Untangling and Reinvigorating Utility Franchises

Franchises are an underexamined tool of public utility regulation. Beyond oversight by state public utility commissions and the Federal Energy Regulatory Commission, utilities must obtain franchises granting exclusive service territories, issued by states or municipalities. Franchise practices vary widely: some are perpetual or extremely long (e.g., 50 years), others are frequently renewed, and their terms differ substantially in what utilities must provide in exchange for monopoly rights.

Despite this leverage, franchises are rarely viewed as instruments of the energy transition. Yet the threat of nonrenewal and the ability to impose conditions give states and cities meaningful bargaining power. However, limited legal and policy analysis leaves governments uncertain how far this leverage extends—whether franchises can mandate gas phase-downs, renewable targets, rate protections, or utility replacement. This project analyzes these legal uncertainties and aims to deliver practical guidance for cities and states on franchises as modern energy policy tools.

Shelley Welton

Presidential Distinguished Professor

Shelley Welton is Presidential Distinguished Professor of Law and Energy Policy with the Kleinman Center and Penn Carey Law. Her research focuses on how climate change is transforming energy and environmental law and governance.

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