VII.2. First Reading Ordinance Granting Centerpoint Energy a Franchise for Gas Energy; Bishop
CITY OF HOPKINS
City Council Report 2023-134
To: Honorable Mayor and Council Members
Mike Mornson, City Manager
From: Nick Bishop, Finance Director
Date: December 5, 2023
Subject: First Reading of An Ordinance Granting Centerpoint Energy a Franchise
for Gas Energy
_____________________________________________________________________
RECOMMENDED ACTION
MOTION TO adopt Ordinance No. 2023-1205 Granting Centerpoint Energy Resources
Corp., A Minnesota Corporation, d/b/a Centerpoint Energy Minnesota Gas, 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 and to use the Public Ways and Grounds of the City of Hopkins,
Hennepin County, Minnesota, for Such Purposes; and Prescribing Certain Terms and
Conditions therof for first reading.
OVERVIEW
Centerpoint Energy currently holds a franchise to operate and supply gas within the City
of Hopkins. The franchise was adopted in 2002 for a 20-year term and is due for
renewal. Franchises are granted under Section 10.02 of the City Code and can be a
maximum of 20 years. Ordinance No. 2023-1205 continues Centerpoint’s Franchise for
an additional 20-year term. It does not have any significant changes compared to the
2002 Ordinance and will not cause any changes to utility services of City Operations.
SUPPORTING INFORMATION
• Ordinance No. 2023-1205
Finance Department
DOCSOPEN\HP145\106\908429.v1-10/12/23
CITY OF HOPKINS
COUNTY OF HENNEPIN
ORDINANCE NO. 2023-1205
AN ORDINANCE GRANTING CENTERPOINT ENERGY RESOURCES CORP., A
MINNESOTA CORPORATION, d/b/a CENTERPOINT ENERGY MINNESOTA GAS
(“CENTERPOINT ENERGY”), 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 AND TO USE THE PUBLIC WAYS AND GROUNDS OF THE
CITY OF HOPKINS, HENNEPIN COUNTY, MINNESOTA, 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 listed in alphabetical order shall have
the following meanings:
City. The City of Hopkins, County of Hennepin, State of Minnesota.
City Utility System. Facilities used for providing public utility service owned or operated by
City or agency thereof, including sewer, storm sewer, water service, street lighting and traffic signals,
but excluding facilities for providing heating, lighting, or other forms of energy.
Commission. The Minnesota Public Utilities Commission, or any successor agency or
agencies, including an agency of the federal government, which preempts all or part of the authority
to regulate gas retail rates now vested in the Minnesota Public Utilities Commission.
Company. CenterPoint Energy Resources Corp., a Minnesota corporation, d/b/a CenterPoint
Energy Minnesota Gas its successors and assigns including all successors or assigns that own or
operate any part or parts of the Gas Facilities subject to this Franchise.
Franchise. This gas franchise ordinance, also referred to as Ordinance.
Gas Energy. Gas Energy includes both retail and wholesale natural, manufactured or mixed
gas.
Gas Facilities. Gas transmission and distribution pipes, lines, mains, ducts, regulators,
fixtures and all necessary equipment and appurtenances owned or operated by the Company for the
purpose of providing Gas Energy for retail or wholesale use.
Notice. A writing served by any party or parties on any other party or parties. Notice to
Company shall be mailed to CenterPoint Energy, Minnesota Division Vice President, 505 Nicollet
Mall, Minneapolis, Minnesota, 55402. Notice to the City shall be mailed to City Manager, 1010 First
DOCSOPEN\HP145\106\908429.v1-10/12/23
Street South, Hopkins, MN 55343. Any party may change its respective address for the purpose of
this Ordinance by written Notice to the other parties.
Ordinance. This gas franchise ordinance, also referred to as the Franchise.
Public Way. Public right-of-way within the City as defined in Minnesota Statutes § 237.163,
subdivision 3 .
Public Ground. Land owned or otherwise controlled by the City for utility easements, park,
trail, walkway, open space or other public property, which is held for use in common by the public or
for public benefit.
