atlanta Gas Light Company have reached a settlement after a miscalculation led to the utility company overpaying in franchise fees to the city.
According to city documents, Atlanta Gas Light pays the city franchise fees every year, and that rate is calculated by multiplying the franchise fee factor of $14.95 by the “Dedicated Design Day Capacity” in the city as of the last day of the previous fiscal year. According to the Atlanta Gas Light website, the “Dedicated Design Day Capacity” is a charge that recovers costs associated with delivering gas to a home or business.
However, in 2016-2017, the Dedicated Design Day Capacity was initially miscalculated. Atlanta Gas Light should have paid the city $11,828.92 but instead paid $197,402.70, according to city documents. Since then, Atlanta Gas Light has been withholding franchise fees to recoup the loss, but now the two parties are settling the discrepancy.
City Attorney Abb Hayes said Atlanta Gas Light miscalculated the fee for 2016-2017 and later contacted the city about the overpayment.
The remaining balance on the overpayment is $146,000, Hayes said at an Aug. 27 Gainesville City Council work session. The gas company has agreed to accept a payment of about two-thirds of that remaining balance, Hayes said. It was unclear why it didn’t request a full refund.
The city will pay a lump sum of $97,363.93 to Atlanta Gas Light, saving about $48,000 in the agreement. The City Council unanimously approved the agreement Tuesday, Sept. 1.
“Atlanta Gas Light appreciates its relationship with the City of Gainesville and is pleased to have worked together to reach a resolution that benefits the City and our customers fairly,” Atlanta Gas Light said in a statement. “We will continue to partner with the City to meet our customer commitments to provide clean, safe, reliable and affordable natural gas service.”