Pensacola Energy customers to receive refunds for overcharges dating back to August 2011 after historic judge decision
Pensacola, Florida – Escambia County Circuit Court Judge Jan Shackelford has decided in a historic ruling that the City of Pensacola must reimburse an estimated $18 to $20 million in franchise fees deemed unconstitutional, paid by Pensacola Energy consumers since August 2011. This decision also forbids city collecting of these fees going forward.
Initiated by Pensacola native Dr. Eric L. Frank and representing a class of impacted consumers, the case contested the validity of the city’s fees paid for the use of its property for providing natural gas services. The lawyers for Dr. Frank, Matt Dannheisser, and Artie Shimek contended that the city’s charging Pensacola Energy, a “franchise fee” then passed on to consumers, amounted to an illegal tax.
“The City charges its own gas department, Pensacola Energy, a “franchise fee” to use land owned by the city to deliver the natural gas to homes and businesses within the city. Pensacola Energy then passed that charge on to its customers. In other words, the City purports to charge itself a fee to use its own property,” Shimek explained as reported by the South Santa Rosa News.
This problem is caused by laws passed in 1970 under which the city levies taxes without appropriate legal authority, therefore causing decades of incorrect financial burden on its residents. Furthermore aggravating the situation was the city’s 10% public services tax on the already inappropriate franchise fees, all of which Judge Shackeford has now decided must be reimbursed. The Judge essentially has directed the City to reimburse 6.6% of the payments made by in-city natural gas consumers.
Dannheisser emphasized the importance of this win for customers since the city has been hiding these illegal taxes under franchise fees for more than half a century. This decision not only fixes future collections but also requires the refund of millions of past overcharges.
Still, the triumph is conflicting. Florida law limits the recovery of improper charges to those gathered four years before the action was filed in 2015. Consequently, fees paid between 1970 and 2011 will not be refunded, so maintaining a significant financial benefit for the city from earlier decades.
The next steps involve setting up a Court-supervised claims process to manage the refunds, which could benefit between 20,000 to 30,000 current and former customers of Pensacola Energy.
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“Through a court approved and supervised claims process, customers will be notified of their right to a refund. A website will be established to better facilitate payments to every customer,” Dannheisser noted.
Considering the protracted fight, Dr. Frank thanked his legal team for their commitment to redressing this historical injustice. Although many didn’t see the possibility for success, Dr. Frank said he appreciated Matt and Artie understood the value in this situation.
Although the city has to change its billing policies and reimburse the fees paid during the designated period, the more general issue of responsibility for the fees paid before 2011 remains unresolved, leaving some like Dr. Frank hoping for additional City Council corrections.
