Loading...
CR2002-143 Franchise - Reliant . c\ TY OF - . September 3, 2002 HOPKINS Council Report 2002-143 Second Reading of Ord. 2002-879 - Franchise Ordinance for Reliant Energy Minnegasco Proposed Action Staff recommends that the Council approve the following motion: Move to approve Ordinance 2002-879 for second readinq, approve the summary of Ordinance 2002-879 and order the summary published and posted at the Hopkins Activitv Center. This ordinance has not changed since the first reading, SupportinQ Information . Ordinance 2002-879 . Summary of Ordinance 2002-879 ~~4~ Steve Statiner Assistant to the City Manager . Financial Impact: $ Budgeted: Y/N Source: Related Documents (CIP, ERP, etc.): . Notes: CITY OF HOPKINS . Hennepin County, Minnesota ORDINANCE NO. 2002-879 FRANCHISE ORDINANCE FOR RELIANT ENERGY MINNEGASCO AN ORDINANCE GRANTING TO RELIANT ENERGY MINNEGASCO, A NATURAL GAS UTILITY, A DIVISION OF RELIANT ENERGY RESOURCES CORPORATION, ADELA WARE CORPORA TION, ITS SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE FRANCHISE TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN FACILITIES AND EQUIPMENT FOR THE TRANSPORTATION, DISTRIBUTION, MANUFACTURE AND SALE OF GAS ENERGY FOR PUBLIC AND PRlV A TE USE AND TO USE PUBLIC RIGHTS OF WAY OF THE CITY FOR SUCH PURPOSES; AND PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF. THE CITY COUNCIL OF THE CITY OF HOPKINS DOES HEREBY ORDAIN: SECTION 1. DEFINITIONS. For purposes of this Ordinance, the following capitalized terms shall have the following meanings: . 1.1, City. The City of Hopkins, County of Hennepin, State of Minnesota. 1.2. City Utility System. Facilities used for providing non-energy related public utility service owned or operated by the City or agency thereof, including sewer and water service, stonn sewer, street lighting and traffic signals but excluding facilities for providing heating or other forms of energy. 1.3. Commission. The Minnesota Public Utilities Conunission, or any successor agency or agencies, including an agency of the federal government that preempts all or part of the authority to regulate gas retail rates now vested in the Commission. 1.4. Company. Reliant Energy Minnegasco, a Division of Reliant Energy Resources Corporation, its successors and assigns, including successors to assignees of those portions of the Company tbat constitute any part or parts of the Gas Facilities subj ect to this franchise. 1.5. Effective Date. The date on which the ordinance becomes effective under Section 2.2. 1,6. Gas. Natural gas, manufactured gas, mixture of natural gas and manufactured gas or other forms of gas energy. 1.7. Gas Facilities. Gas transmission and distribution pipes, mains, lines, ducts, fixtures, and all . necessary facilities, equipment and appurtenances owned, operated or otherwise used by the Company for the purpose of providing gas energy for public use. 1 1.8. Non-Betterment Costs. Costs incurred by the Company from relocation, removal or rearrangement of Gas Facilities that do not result in an improvement to the Gas Facilities. . 1.9. Notice. A writing served by a party or parties on another party or parties. Notice to Company must be mailed by 1st class United States Mail to: Reliant Energy Minnegasco V.P., Regulatory & Supply Service 800 LaSalle A venue Minneapolis, MN 55402 Notice to City must be mailed by l5t class United States Mail to: City of Hopkins ATTN: City Manager 1010 15t St. So. Hopkins, MN 55343 1.10. Public Right-of-Way or Right-of-Way. The area on, below, or above any public roadway, highway, alley, street, cartway, bicycle lane and public sidewalk in which the city has an interest and includes all areas, owned, granted or established for public rights-of-way for travel purposes or public utility easements. Public right-of-way includes areas that have not been opened or improved for street use or other public purposes. A right-of-way does not include the airwaves above a right-of-way with regard to cellular or other non-wire telecommunications or broadcast servIce. . 1.11. Right-of-Way Management Ordinance. Right-of-Way Management Ordinance shall mean and refer to Section 805 of the Hopkins Code of Ordinances which regulates the installation and maintenance of utility improvements within public right-of-way. SECTION 2. FRANCHISE. 