SECTION 2. ADOPTION OF FRANCHISE
2.1 Grant of Franchise. City hereby grants Company, for a period of twenty (20) years
from the date this Ordinance is passed and approved by the City, the right to import, manufacture,
distribute and sell Gas Energy for public and private use within and through the limits of the City as
its boundaries now exist or as they may be extended in the future and also the right to transport Gas
Energy through the limits of the City for use outside of the City limits. For these purposes, Company
may construct, operate, repair and maintain Gas Facilities in, on, over, under and across the Public
Ways and, as may be provided by separate instrument, Public Grounds, subject to the provisions of
this Ordinance. Company may do all reasonable things necessary or customary to accomplish these
purposes, subject, however, to such reasonable regulations, or ordinance or permit requirements, as
may be imposed by the City in accordance with state law.
2.2 Effective Date; Written Acceptance. This Franchise shall be in force and effect
from and after the passage of this Ordinance and publication as required by law and its acceptance in
writing by Company. Company shall file a written acceptance with the City within sixty (60) days
after passage.
2.3. Service and Gas Rates. The terms and conditions of service and the rates to be
charged by Company for Gas Energy in City are subject to the jurisdiction of the Commission.
2.4. Publication Expense. Company shall reimburse the City’s expense of publication of
this Ordinance.
2.5. Dispute Resolution. If either party asserts that the other party is in default in the
performance of any obligation hereunder, the complaining party shall notify the other party of the
default and the desired remedy. The notification shall be written. Representatives of the parties must
promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the dispute is not
resolved within thirty (30) days of the written Notice, the parties may jointly select a mediator to
facilitate further discussion. The parties will equally share the fees and expenses of this 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 selected 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.
2.6. Continuation of Franchise. If the City and the Company are unable to agree on the
terms of a new franchise by the time this Franchise expires, this Franchise will remain in effect until
DOCSOPEN\HP145\106\908429.v1-10/12/23
a new franchise is agreed upon, or until ninety (90) days after the City or the Company serves written
Notice to the other party of its intention to allow Franchise to expire, but in no event shall this
franchise continue for more than one year after the expiration of the 20-year term set forth in Section
2.1.
SECTION 3. LOCATION, OTHER REGULATIONS
3.1. Location of Facilities. Gas Facilities shall be located, constructed, and maintained
so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways
and so as not to disrupt normal operation of any City Utility System including specifically any street
lighting or traffic signal system of the City. Gas Facilities may be located on Public Grounds in a
location mutually agreed upon by the city and company. The location and relocation of Gas Facilities
shall be subject to reasonable regulations of the City consistent with authority granted the City to
manage its Public Ways and Public Grounds under state law, to the extent not inconsistent with a
specific term of this Franchise. Company shall provide field locations for its underground Gas
Facilities within the City consistent with the requirements of Minnesota Statutes, Chapter 216D.
3.2. Street Openings. Company shall not open or disturb the surface of any Public Way
or Public Ground for any purpose without first having obtained a permit from the City, if required by
a separate ordinance, for which the City may impose a reasonable fee. Permit conditions imposed on
Company shall not be more burdensome than those imposed on other public right-of-way users for
similar facilities or work. Company may, however, open and disturb the surface of any Public Way
or Public Ground without a permit if (i) an emergency exists requiring the immediate repair of Gas
Facilities and (ii) Company gives telephone, email or similar Notice to the City before commencement
of the emergency repair, if reasonably possible. Within two (2) business days after commencing the
repair, Company shall apply for any required permits and pay any required fees.
3.3. Restoration. After undertaking any work requiring the opening of any Public Way
or Public Ground, the Company shall restore the Public Ways or Public Grounds in accordance with
Minnesota Rules, part 7819.1100. Company shall restore the Public Ground to as good a condition
as formerly existed, and shall maintain the surface in good condition for one (1) year thereafter. All
work shall be completed as promptly as weather permits, and if Company shall not promptly perform
and complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground
in the said condition, the City shall have, after demand to Company to cure and the passage of a
reasonable period of time following the demand, but not to exceed five (5) days, the right to make the
restoration of the Public Ways or Public Grounds at the expense of Company. Company shall pay to
the City the cost of such work done for or performed by the City. The Company shall not be required
to post a construction performance bond.
