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HomeMy WebLinkAbout[06] CenterPoint Energy Franchise Ordinance Amendment Council Agenda Item 6 MEETING DATE: February 3, 2020 AGENDA ITEM: CenterPoint Energy Franchise Agreement SUBMITTED BY: Administration/City Attorney BOARD/COMMISSION/COMMITTEE RECOMMENDATION: PREVIOUS COUNCIL ACTION: Council adopted Ordinance 2020-01 establishing the franchise agreement for CenterPoint Energy. BACKGROUND INFORMATION: After the Ordinance was adopted, additional changes were needed. Ordinance 2020-03 would repeal and replace Ordinance 2020-01. The amendments include giving CenterPoint 90 days to begin collecting the fees as opposed to 60 days. The language regarding the expiration of the agreement was updated as well. In March, the Council will adopt the Ordinance implementing the fees. BUDGET/FISCAL IMPACT: ATTACHMENTS: Ordinance 2020-03 Repealing and Replacing Ordinance 2020-01 Adopting CenterPoint Gas Franchise Agreement. Ordinance 2020-03 Approving Summary Publication REQUESTED COUNCIL ACTION: Motion 1: Approve Ordinance 2020-03 Repealing and Replacing Ordinance 2020-01 Adopting CenterPoint Gas Franchise Agreement. Motion 2: Approve Ordinance 2020-03 Summary Ordinance (Supermajority Required). ORDINANCE NO. 2020-03 AN ORDINANCE REPEALING AND REPLACING ORDINANCE 2020-01 GAS FRANCHISE CITY OF ST. JOSEPH, STEARNS COUNTY, MINNESOTA AN ORDINANCE GRANTING TO CENTERPOINT ENERGY RESOURCES CORP., d/b/a CENTERPOINT ENERGY MINNESOTA GAS (“CENTERPOINT ENERGY”), ITS SUCCESSORS AND ASSIGNS, PERMISSION TO ERECT A GAS DISTRIBUTION SYSTEM FOR THE PURPOSES OF CONSTRUCTING, OPERATING, REPAIRING AND MAINTAINING IN THE CITY OF ST. JOSEPH, MINNESOTA, THE NECESSARY GAS PIPES, MAINS AND APPURTENANCES FOR THE TRANSMISSION OR DISTRIBUTION OF GAS TO THE CITY AND ITS INHABITANTS AND OTHERS AND TRANSMITTING GAS INTO AND THROUGH THE CITY AND TO USE THE PUBLIC WAYS AND PUBLIC GROUNDS OF THE CITY FOR SUCH PURPOSES. THE CITY COUNCIL OF THE CITY OF ST. JOSEPH, STEARNS COUNTY, MINNESOTA, ORDAINS: SECTION 1. Definitions Subd. 1. “City” means the City of St. Joseph, County of Steams, State of Minnesota. Subd. 2. “City Utility System” means the facilities used for providing non-energy related public utility service owned or operated by City or agency thereof, including sewer and water service, but excluding facilities for providing heating, lighting or other forms of energy. Subd. 3. “Commission” means the Minnesota Public Utilities Commission, or any successor agency or agencies, including an agency of the federal government which preempts all of part of the authority to regulate gas retail rates now vested in the Minnesota Public Utilities Commission. Subd. 4. “Company” means CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Minnesota Gas (“CenterPoint Energy”) its successors and assigns. Subd. 5. “Gas” as used herein shall be held to include natural gas, manufactured gas, or other form of gaseous energy. Subd. 6. “Notice” means a written notice served by one party on the other party referencing one or more provisions of this Ordinance. 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 of St. Joseph, 75 Callaway St E, St. Joseph, MN 56374. Either party may change its respective address for the purpose of this Ordinance by written Notice to the other party. Subd. 7. “Public Ground” means land owned by the City for park, open space or similar purpose, which is held for use in common by the public. Subd. 8. “Public Way” means any street, alley, walkway or other public right-of-way within the City. SECTION 2. Grant of Franchise City hereby grants Company, for a period of 20 years from the date passed and approved by the City, the non-exclusive right and privilege of erecting a gas distribution system and using the Public Ways and Public Grounds of City for the purpose of constructing, operating, repairing, and maintaining in, on, over, under and across the same, all gas pipes, mains and appurtenances usually, conveniently, or necessarily used in connection therewith, for the purpose of the transmission of gas, or the distribution of gas, for public and private use within and through the limits of City as its boundaries exist or as they may be extended in the future. Company may also do all reasonable things necessary or customary to accomplish these purposes, subject, however, to the further provisions of this franchise agreement. SECTION 3. Restrictions Subd. 1. All gas pipes, mains, regulators, and other property and facilities shall be located and constructed so as not to interfere with the safety and convenience of ordinary travel along and over said Public Ways and so as to not disrupt normal operation of City Utility System previously installed therein. Company's construction, operation, repair, maintenance and location of such facilities shall be subject to permits if required by separate ordinance and to other reasonable regulations of the