2.1 Grant of Franchise. The City grants the Company, for a period of twenty (20) years from the Effective Date, the right to import, manufacture, transport, distribute and sell Gas for public and private use within and through the limits of the City, This right includes the provision of Gas that is (i) manufactured by the Company or its affiliates and delivered by the Company, (ii) purchased and delivered by the Company or (iii) purchased from another source by the retail customer and delivered by the Company. For these purposes, the Company may constmct, operate, repair and maintain Gas Facilities in, on, over, under and across the Public Right-of- Way subject to the provisions ofthis ordinance, The Company may do all things reasonably necessary or customary to accomplish these purposes, subject however, to such statutes, ordinances and regulations as currently exist including the Right-of-Way Management Ordinance, the provisions of which are incorporated in this Franchise Ordinance. The Company shall be given Notice 60 days in advance of the proposed adoption of future amendments to the Right-of-Way Management Ordinance that would materially impair or affect any ofthe Company's rights under this Ordinance. The City and Company shall negotiate in good faith to agree upon the provisions of any such amendments to the Right-of-Way Management Ordinance. lfthe City and Company . are unable to agree, disputes will be handled under the terms of Section 2.6 Default, of this Ordinance, Future amendments to the Right-of-Way Management Ordinance that would materially impair or affect any of the Company's rights under this Ordinance shall be binding on the Company only when agreed upon as provided in this section 2.1. 2 2.2 Effective Date. This franchise is effective from and after its acceptance by the Company. . Written acceptance or rejection of the franchise by the Company must be filed with the City Clerk within ninety (90) days after publication of this ordinance or this Ordinance shall no longer be effective. 2.3 Non exclusive Franchise. This ordinance does not grant an exclusive franchise, 2.4 Legal Fees. Each party is responsible for its own legal fees incurred related to granting of this franchise. 2.5 Publication Expense, The expense of publication of this ordinance must be paid by the Company. 2.6 Dispute Resolution. If the City or Company asserts that the other party is in default in the performance of any obligation hereunder, the complaining party must notify the other party in writing of the default and the desired remedy, Representatives ofthe parties must promptly meet and attempt in good faith to negotiate a resolution of the dispute. Ifthe dispute is not resolved within thirty (30) days after service of the Notice, the parties shall select a mediator to facilitate further discussion. The parties will equally share the fees and expenses of the mediator. If a mediator is not used or if the parties are unable to resolve the dispute within thirty (30) days after first meeting with the mediator, either party may commence an action in District Court to interpret and enforce this franchise or for such other relief as may be permitted by law or equity. The provisions of this section 2,6 shall not be interpreted to limit, impair or restrict the City's . rights and remedies under the Right-of-Way Management Ordinance, all of which shall be in addition to the rights and remedies of the City and the obligations of the company under this Ordinance. In the event of any conflict between the terms and provisions of this Franchise Ordinance and those of the Right-of-Way Management Ordinance, as in effect on the Effective Date of this Ordinance, relating to the management of the Public Right-of-Way, the terms and provisions of the Right-of-Way Management Ordinance shall control SECTION 3. CONDITIONS OF USE. 3,1 Location of Facilities. Gas Facilities in the Public Right-of-Way shall be located, permitted, constructed, and maintained so as not to disrupt normal operation of any City Utility system and to otherwise comply with the Right-of- Way Management Ordinance. 3.2 Field Location. Upon request by the City, the company must provide field locations for any of its Gas Facilities within the period of time required by Minnesota State Statute 216D. 3.3 Permit Required. The Company shall be subject to all permitting requirements of the Right-of- Way Management Ordinance. 3.4 Restoration. Restoration of the Public Right-of-Way shall be subject to the Right-of-Way Management Ordinance. After completing work requiring the opening of a Public Right-of-Way, the Company must restore the same, including paving and its foundation, to the condition . formerly existing and maintain the paved surfaces in good condition for two years thereafter. The work must be completed as promptly as weather permits. If the Company does not promptly perform and complete the work, remove all dirt, rubbish, equipment and material, and restore the Public Right-of-Way, the City may, after demand to the Company to cure and the passage of a reasonable period of time not less than five calendar days following the demand, make the 3 restoration at the expense of the Company. The Company must pay to the City the cost of such work done for or performed by the City, including administrative expense and overhead, plus ten . percent of cost and administrative expense, This remedy is in addition to any other remedies available to the City for noncompliance with this section or with the Right-of-Way Management Ordinance. 