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11-F-01 - Centerpoint Energy (Gas franchise)ORDINANCE NO. 11-F-O1 AN ORDINANCE GRANTING TO CENTERPOINT ENERGY RESOURCES CORP., DBA CENTERPOINT ENERGY TEXAS GAS OPERATIONS, THE NON- EXCLUSIVE RIGHT, PRIVILEGE AND FRANCHISE TO CONSTRUCT, INSTALL, EXTEND, REMOVE, REPLACE, ABANDON, OPERATE, AND MAINTAIN ITS FACILITIES WITHIN THE PUBLIC RIGHTS-OF-WAY OF THE CITY OF SCHERTZ, TEXAS FOR THE TRANSPORTATION, DELIVERY, SALE, AND DISTRIBUTION OF NATURAL GAS; CONTAINING OTHER PROVISIONS RELATING TO THE FOREGOING SUBJECT; PROVIDING FOR SEVERABILITY AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the non-exclusive franchise described herein is granted pursuant to Section 4.09(e)(1) and Article XI of the City Charter of the City of Schertz, Texas; now therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS: Section 1. Grant of Authority. Subject to the terms, conditions, and provisions of this Ordinance, the non-exclusive right, privilege, and franchise is hereby granted to CenterPoint Energy Resources Corp., DBA CenterPoint Energy Texas Gas Operations (the "Franchise"), to construct, install, extend, remove, replace, abandon, operate, and maintain its facilities within the Public Rights-of--Way of the City of Schertz, Texas (the "City") for the tr~ausportation, delivery, sale, and distribution of natural gas within the corporate limits of the City, as the same are now and as the same may from time to time be extended during the term hereof. Section 2. Definitions. A. "City" shall mean the City of Schertz, Texas. B. "Facilities" shall mean pipes, pipelines, natural gas mains, laterals, feeders, regulators, meters, fixtures, connections, and attachments and other instrumentalities and appurtenances, used in or incident to providing transportation, distribution, supply, and sale of natural gas for heating, lighting, power, and any other purposes for which natural gas may now or hereafter be used. C. "Franchise" shall mean the non-exclusive fianchise granted pursuant to this Ordinance. D. "Franchisee" shall mean CenterPoint Energy Resources Corp., DBA CenterPoint Energy Texas Gas Operations, a Delaware Corporation, and shall not mean any of its affiliates and/or subsidiaries who shall have no right, privilege, or fianchise granted hereunder. E. "Public Rights-of--Way" shall mean the areas in, under, upon, over, across, and along any and all of the present and future Streets or streams and adjacent related City rights-of--way now or hereafter owned or controlled by the City. F. "Street" shall mean the surface and the space above and below any public street, road, highway, alley, bridge, sidewalk, or other public place or way. 503604232 Section 3. Term of Franchise. This Franchise shall become effective on the Effective Date described in Section 22 and shall be in full force and effect for a term of thirty (30) years. Section 4. Construction and Maintenance of Natural Gas Distribution System. All Facilities installed by the Franchisee shall be of sound material and good quality, and shall be laid so that they will not interfere (except in the event of an emergency) with the natural or artificial drainage of the City or its underground fixtures, or with navigation in or the natural drainage of any stream, except as expressly agreed in writing by the City. All Facilities shall be installed in accordance with applicable Federal, State, and City regulations and in the absence of such regulations in accordance with accepted industry practice. Within the Public Rights-of--Way, the location and route of the Facilities by the Franchisee shall be subject to the reasonable and proper regulation, direction, and control of the City or the City official to whom such duties have been delegated. Such regulation shall include, but not be limited to, the right to require in writing to the extent provided in Section 13 the relocation of the Franchisee's Facilities at the Franchisee's cost within the Public Rights-of--Way of the City whenever such relocation shall be reasonably necessary as determined by the City to accommodate the widening, change of grade, straightening, or relocation by the City of Sheets or Public Rights-of--Way, or construction or relocation by the City of City utility lines or drainage facilities. The Franchisee and the City shall work together to develop a procedure under which the Franchisee shall make available to the City maps showing the location of Franchisee's Facilities within the corporate limits of the City as in place from time to time. Section 5. Streets to be Restored to Good Condition. The Franchisee and its contractors shall give the City reasonable notice of the dates, location, and nature of all work to be performed on its Facilities within the Public Rights-of--Way. This Franchise shall constihite a permit to perform all work on Franchisee's Facilities within the Public Rights-of--Way and to park vehicles in the Streets and other Public Rights-of- Way when necessary for the