City to the extent not inconsistent with the terms of this franchise agreement. Company may abandon underground gas facilities in place, provided, at City's request, Company will remove abandoned metal pipe interfering with a City improvement project, but only to the extent such metal pipe is uncovered by excavation as part of the City improvement project. Subd. 2. Company shall not construct any new or modified installations within or upon any Public Grounds without receiving the prior written consent of an authorized representative of City for each such new installation. Subd. 3. In constructing, removing, replacing, repairing, or maintaining said gas pipes, mains and appurtenances, Company shall, in all cases, place the Public Ways in, on, under or across which the same are located in as good condition as they were prior to said operation and maintain any restored paved surface in such condition for two years thereafter. City hereby waives any requirement for Company to post a construction performance bond, certificate of insurance, letter of credit or any other form of security or assurance that may be required, under a separate existing or future ordinance of the City, of a person or entity obtaining the City's permission to install, replace or maintain facilities in a Public Way. SECTION 4. Tree Trimming Company is also granted the permission and authority to trim all trees, including roots and shrubs in the Public Ways of City to the extent Company finds necessary to avoid interference with the proper construction, operation, repair and maintenance of gas facilities, provided that Company shall save City harmless from any liability in the premises. SECTION 5. Service and Rates The service to be provided and the rates to be charged by Company for gas service in City are subject to the jurisdiction of the Public Utilities Commission of this State or its successor agency. SECTION 6. Relocating Subd.1. Whenever City at its cost shall grade, regrade, or change the line of any Public Way, or construct or reconstruct any City Utility System therein and shall, in the proper exercise of its police power, and with due regard to seasonable working conditions, when necessary, and after approval of its final plans have been obtained, order Company to relocate permanently its mains, services, and other property located in said Public Way materially interfering with the City's planned construction, Company shall relocate its facilities at its own expense. City shall give Company reasonable notice of plans to grade, regrade or change the line of any Public Way or to construct or reconstruct any City Utility System therein. However, after Company has so relocated, if a subsequent relocation or relocations shall be ordered within five (5) years from and after first relocation, City shall reimburse Company for such non-betterment relocation expense which Company may incur on a time and material basis; provided, if subsequent relocations are requested because company facilities materially and necessarily interfere with the extension of a City Utility System to previously unserved areas, Company may be required to relocate at its own expense. Subd. 2. Nothing contained in this franchise shall require Company to relocate, remove, replace or reconstruct at its own expense its facilities where such relocation, removal, replacement or reconstruction is solely for the convenience of the City and is not reasonably necessary for the construction or reconstruction of a Public Way or City Utility System or other City improvement. Subd. 3. Any relocation, removal, or rearrangement of any Company 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 Section 161.46 as supplemented or amended; and further, it is expressly understood that the right herein granted to Company is a valuable property right and City shall not order Company to remove or relocate its facilities without compensation when a Public Way is vacated, improved or realigned because of a renewal or a redevelopment plan which is financially subsidized in whole or in part by the Federal Government or any agency thereof, unless the reasonable non-betterment costs of such a relocation and the loss and expense resulting therefrom are first paid to Company. Subd. 4. The provisions of this franchise shall not be construed to waive or modify any rights obtained by Company for installations within a Company right-of-way acquired by easement or prescriptive right before the applicable Public Way or Public Ground was established, or Company's rights under state or county permit. SECTION 7. Indemnification Subd.1. Company shall indemnify, keep and hold the City free and 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 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. The City shall not be indemnified if the injury or damage results from the performance in a proper manner of acts reasonably deemed hazardous by Company, and such performance is nevertheless ordered or directed by City after notice of Company's determination. Subd. 2. 