3.5 Protection of Gas Facilities in Public Ways: The Company must take reasonable measures to prevent the Gas Facilities from causing damage to persons or property, The Company must take reasonable measures to protect the Gas Facilities from damage that could be inflicted on the Gas Facilities by persons, property or the elements. The Company and the City will comply with all applicable laws and codes when performing work near the Gas Facilities. Nothing in this Ordinance relieves any person from liability arising out of the failure to exercise reasonable care to avoid damaging Gas Facilities while performing any activity, 3.6 Notice of Improvements. The City must give the Company reasonable Notice of plans for improvements to Public Rights-of-Way where the City has reason to believe that Gas Facilities may affect or be affected by the improvement. The notice must contain; (i) the nature and character of the improvements, (ii) the Public Rights-of-Way upon which the improvements are to be made, (iii) the time when the City will start the work, and, (iv) if more than one Right-of- Way is involved, the order in which the work is to proceed. The Notice must be given to the Company a sufficient length of time in advance ofthe actual commencement of the work to permit the Company to make any necessary additions, alterations, or repairs to its Gas Facilities. If streets are at final width and grade and the City has installed underground sewer and water mains and service connections to the property line abutting the streets prior to a permanent . paving or resurfacing of such streets, and the Company's main is located under such street, the City may require the Company to install gas service cOlmections prior to such paving or resurfacing, if it is apparent that gas service will be required during the five years following the paving or resurfacing. SECTION 4. RELOCATIONS. 4.1 Relocation of Gas Facilities and Vacation of Public Rights-of-Way: Gas Facilities in Public Rights~of-Way shall be subject to the requirements ofthe Right-of-Way Management Ordinance relating to relocation of Gas Facilities and other utility facilities in Public Rights-of-Way. If the City determines, by the proper exercise of its police power, to vacate a Public Right-of-Way for a City improvements project, or to grade, regrade or change the alignment of any Public Right-of- Way, or construct or reconstruct any City Utility System in any Public Right-of-Way, the City may order the Company to relocate its Gas Facilities at the Company's expense. The City must give the Company sufficient notice of City plans affecting Gas Facilities in the Right-of-Way. The provisions of this Section 4.1 apply only to Gas Facilities constructed in reliance on this franchise or any prior franchise granted to the Company or its predecessors and the Company does not waive its rights under an easement or prescriptive right acquired by the Company in the Public Rights-of-Way. If the vacation of the Public Right-of-Way does not require the relocation of the existing gas facility, the City shall reserve a public utility easement, created by and within the document establishing the vacation. In no case, however, will City be liable to Company for failure to specifically preserve a Right-of-Way under Minnesota Statutes, Section 160.29, . 4.2 Relocation of Gas Facilities in Public Right-of-Way. The City may, by the proper exercise of its police power, require the Company to relocate the Gas Facilities within or remove the Gas Facilities from Public Right-of-Way, upon a finding by City that the Gas Facilities have become 4 or will become a substantial impairment of the public use or enjoyment to which the Public Right-of-Way is or will be put. The relocation or removal will be at the Company's expense. . The provisions of this Section 4.2 apply only to Gas Facilities constructed in reliance on this franchise or any prior franchise granted to the Company or its predecessors and the Company does not waive its rights under an easement or prescriptive right acquired by the Company in the Public Right-of-Way. 4.3 Projects with Federal Funding. Relocation, removal or rearrangement of any Company Gas Facilities made necessary because of the extension into or through the City of a federally-aided highway project shall be governed by the provisions of Minnesota Statutes, Section 161.46, as supplemented or amended. SECTION 5. DEFENSE AND INDEMNIFICATION. 5.1 Terms. The Company shall indemnify, keep and hold the City, its elected officials, officers, employees, and agents free and harmless from any and allliabiIity on account of injury or death of persons or damage to property occasioned by the construction, maintenance, repair, inspection, the issuance of permits, or the operation of the Gas Facilities located in the Public Rights-of- Way. The City will not be indemnified for losses or claims occasioned through its own negligence except for losses or claims arising out of or alleging the City's negligence as to the issuance of permits for, or inspection of, Company's plans, work, or Gas Facilities. The City will not be indemnified if the injury or damage results from the performance in a proper maimer of acts reasonably determined to be hazardous by Company, and such perfonnance is nevertheless ordered or directed by City, in writing, after notice of Company's determination. . 