installation, replacement, abandonment, operation or maintenance of Franchisee's Facilities; provided, the Franchisee shall provide the City with sufficient information of work proposed to be undertaken and shall in all events comply with City rules and regulations regarding street cuts and borings, excluding. any applicable City fees with respect thereto. The Franchisee and its contractors performing work for the Franchisee shall not be required to obtahi any permits in addition to this Franchise or to pay any fee in addition to the franchise fee described in Section 7 in order to perform work on the Franchisee's Facilities, or to park within the Streets and other Public Rights-of--Way; provided, the Franchisee must coordinate with the City in advance (except in the event of an emergency) all proposed full or partial closure of any Streets. Following completion of work in the Public Rights-of--Way, the Franchisee shall repair the affected Public Rights-of--Way as soon as possible and to the extent reasonably possible to its condition prior to such work or better, but in all cases the Franchisee shall comply with all City ordinances governing time periods and standards relating to excavating in the Public Rights-of--Way. No street, alley, highway, or public place shall be encumbered for a longer period than shall be necessary to execute the work. Section 6. Quality of Service. The service furnished hereunder to the City and its inhabitants shall be in accordance with the quality of service rules of the Railroad Commission of Texas and all other applicable local, state, and federal regulations. The Franchisee shall furnish the grade of service to its customers as provided by its rate schedules and shall maintain its system in reasonable operating condition during the continuance of this Franchise. An exception to this requirement is automatically in effect, but only for• so long as is necessary, when caused by a shortage in materials, supplies, and equipment beyond the control of the Franchisee as a result of fires, strikes, riots, storms, 50360423.2 -2- floods, and other casualties, governmental regulations, limitations, and restrictions as to the use and availability of materials, supplies, and equipment and as to the use of the services, and unforeseeable and unusual demands for service. In any of such events, the Franchisee shall do all things reasonably within its power to restore normal quality service as quickly as practicable. Section 7. Payment to the City. In consideration of the rights and privileges herein granted, the administration of the Franchise by the City, the temporary interference with the use of Public Rights- of-Way, the cost and obligations undertaken by the City in relation thereto, and in lieu of any license, charge, fee, sheet, or alley rental or other character of charge for use and occupancy of the Streets, alleys, and public places of the City, and in lieu of any inspection fee, the Franchisee agrees to pay to the City franchise fees in the amount and manner described herein. The Franchisee agrees to pay to the City quarterly during the continuance of this Franchise a sum of money equal to five percent (Sb/o) of the Franchisee's gross receipts for the preceding calendar quarter received by the Franchisee from the sale of gas within the corporate limits of the City plus seven cents (7~) per Mcf for natural gas transported by the Franchisee for its Transport Customers during such quarter. "Transport Customer" means any person or entity for whom the Franchisee transports gas though the distribution system of the Franchisee within the corporate limits of the City for consumption witlrin the corporate limits of the City. The franchise fees hereunder shall be calculated for the calendar quarters ending March 31, June 30, September 3Q, and December 31 and shall be payable on or before the fifteenth day of May, August, November, and February following the quarter for which payment is made, beginning with the first such date following the Effective Date of this Franchise and each August 15th, November 15th, February 15th, and May 15th thereafter; provided, however, the first such payment shall be prorated as necessary to reflect only those gross receipts received and transportation volumes delivered by the Franchisee after the Effective Date of this Franchise. Payments due to the City prior to the Effective Date shall be governed by the Franchisee's prior franchise agreement with the City. In no event shall the Franchisee be required to remit to the City franchise fee amounts that for any reason whatsoever are not fully recoverable from its customers. Upon receipt of the above amount of money, the City Secretary shall deliver to the Franchisee a receipt for such amount. If any payment due date required herein falls on a weekend or bank holiday, payment shall be made on or before the close of business of the first working day after the payment due date. Section 8. Annexations by City. This Franchise shall extend to and include any and