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, it will therefore 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; and 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. SECTION 8. Vacation of Public Ways The City shall give Company at least two weeks prior written notice of a proposed vacation of a Public Way. Except where required solely for a City improvement project, the vacation of any Public Way, after the installation of gas facilities, shall not operate to deprive Company of its rights to operate and maintain such gas facilities, until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to Company. In no case, however, shall the City be liable to pay damages to Company for failure to specifically preserve a right-of-way under Minnesota Statutes, Section 160.29. SECTION 9. FRANCHISE FEE. Subd. 1. Fee Schedule. During the term of the franchise hereby granted, and in lieu of any permit or other fees being imposed on the Company, the City may impose on the Company a franchise fee by collecting the amounts indicated in a Fee Schedule set forth in a separate ordinance from each customer in the designated Company Customer Class. 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. Subd. 2. Separate Ordinance. The franchise fee shall be imposed by a separate ordinance duly adopted by the City Council, which ordinance shall not be adopted until at least 30 days after written notice enclosing such proposed ordinance has been served upon Company. The fee shall not become effective until the beginning of a Company billing month at least 90 days after written notice enclosing such adopted ordinance has been served upon Company by certified mail. Section 11, Subdivision 2 shall constitute the sole remedy for solving disputes between Company and the City in regard to the interpretation of, or enforcement of, the separate ordinance. Subd. 3. Terms Defined. Subd. 3.1. “Class” shall refer to classes listed in the Fee Schedule and as defined or determined in Company's gas rate book on file with the Commission. Subd. 3.2. “Fee Schedule” refers to the Schedule in Section 9.1 setting forth the various customer classes from which a franchise fee would be collected if a separate ordinance were implemented immediately after the effective date of this franchise agreement. The Fee Schedule in the separate ordinance may include new Customer Classes added by the Company to its gas tariffs after the effective date of this franchise agreement. Subd. 3.3. “Therm” shall be a unit of gas providing 100,000 Btu of heat content adjusted for billing purposes under the rate schedules of Company on file with the Commission. Subd. 4. Collection of the Fee. The franchise fee shall be payable quarterly and shall be based on the amount collected by Company during complete billing months during the period for which payment is to be made by imposing a surcharge equal to the designated franchise fee for the applicable customer classification in all customer billings for gas service in each class. The payment shall be due the last business day of the month following the period for which the payment is made. The franchise fee may be changed by ordinance from time to time; however, each change shall meet the same Notice requirements as in Subdivision 2 above, and not occur more often than annually. The payment shall be due the last business day of the month following the period for which the payment is made. The time and manner of collecting the franchise fee is subject to the approval of the Commission. No franchise fee shall be payable by Company if Company is legally unable to first collect an amount equal to the franchise fee from its customers in each applicable class of customers by imposing a surcharge in Company's applicable rates for gas service. Company may pay the City the fee based upon the surcharge billed subject to subsequent reductions to account for uncollectibles, refunds and correction of erroneous billings. Company agrees to make its records available for inspection by the City at reasonable times provided that the City and its designated representative agree in writing not to disclose any information which would indicate the amount paid by any identifiable customer or customers or any other information regarding identified customers. In addition, the Company agrees to provide at the time of each payment a statement summarizing how the franchise fee payment was determined, including information showing any adjustments to the total surcharge billed in the period for which the payment is being made to account for any uncollectibles, refunds or error corrections. Subd. 5. Equivalent Fee Requirement. The separate ordinance imposing the fee shall not be effective against Company unless it lawfully imposes and the City monthly or more often collects a fee or