5.2 Litigation. If such a suit is brought against the City under circumstances where the agreement in this Section 5 to indemnify applies, the Company at its sole cost and expense will defend the City in such suit if Notice thereof is given to the Company within a reasonable period. Ifthe Company is required to indemnify and defend, it will thereafter have control of such litigation, but the Company may not settle such litigation without the consent of the City, which consent will not be unreasonably withheld. This section is not intended to be a waiver of any defense, limitation of liability, or immunity otherwise available to the City. The Company, in defending any action on behalf of the City shall assert in any action every defense, limitation of liability, or immunity that the City could assert. SECTION 6. CHANGE IN FORM OF GOVERNMENT. Any change in the form of government afthe City shall not affect the validity of this Ordinance. Any governmental unit succeeding the City shall, without the consent of Company, succeed to all of the rights and obligations ofthe City provided in this Ordinance. SECTION 7. FRANCHISE FEE. 7.1 Form. During the term of the franchise hereby granted, and in addition to permit fees being imposed or that the City has a right to impose, the City may charge the Company a franchise fee. The fee may be (i) a percentage of gross revenues received by the Company for its operations within the City, or (ii) a flat fee per customer based on metered service to retail customers within . the City or on some other similar basis, or (iii) a fee based on units of energy delivered to any class of retail customers within the corporate limits of the City, The method of imposing the franchise fee, the percentage of revenue rate, or the flat rate based on metered service may differ for each customer class or combine the methods described in (i) - (iii) above in assessing the fee, 5 The City shall seek to use a formula that provides a stable and predictable amount of fees, without placing the Company at a competitive disadvantage. Ifthe Company claims that the . City-required fee formula is discriminatory or otherwise places the Company at a competitive disadvantage, the Company shall provide a fonnula that will produce a substantially similar fee amount to the City and reimburse the City's reasonable fees and costs in reviewing and implementing the formula. The City will attempt to accommodate the Company but is under no franchise obligation to adopt the Company-proposed franchise fee fonnula and each review will not delay the implementation ofthe City-imposed fee. 7.2 Separate Ordinance. The franchise fee shall be imposed by separate ordinance duly by the City Council, which ordinance shall not be adopted until at least thirty (30) days after written Notice enclosing such proposed ordinance has been served upon the Company. The fee shall become effective ten (l0) days after written Notice enclosing such adopted ordinance has been served upon the Company. 7.3 Condition of Fee. The separate ordinance imposing the fee shall not be effective against the Company unless it lawfully imposes a fee of the same or substantially similar amount on the sale of gas energy within the City by any other gas energy supplier, provided that, as to such supplier, the City has the authority or contractual right to require a franchise fee or similar fee through a previously agreed upon franchise, 7.4 Collection of Fee. The franchise fee shall be payable not less than quarterly during complete billing months of the period for which payment is to be made. The franchise fee formula may be changed from time to time, however, the change shall meet the same notice requirements and the . fee may not be changed more often than annually. Such fee shall not exceed any amount that the Company may legally charge to its customers prior to payment to the City. Such fee is subject to subsequent reductions to account for uncolIectibles and customer refunds incurred by the Company. The company agrees to make available for inspection by the City at reasonable times all records necessary to audit the Company's determination of the franchise fee payments. 7.5 Continuation of the Franchise Fee. If this franchise expires and the City and Company are unable to agree upon terms of a new franchise, the franchise fee, if any being imposed by the City at the time this franchise expires, will remain in effect until a new franchise is agreed upon. SECTION 8. LIMIT A TION ON APPLICABILITY, Limitations on Applicability. This Ordinance constitutes a franchise agreement between the City and the Company. No provision ofthis franchise inures to the benefit of any third person, including the public at large, so as to constitute any such person as a third-party beneficiary of the agreement or of anyone or more of the terms hereof, or otherwise give rise to any cause of action for any person not a party hereto. SECTION 9. PREVIOUS FRANCHISES SUPERSEDED. This