all territory that is annexed by the City during the term of this Franchise. Within sixty (60) days after the receipt of notice from the City of any such annexation, the Franchisee shall assure that any and all customers within such annexed territory are included in and shown on its accounting system as being within the corporate limits of the City. After such sixty (60) day period, the payment provisions specified in Section 7 of this Franchise shall apply to gross receipts and transport fees received by the Franchisee from customers located within such annexed territory. The Franchisee shall true-up its map of the City boundaries to the City's map on an annual basis. Section 9. Non-Exclusive rranchise. Nothing contained in this Franchise shall ever be construed as conferring upon the Franchisee any exclusive rights or privileges of any nature whatsoever. 50360423.2 -3- Section 10. Compliance and Remedies (a) In the event the Franchisee by act or omission violates any material term, condition, or provision of this Franchise, the City shall notify the Franchisee in writing of such violation. Should the Franchisee fail or refuse to correct any such violation within thirty (30) days after the date of the City's notice, the City shall, upon written notification to the Franchisee, have the right to terminate this Franchise. Any such termination and cancellation shall be by ordinance adopted by the City Council; provided, however, before any such ordinance is adopted, the Franchisee must be given at least sixty (60) days' advance written notice. Such notice shall set forth the causes and reasons for the proposed termination and cancellation, shall advise the Franchisee that it will be provided an opportunity to be heard by the City Council regarding such proposed action before any such action is taken, and shall set forth the time, date, and place of the hearing. (b) Other than its failure, refusal, or inability to pay its debts and obligations, including, specifically, the payments to the City required by this Franchise, the Franchisee shall not be declared in default or be subject to any sanction under any provision of this Franchise in those cases in which performance of such provision is prevented by reasons beyond its control. (c) The rights and remedies of the City and the Franchisee set forth herein shall be in addition to, and not in limitation of, any other rights and remedies provided at law or in equity, and the City's exercise of any particular remedy shall not constitute a waiver of its rights to exercise any other remedy. Sectimr 11. Reservation of Powers. Except as otherwise provided in this Franchise, the City by the granting of this Franchise does not surrender or to any extent lose, waive, impair, or lessen the lawful powers, claims, and rights now or hereafter vested in the City under the Constitution and statutes of the State of Texas and under the Charter and Ordinances of the City or other applicable law, to regulate public utilities within the City and to regulate the use of the Streets by the Franchisee; and the Franchisee by its acceptance of this Franchise agrees that, except as otherwise provided in this Franchise, all lawful powers and rights, whether regulatory or otherwise, as are or as may be fiom time to time vested in or reserved to the City, shall be in full force and effect and subject to the exercise thereof by the City at any time and from time to time. Section 12. Illdelnnity. THE FRANCHISEE, ITS SUCCESSORS AND ASSIGNS, SHALL PROTECT AND HOLD THE CITY AND ITS OFFICERS, AGENTS, AND En4PLOYEES (COLLECTIVELY REFERRED TO IN THIS SECTION AS "THE CITY") HARMLESS AGAINST ANY AND ALL CLAIMS OR DEMANDS I'OR DAMAGES TO ?uNY PERSON OR PROPERTY BY REASON OI' THE CONSTRUCTION, MAINTENANCE, AND OPERATION OF THE FRANCHISEE'S NATURAL GAS DISTRIBUTION SYSTEM, OR IN ANY WAY GROWING OUT OF THE RIGHTS GRANTED BY THIS FRANCHISE, EITHER DIRECTLY OR INDIRECTLY, OR BY REASON OF ANY ACT, NEGLIGENCE, OR NONFEASANCE OF THE FRANCHISEE OR THE CONTRACTORS, AGENTS, OR E~H'LOYEES OF THE FRANCHISEE OR ITS SUCCESSORS AND ASSIGNS, AND SHALL REFUND TO THE CITY ALL SUMS WHICH THE CITY MAYBE ADJUDGED TO PAY ON ANY SUCH CLAIM, OR WHICH MAY ARISE OR GROW OUT OF THE EXERCISE OF THE RIGHTS AND PRIVILEGES HEREBY GRANTED OR BY THE ABUSE THEREOF, AND THE FRANCHISEE OR ITS SUCCESSORS AND ASSIGNS SHALL INDEMNIFY AND HOLD THE CITY HARMLESS FROM AND ON ACCOUNT OF ALL DAMAGES, COSTS, EXPENSES, ACTIONS, AND CAUSES OF ACTION THAT DIAY ACCRUE TO OR BE BROUGHT BY, A PERSON, PERSONS, COMPANY, OR COMPANIES 50360423.2 -4- AT ANY TIME HEREAFTER BY REASON OF THE EXERCISE OI' THE RIGHTS AND PRIVILEGES HEREBY GRAA'TED, OR OF THE ABUSE THEREOF. Section 13. Relocation of Facilities. The Franchisee shall, upon written request of the City, relocate its Facilities within Public Rights-of--Way at the Franchisee's own expense, exclusive of Facilities installed for service directly to the City, whenever such shall be reasonably necessary on account of the widening, change of