3.4. Avoid Damage to Gas Facilities. 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. Per Minnesota Statutes § 216D.05, the City must take
protective measures when it performs work near the Gas Facilities.
3.5. Notice of Improvements to Streets. The City will give Company reasonable written
Notice of plans for improvements to Public Ways and Public Grounds where the City has reason to
DOCSOPEN\HP145\106\908429.v1-10/12/23
believe that Gas Facilities may affect or be affected by the improvement. The Notice will contain:
(i) the nature and character of the improvements, (ii) the Public Ways or Public Grounds upon which
the improvements are to be made, (iii) the extent of the improvements, (iv) the time when the City
will start the work, and (v) if more than one Public Way or Public Grounds is involved, the order in
which the work is to proceed. The Notice will be given to Company a minimum of eight (8) weeks
time, considering seasonal working conditions, in advance of the actual commencement of the work
to permit Company to make any additions, alterations or repairs to its Gas Facilities Company deems
necessary.
3.6 Mapping Information. If requested by City, Company must promptly provide
complete and accurate mapping information for any of its Gas Facilities in accordance with the
requirements of Minnesota Rules, parts 7819.4000 and 7819.4100.
SECTION 4. RELOCATIONS
4.1. Relocation in Public Ways. If the City orders Company to relocate its Gas Facilities
in a Public Way for a City improvement project including changes to the Public Way, or construction
or reconstruction of any City Utility System in the Public Way, the Company and City shall comply
with the provisions of Minnesota Rules, part 7819.3100 with respect to the Company’s relocation of
Gas Facilities.
4.2 Relocation in Public Grounds. City may require Company at Company’s expense
to relocate or remove its Gas Facilities from Public Grounds upon a finding by City that the Gas
Facilities have become or will become a substantial impairment to the existing or proposed public use
of the Public Grounds. Nothing in this Section 4.2 shall be construed so as to invalidate or impair any
existing company easements in Public Grounds.
4.3. Projects with Federal Funding. Relocation, removal or rearrangement of any
Company Gas Facilities made necessary because of the extension into or through City of a federally
aided highway project shall be governed by the provisions of Minnesota Statutes §§ 161.45 and
161.46.
SECTION 5. INDEMNIFICATION
5.1. Indemnity of City. Company shall indemnify and hold the City harmless from any
and all liability, on account of injury to 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 Ways and Public Grounds. The City shall not be indemnified for losses or claims
occasioned through its own negligence or otherwise wrongful act or omission 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 or work.
5.2. Defense of City. In the event a suit is brought against the City under circumstances
where this agreement to indemnify applies, Company at its sole cost and expense shall defend the
City in such suit if written Notice thereof is promptly given to Company within a period wherein
Company is not prejudiced by lack of such Notice. If Company is required to indemnify and defend,
DOCSOPEN\HP145\106\908429.v1-10/12/23
it will thereafter have control of such litigation, but Company may not settle such litigation without
the consent of the City, which consent shall not be unreasonably withheld. This section is not, as to
third parties, a waiver of any defense or immunity otherwise available to the City. The Company, in
defending any action on behalf of the City, shall be entitled to assert in any action every defense or
immunity that the City could assert in its own behalf. This Franchise agreement shall not be
interpreted to constitute a waiver by the City of any of its defenses of immunity or limitations on
liability under Minnesota Statutes, Chapter 466.
SECTION 6. VACATION OF PUBLIC WAYS AND PUBLIC GROUNDS
The City shall give Company at least two (2) weeks’ prior written Notice of a proposed
vacation of a Public Ways or Public Grounds. The City and the Company shall comply with
Minnesota Rules, parts 7819.3100 and 7819.3200 with respect to any request for vacation.
SECTION 7. CHANGE IN FORM OF GOVERNMENT
Any change in the form of government of the 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 of the City provided in this Ordinance.
