VOTERS CONSIDER FRANCHISE

After more than three years of negotiations, the city of Cape Girardeau and Union Electric Co. are poised to implement new gas and electric franchises, approval of which now rests solely with the city's voters.

Voters Nov. 5 will decide whether to approve the new 20-year franchises, which include much more detailed and complete provisions than the old agreements that expired more than two years ago.

City Manager J. Ronald Fischer said the old franchises were "sketchy" and broad, but the new proposals give the city greater powers and enforcement capacity.

He also said the new agreements will mark a new cooperative "partnership" between the city and Union Electric.

"We're entering into a partnership with Union Electric that we haven't had before not a financial partnership but a partnership in that these franchises allow the city and Union Electric to work together to accomplish controlled growth for Cape Girardeau," Fischer said.

Some of the new provisions in the gas and electric franchises include:

A 30-month warranty on street repairs when utility work damages city streets.

A 10 percent discount on the city's street light bill, which would save taxpayers $500,000 over the 20-year term of the franchises.

Giving the city the right of first purchase should the electric or gas systems be sold by UE.

A termination procedure should UE breach the terms of the franchise.

Guaranteed continued service if the city purchases the system or starts its own system.

Prohibitions against UE selling its franchise rights without the city's permission.

Allowing the city, if it chooses, to operate its own electric and gas business in competition with UE.

Granting the city "wheeling" rights to wholesale utility transmission, which will allow the city to purchase power from a source other than Union Electric and have that power transmitted, or "wheeled" on UE's lines.

A stipulation that Union Electric will comply with city health and safety regulations not addressed by the Public Service Commission.

Granting the city manager new authority in dealing with Union Electric a "good faith" gesture on the part of the utility company to acknowledge the city's rights in settling possible disputes over service, franchise fees and rates.

Coordination by UE and the city in regards to capital improvement plans.

Assurances by Union Electric that it will continue to operate a local business office in Cape Girardeau throughout the 20-year term of the franchise.

If voters reject the franchises, the city and UE will have to start from scratch and begin negotiations again, or the city will have to resubmit the issue to voters, Fischer said.

The city manager maintained there would be little to negotiate and the city probably would continue to simply submit the same proposals to the voters until they're accepted.

After the previous franchises expired, Union Electric refused to accept three extensions to the agreements, wanting instead to negotiate new franchises and operate under temporary permits. The utility company is required by law to maintain service even without a franchise agreement.

Without the franchises, Union Electric essentially operates under the regulations set forth by the Missouri Public Service Commission. Fischer said the company can continue to operate indefinitely without franchise agreements, as it does in many cities.

But Cape Girardeau's city charter, adopted in 1981, requires the franchise agreements for city utilities and cable television service.

One item that apparently was a sticking point in drafting new franchises was the fate of the city's water system. The Cape Girardeau water system is the only one UE owns and operates.

The system was purchased by UE when the company merged with Missouri Utilities Co. in December 1983. Last year, UE stated its intention of selling the system.

Cape Girardeau negotiated the purchase of the system as part of a package that includes the electric and gas franchises. But the items will be voted on as separate issues in the Nov. 5 election.

Fischer said he couldn't imagine any reason why the voters wouldn't approve all three measures.

"I encourage the people to support these franchises, and the purchase of the water system," he said.

"They're good franchises both from Union Electric's side and the city's side, and I think the whole community will benefit from approving them.

"And in turn, I wholeheartedly support the purchase of the water system," he said. "With good franchises and ownership of the water system, we'll have a good deal of control over economic development and a good working relationship with Union Electric."

An advisory group that no longer exists recommended in 1987 that the city "proceed with the process of municipalization" of the electric and water systems, provided that further study indicated it was economically feasible.

But the city staff and many of the City Council members have since concluded that the high cost of municipalization of the electric system might make such a move impractical.

The matter was put on hold in 1988 after the council issued temporary two-year permits to UE. Another set of one-year permits was issued last year. Those permits expired in March.