grade, straightening, or relocation by the City of Sheets or Public Rights-of--Way, or construction or relocation by the City of City utility lines or drainage facilities. The City shall bear the costs of all relocations of Facilities installed for service directly to the City and of any relocation of other Facilities requested by the City for reasons other than the widening, change of grade, straightening, or relocation by the City of Sheets or Public Rights-of--Way, or construction or relocation by the City of City utility lines or drainage facilities. Sectimr 14. Governmental Function. All of the regulations and activities required by this Franchise are hereby declared to be governmental and for the health, safety, and welfare of the general public. Section 15. Records and Reports. (a) Books of Account. The Franchisee shall keep complete and accurate books of accounts and records of its business and operations under and in connection with this Franchise. All such books of accounts and records shall be kept at the Franchisee's principal office in Houston, Texas. (b) Access by City. The City may conduct an audit or other inquiry or may pursue a cause of action in relation to the payment of the franchise fee only if such audit, inquiry, or pursuit of a cause of action concerns a payment made less than tluee (3) years before the commencement of such audit, inquiry, or pursuit of a cause of action. Each party shall bear its own costs of any such audit or inquiry. Upon receipt of a written request from the City, all books and records related to the Franchisee's operations under this Franchise shall be made available for inspection and copying no later than thirty (30) days from receipt of such request. (c) Interest on Undeppayments and Overpayments. Amounts due to the City for late payments shall include interest, compounded daily equal to the return on equity plus tluee percent (3%) granted to the Franchisee in its most recent proceeding fixing rates applicable to customers within the corporate limits of the City. If the City identifies, as a result of a franchise fee compliance review, amounts owed by the Franchisee fiom prior periods or prior underpayments, then the Franchisee shall pay simple interest on such amounts equal to the return on equity granted to the Franchisee in its most recent proceeding fixing rates applicable to customers within the corporate limits of the City. Said interest shall be payable on such sums fiom the date the initial payment was due until it is paid and shall not be billed to customers. Amounts due the Franchisee for past overpayments shall not be off set against amounts due to the City by the Franchisee without the City's written consent. Amounts so due to the Franchisee shall include simple interest equal to the return on equity granted to the Franchisee in its most recent proceeding fixing rates applicable to customers within the corporate limits of the. City. Interest payable on such sums shall be credited to customers. 50360J23.2 -5- Section 16. l;asements. Inconsideration for the compensation set forth in Section 7, the City agrees that if the City sells, conveys, or surrenders possession of any portion of the Public Right-of--Way that is being used by the Franchisee pursuant to this Franchise, the City, to the maximum extent of its right to do so by law and not restricted by other agreement, shall first grant the Franchisee an easement for such use, and the sale, conveyance, or surreender of possession of the Public Right-of--Way shall be subject to the right and continued use of the Franchisee. Section 17. Original Jurisdiction Over Rates and Services. Pursuant to Section 103.003 of the Gas Utility Regulatory Act, the City hereby elects to surrender to the Railroad Commission of Texas the City's exclusive original jurisdiction over the Franchisee's rates, operations, and services effective as of the Effective Date of this Franchise and for the term of this Franchise. Notwithstanding the above surrender of the City's exclusive original jurisdiction over the Franchisee's rates, operations, and services, such surrender shall not affect in any manner the City's rights and privileges with respect to any other franchisee or pursuant to the provisions of the Gas Utility Regulatory Act as currently enacted, or as amended, or in any successor legislation, or as otherwise provided at law for the City to both participate in any ratemalting proceeding at the Railroad Commission of Texas which affects the City's gas rates, and to recover from the Franchisee any reasonable expenses incurred by the City in its participation in such a ratemalcing proceeding as provided for in law. Section 18. Assignment. The Franchisee shall not assign its rights or obligations hereunder to any entity, including but not limited to its successors and assigns, without the prior written consent of the City. Section 19. Acceptance. The Franchisee shall, within tlrirty (30) days after the final passage and approval of this Franchise, file with the City