franchise supersedes and replaces previous franchises granted to the Company or its predecessors. . SECTION 10. AMENDMENTS. Either party to this franchise agreement may at any time propose that the agreement be amended. This ordinance may be amended at any time by the City. An amendatory ordinance becomes effective 6 upon the filing of the Company's written consent thereto with the city clerk within 90 days after adoption. . SECTION 11. NOTICES. Any Notice required to be given by this Ordinance shall be deemed to have been given 2 business days after being sent by 1 st class United States Mail and deposited with the U.S. Postal Service. SECTION 12. SEVERABILITY. If any portion of this ordinance is found unenforceable for any reason, the validity of the remaining provisions will not be affected. First Reading: August 20, 2002 Second Reading: September 3,2002 Date of Publication: September 12,2002 Date Ordinance Takes Effect: Upon acceptance by the Company, Reliant Energy Minnegasco, within 90 days of the Date of Publication as indicated in Subsection 2.2 above, . Gene Maxwell, Mayor ATTEST: Terry Obermaier, City Clerk APPROVED AS TO FORM AND LEGALITY: City Attorney Signature Date . 7 CITY OF HOPKINS . Hennepin County, Minnesota ORDINANCE NO. 2002-879 FRANCHISE ORDINANCE FOR RELIANT ENERGY MINNEGASCO AN ORDINANCE GRANTING TO RELIANT ENERGY MINNEGASCO, ANA TURAL GAS UTILITY, A DIVISION OF RELIANT ENERGY RESOURCES CORPORATION, ADELA WARE CORPORATION, ITS SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE FRANCHISE TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN FACILITIES AND EQUIPMENT FOR THE TRANSPORTATION, DISTRIBUTION, MANUFACTURE AND SALE OF GAS ENERGY FOR PUBLIC AND PRIVATE USE AND TO USE PUBLIC RIGHTS OF WAY OF THE CITY FOR SUCH PURPOSES; AND PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF. The following is a summary of the major provisions of the new ordinance: . The ordinance grants to the Reliant Energy Minnegasco a "nonexclusive franchise to construct, operate, repair and maintain facilities and equipment for the transportation, distribution, manufacture and sale of gas energy for public and private use and to use public rights of way of the City for such purposes." . The ordinance grants to the company a franchise to continue operating within the City and to . use City-owned rights-of-way for a period of 20 years. . The ordinance details the terms and conditions to be followed by the company and the City with regard to the franchise. . In general, the franchise ordinance defers to the City of Hopkins Right-of- Way Management Ordinance. . The ordinance establishes procedures by which a franchise fee may be imposed if such a fee is ever implemented by the City. A printed copy of the entire ordinance is available from the City Clerk and at the Hopkins Activity Center. First reading: August 20, 2002 Second reading: September 3, 2002 Date of Publication: September 12, 2002 Date Ordinance Takes Effect: Upon acceptance by the Company, Reliant Energy Minnegasco, within 90 days of the Date of Publication listed above. Mayor . ATTEST: Terry Obermaier, City Clerk CITY OF HOPKINS . Hennepin County, Minnesota ORDINANCE NO. 2002-879 FRANCHISE ORDINANCE FOR RELIANT ENERGY MINNEGASCO AN ORDINANCE GRANTING TO RELIANT ENERGY MINNEGASCO, A NATURAL GAS UTILITY, A DIVISION OF RELIANT ENERGY RESOURCES CORPORATION, ADELA WARE CORPORATION, ITS SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE FRANCHISE TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN FACILITIES AND EQUIPMENT FOR THE TRANSPORTATION, DISTRIBUTION, MANUFACTURE AND SALE OF GAS ENERGY FOR PUBLIC AND PRIV A TE USE AND TO USE PUBLIC RIGHTS OF WAY OF THE CITY FOR SUCH PURPOSES; AND PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF. The following is a summary of the major provisions of the new ordinance: . The ordinance grants to the Reliant Energy Minnegasco a "nonexclusive franchise to construct, operate, repair and maintain facilities and equipment for the transportation, distribution, manufacture and sale of gas energy for public and private use and to use public rights of way of the City for such purposes." . The ordinance grants to the company a franchise to continue operating within the City and to . use City-owned rights-of-way for a period of 20 years. . The ordinance details the terms and conditions to be followed by the company and the City with regard to the franchise. . In general, the franchise ordinance defers to the City of Hopkins Right-of-Way Management Ordinance. . The ordinance establishes procedures by which a franchise fee may be imposed if such a fee is ever implemented by the City. A printed copy of the entire ordinance is available from the City Clerk and at the Hopkins Activity Center. First reading: August 20, 2002 Second reading: September 3, 2002 Date of Publication: September 12,2002 Date Ordinance Takes Effect: Upon acceptance by the Company, Reliant Energy Minnegasco, within 90 days of the Date of Publication listed above. Mayor . ATTEST: Terry Obermaier, City Clerk