tax of the same or greater equivalent amount on the receipts from sales of energy within the City by any other energy supplier, provided that, as to such a supplier, the City has the authority to require a Franchise fee or to impose a tax. The “same or greater equivalent amount” shall be measured, if practicable, by comparing amounts collected as a franchise fee from each similar customer, or by comparing, as to similar customers the percentage of the annual bill represented by the amount collected for franchise fee purposes. The franchise fee or tax shall be applicable to energy sales for any energy use related to heating, cooling or lighting, or to run machinery and appliances, but shall not apply to energy sales for the purpose of providing fuel for vehicles. If the Company specifically consents in writing to a franchise or separate ordinance collecting or failing to collect a fee from another energy supplier in contravention of this Subdivision 5, the foregoing conditions will be waived to the extent of such written consent. Subd. 6. Continuation of Franchise Fees. 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 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 year after the franchise fee expires. If for any reason the franchise terminates, the franchise fee will terminate at the same time. SECTION 10. Written Acceptance Company shall, if it accepts this Ordinance and the rights and obligations hereby granted, file a written acceptance of the rights hereby granted with the City Clerk within sixty (60) days after the final passage and any required publication of this Ordinance. SECTION 11. General Provisions Subd. 1. 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 conflicts with the provisions of this Ordinance, the provisions of this Ordinance shall prevail. Subd. 2. 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 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 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 for breach of contract, or either party may take any other action permitted by law. Subd. 3. This Ordinance constitutes a franchise agreement between the City and Company as the only parties and no provision of this franchise 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 the agreement 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. Subd. 4. 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. Subd. 5. Nothing in this Ordinance relieves any person from liability arising out of the failure to exercise reasonable care to avoid damaging Company's facilities while performing any activity. SECTION 12. Publication Expense The expense of any publication of this franchise Ordinance required by law shall be paid by Company. SECTION 13. Effective Date This Ordinance is effective as provided by statute or charter and upon acceptance by Company as provided in Section 10. SECTION 14. Previous Franchise Superseded. This franchise supersedes and replaces previous franchises granted to the Company or its predecessors. Upon Company acceptance of this franchise under Section 10, the previous franchise shall terminate. Passed and approved: , 2020. CITY OF ST. JOSEPH By Rick Schultz, Mayor By Kris Ambuehl, Administrator ORDINANCE NO. 2020-03 AN ORDINACE REPEALING AND REPLACING ORDINANCE 2020-01 ADOPTING GAS FRANCHISE FOR CENTERPOINT ENERGY RESOURCES CORP., d/b/a CENTERPOINT ENERGY MINNESOTA GAS SUMMARY PUBLICATION The following official summary of the ordinance referred to has been approved by the City Council of St. Joseph as clearly informing the public of the intent and effect of the ordinance. AN ORDINANCE GRANTING TO CENTERPOINT ENERGY RESOURCES CORP., d/b/a CENTERPOINT ENERGY MINNESOTA GAS (“CENTERPOINT ENERGY”), ITS SUCCESSORS AND ASSIGNS, PERMISSION TO ERECT A GAS DISTRIBUTION SYSTEM FOR THE PURPOSES OF CONSTRUCTING, OPERATING, REPAIRING AND MAINTAINING IN THE CITY OF ST. JOSEPH, MINNESOTA, THE NECESSARY GAS PIPES, MAINS AND APPURTENANCES FOR THE TRANSMISSION OR DISTRIBUTION OF GAS TO THE CITY AND ITS INHABITANTS AND OTHERS AND TRANSMITTING GAS INTO AND THROUGH THE CITY AND TO USE THE PUBLIC WAYS AND PUBLIC GROUNDS OF THE CITY FOR SUCH PURPOSES. The franchise agreement defines certain terms relating to the gas franchise, describes the restrictions, tree- trimming regulations, relocation procedures, vacation of public right-of-way procedures and general requirements of the ordinance, provides an indemnification clause, prescribes the service and franchise fees, and outlines the procedure of collecting the fees. A printed copy of the entire ordinance is available for inspection by any person at the office of City Clerk, Monday through Friday between the hours of 8:00 a.m. and 4:30 p.m. or on the City’s website at www.cityofstjoseph.com. This document hereby is made a part of this ordinance and is attached hereto. Rick Schultz, Mayor ATTEST: Kris Ambuehl, Administrator SEAL PUBLISHED IN THE ST. CLOUD TIMES ON , 2019.