Secretary of the City of Schertz a written statement signed in its name and behalf in the following form: "To the Honorable Mayor and City Council of the City of Schertz: CenterPoint Energy Resources Cmp., DBA CenterPoint Energy Texas Gas Operations, its successors and assigns, hereby accepts the attached Franchise Ordinance and agrees to be bound by all of its terms and provisions." CENTERPOINT ENERGY RESOURCES CORP., DBA CENTERPOINT ENERGY TEXAS GAS OPERATIONS By: ~•GG~J/~ Scott E. Doyle, Division Vice President, Regional Operations Dated this ~ day of Fes, 2011. Section 20. Severability. If any provision, section, subsection, sentence, clause, or plu~ase of this Franchise is for any reason held to be unconstitutional, void, or invalid or for any reason unenforceable, the validity of the remaining portions of this Franchise shall not be affected thereby, it being the intent the City in adopting this Franchise that no portion hereof or provision hereof shall 50360423.2 -6- become inoperative or fail by reason of any unconstitutionality or invalidity of any other portion, provision or regulation and, to this end, all provisions of this Ordinance are declared to be severable. Section 21. Notices. Every notice, order, petition, documents, or other direction or communication to be served upon the City or the Franchisee shall be deemed sufficiently given if sent by registered or certified mail, return receipt requested. Every such communication to the Franchisee shall be sent to: CenterPoint Energy Resources Corp. Vice President Regulatory Relations PO Box 4567 Houston, TX 77210-4567 With a copy to: General Counsel, Gas Division PO Box 2628 Houston, TX 77252-2628 Every such communication to the City or the City Council shall be sent to the: City Manager, City of Schertz 1400 Schertz Parkway Schertz, Texas 78154 Section 22. Publication, Passage, and Effective Date. This Franchise, having been published, shall take effect and be in force from and after the first day of the month following thirty days after receipt by the Franchisee's acceptance filed pursuant to Section 18 above (the "Effective Date"). The Franchisee shall pay the cost of those publications. Section 23. Repeal of Previous Ordinances. This Franchise replaces the franchise agreement with the Franchisee, dated October 6, 1986 granted by the City pwsuant to Ordinance No. 86-F-20 which ordinance is hereby repealed as of the Effective Date of this Franchise. Any claims of City or the Franchisee thereunder are hereby waived except as to amounts due and unpaid to the City thereunder on the Effective Date hereof. [The remainder of this page intentionally left blank] 50360423.2 -7- Read in full and passed on first reading at a regular meeting of the City Council of Schertz, Texas, on the 4`~' day of January, 2011. Read in full and passed and adopted on second reading at a regular meeting of the City Council of Schertz, Texas, on the 8`h day of February, 2011. APPROVE ayor, City of Schertz, Texas ATTEST: City Secretary, City of Schertz, Texas 50360423.2 -g- THE STATE OF TEXAS § COUNTY OF GUADALUPE § I, the duly appointed, qualified, and acting City Secretary of Schertz, Texas, hereby certify that the above and foregoing Ordinance was passed and adopted on second reading at a regular meeting of the City Council of Schertz, Texas, held on the 4`~' day of January, 2011; that written notice of the date, place, and subject of said meeting was posted on a bulletin board located at a place convenient to the public in the City Hall for at least 72 hours preceding the day of said meeting; that Mayor Hal Baldwin and the following Councilmembers: 1. Jim Fowler 2. David Scagliola 3. George Antuna 4. Cedric Edwards Sr. 5. Michael Carpenter were present at said meeting and acted as the Council tlu~oughout; that the above and foregoing Ordinance was passed and adopted on second reading at a regular meeting of the City Council of Schertz, Texas, held on the 8`h day of February, 2011; that written notice of the date, place, and subject of said meeting was posted on a bulletin board located at a place convenient to the public in the City Hall for at least 72 hours preceding the day of said meeting; that the following Councilmembers: 1. Jim Fowler 2. David Scagliola 3. George Antuna 4. Cedric Edwards Sr. 5. Michael Carpenter were present at said meeting (Mayor Hal Baldwin being absent) and acted as the Council throughout; that the same has been signed by the Mayor and is duly attested by the City Secretary; that the full text of the Ordinance was published hr the official newspaper of the City once each week for rivo consecutive weeks; 50360423.2 -9- and that the same has been duly filed with the City Secretary and recorded by the City Secretary in full in the books kept for the purpose of recording the ordinances of the City of Schertz. EXECUTED under my hand and the official seal of the seal of the City of Schertz, Texas, this the 8'h day of February 2011. [SEAL] y Secretary City of Schertz, Texas 50360423.2 -10-