SECTION 8. FRANCHISE FEE
8.1. Form. During the term of the franchise hereby granted, the City shall require the
Company to pay a franchise fee. The franchise fee will be collected in a manner that is legally
acceptable to the Company. The amount of the fee collected may differ for each customer class. The
City will use a formula that provides a stable and predictable amount of fees, without placing the
Company at a competitive disadvantage. Such fee shall not exceed any amount that the Company
may legally charge to its customers prior to payment to the City and be consistent with the Minnesota
Public Utility Commission’s March 23, 2011, Order establishing franchise fee filing requirements
in Docket No. E,G999/CI-09-970. If the Company claims that the City required fee formula is
discriminatory or otherwise places the Company at a competitive disadvantage, the Company will
provide a formula that will produce a substantially similar fee amount to the City.
8.2. Separate Ordinance. Any modification to the franchise fee and fee schedule
contained in Ordinance No. 2023-1200, enacted in accordance with Minnesota Statutes §§ 216B.36
and 301B.01, shall be imposed by separate ordinance duly adopted by the City Council. The effective
date of any such franchise fee ordinance shall be no less than ninety (90) days after written Notice
enclosing a copy of the duly adopted and approved ordinance has been served upon the Company by
Certified mail. Section 2.5 shall constitute the sole remedy for solving disputes between Company
and City in regard to the interpretation of, or enforcement of, the separate ordinance.
8.3. 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 energy within the City by any other 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 an agreed-
upon franchise.
DOCSOPEN\HP145\106\908429.v1-10/12/23
8.4. 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 Notice requirements provided
above 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 and be
consistent with Minnesota Public Utility Commission’s March 23, 2011, Order establishing
franchise fee filing requirements in Docket No. E,G999/CI-09-970. Such fee is subject to
subsequent reductions to account for uncollectibles and customer refunds incurred by the Company.
The Company shall not be responsible to pay City fees that Company is unable to collect under
Commission rules or order. Company agrees to make available for inspection by City at reasonable
times all records necessary to audit Company’s determination of the franchise fee payments.
8.5. Continuation of Franchise Fee. If this Franchise expires and the City and the
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. However, the franchise fee will not remain in effect for more than one (1) year after the
franchise expires as stated in Section 2.6 of this Franchise. If for any reason the franchise terminates,
the franchise fee will terminate at the same time.
SECTION 9. ABANDONED FACILITIES
The Company shall comply with Minnesota Rules, part 7819.3300, as it may be amended
from time to time with respect to abandoned facilities in Public Ways. The Company shall
maintain records describing the location of all abandoned and retired Gas Facilities within the
Public Ways and Public Grounds, produce such records at the City’s request and comply with the
location requirements of Minnesota Statutes § 216D.04 with respect to all Gas Facilities located
in Public Ways and Public Grounds.
SECTION 10. PROVISIONS OF ORDINANCE
10.1. Severability. Every section, provision or part of this Ordinance is declared separate
from every other section, provision or part; and if any section, provision or part shall be held
invalid, it shall not affect any other section, provision or part. Where a provision of any other City
ordinance is inconsistent with the provisions of this Ordinance, the provisions of this Ordinance
shall prevail.
10.2. Limitation on Applicability. This Ordinance constitutes a franchise between City
and Company as the only parties. No provisions herein shall in any way inure 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 this Ordinance or of any one or more of the terms hereof, or otherwise give rise to
any cause of action in any person not a party hereto.
SECTION 11. AMENDMENT PROCEDURE
Either party may propose at any time that this Franchise Ordinance be amended. Franchise
Ordinance may be amended at any time by the City passing a subsequent ordinance declaring the
provisions of the amendment, which amendatory ordinance shall become effective upon the filing of
DOCSOPEN\HP145\106\908429.v1-10/12/23
Company’s written consent thereto with the City Clerk within ninety (90) days after the effective date
of the amendatory ordinance.
First Reading: December 5, 2023
Second Reading: December 19, 2023
Date of Publication: December 28, 2023
Date Ordinance Takes Effect: January 1, 2024
______________________________________
Patrick Hanlon, Mayor
AYES:
NAYS:
Attest:
______________________________________
Amy Domeier, City Clerk