1b Reliant Energy Agreement
CITY OF
CHANHASSEN
7700 Markel Boulevard
PO Box 147
Ghanhassen. MN 55317
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i1
MEMORANDUM
TO:
Mayor and City Council
Todd Gerhardt, City Manager D\~&:
FROM:
DATE:
April 30, 2002
SUBJ:
Consider Approval of Reliant Energy (Minnegasco) Franchise
Agreement
Attached you will find the proposed Franchise Ordinance for Reliant Energy
(Minnegasco). The City Attorney's office and staff have reviewed the ordinance
and have no concerns with it as drafted. This is a 20-year franchise agreement and
our previous agreement was for ten years, 1992 - 2002. This is not a huge
change; the norm for most cities is a 20-year franchise. Both Shakopee and
Minnetonka entered into 20-year agreements. The important sections of this
agreement deal with franchise fees and right-of-way. The city attorney has
advised me that the agreement includes language that gives the City flexibility in
the futurè if changes need to be made.
RECOMMENDATION
Staff recommends that the City Council approve the Franchise Agreement with
Reliant Energy (Minnegasco) as presented.
Attachment
1. Franchise Ordinance for Reliant Energy (Minnegasco).
G;\admin\tg\ReliantFranchiseAgreementMemotoCC
The City of Chanhassen . P. grcwing comm~n!ty with clean la~es, Quality schools, a charming downtown, thriving businesses, winding trails. and beaulilul parks. A great place 10 live. work, and play.
CAMPBELL KNUTSON
Professional Association
Attorneys at Law
Thomas J. Campbell .
Roger N. Knurson
Thomas M. Scott
Elliott B. Knetsch
Joel J. Jamnik
Andrea McDowell Poehler
Matthew K. Brokl*
·AhoIicCJl5('dinWí~ÌT1
(651) 452-5000
Fax (651) 452-5550
John F. Kelly
Matthew J. Fo\i
Sorcn M. Mattick
Marguerite M. McCarron
Gina M. Brandt
March 13, 2002
Mr. Todd Gerhardt
City of Chanhassen
7700 Market Boulevard
P. O. Box 147
Chanhassen, Minnesota
55317
Re: Franchise Ordinance for Reliant Energy Minnegasco
Dear Todd:
Enclosed for your review is a draft of the Franchise Ordinance for Reliant Energy
Minnegasco. For your information, we have completed negotiations with Reliant and
assuming the City staff have no concerns regarding this Ordinance, it can be presented to the
City Council for approval.
At the request of Connie Hargest at Reliant Energy, would you contact Ms. Hargest to
let her know when this matter will be on the City Council agenda for the first reading?
If you have any questions or comments regarding the enclosed Franchise Ordinance,
please contact me.
Very truly yours,
Campbell Knutson
Professional Association
By:é2~2~
¿/16eIJ. J
RECEIVED
MAR 1 5 2002
CITY OF CHANHASS
JJJ:cjh
Enclosure
cc: Ms. Connie S. Hargest
Suite 317 . Eagandale Office Center · 1380 Corpotate Center Curve · Eagan, MN 55121
FRANCWSE ORDINANCE FOR RELIANT ENERGY MINNEGASCO
ORDINANCE NO.
CITY OF CHANHASSEN, CARVER COUNTY, MINNESOTA
AN ORDINANCE GRANTING TO RELIANT ENERGY MINNEGASCO, A NATURAL GAS
UTILITY, A DIVISION OF RELIANT ENERGY RESOURCES CORPORATION, A DELA WARE
CORPORATION, ITS SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE FRANCHISE TO
CONSTRUCT, OPERA TE, 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 WAYS AND PUBLIC GROUNDS OF
THE CITY FOR SUCH PURPOSES; AND PRESCRIBING CERTAIN TERMS AND
CONDITIONS THEREOF.
THE CITY COUNCIL OF CHANHASSEN ORDAINS:
SECTION 1. DEFINITIONS. For purposes
of this Ordinance, the following capitalized
terms shall have the following meanings:
1.1. City. The City of Chanhassen, County of
Carver, State of Minnesota.
1.2. City Utility System. Facilities used for
providing public utility service owned or
operated by the City or agency thereof.
1.3. Commission. The Minnesota Public
Utilities Commission, or any successor
agency or agencies, including an agency
of the federal govemment 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 that constitute
any part or parts of the Gas Facilities
subject to this fÌ"anchise.
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.
I. 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.
1.8. Non-Betterment Costs. Costs incUfted
by the Company fÌ"om relocation, removal
or rearrangement of Gas Facilities that do
not result in an improvement to the
Facilities.
1.9. Notice. A writing served by a party or
parties on another party or parties. Notice
to Company must be mailed to:
Reliant Energy Minnegasco
V.P., Regulatory & Supply Service
800 LaSalle Avenue
Minneapolis, MN 55402
Notice to City must be mailed to:
City of Chanhassen
690 City Center Drive
Chanhassen Minnesota 55317
1.l0.Public Way. Any street, alley or other
public right-of-way within the City.
1.11. Public Ground. Land owned or
otherwise controlled by the City for
parks, open space or other public
purposes.
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 construct,
operate, repair and maintain Gas Facilities
in, on, over, under and across the Public
Way and Public Ground subject to the
provisions ofthis ordinance. The
Company may do all things reasonably
necessary or customary to accomplish
these purposes, subject to other applicable
ordinances, permit requirements and to
further provisions of this ordinance.
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.
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 Default: 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 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 after service of the notice, the
parties may jointly 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.
2.7 Continuation of Franchise. If this
franchise expires and the City and the
Company are unable to agree on the terms
of a new franchise, the existing franchise
will remain in effect until 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 their
intention to allow the franchise agreement
to expire.
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SECTION 3. CONDITIONS OF USE.
3.1 Location of Facilities. Gas Facilities
must be located, constructed, installed and
maintained so as not to interfere with the
City Utility System or the safety and
convenience of ordiruuy travel along and
over Public Ways. Gas Facilities may be
located on Public Grounds as determined
by the City. The Company's construction,
reconstruction, operation, repair,
maintenance and location of Gas Facilities
is subject to other ordinances and
regulations of the City.
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 may not
open or disturb the surface of any Public
Way or Public Ground without first
having obtained a permit from the City,
for which the City may impose a
reasonable fee. The permit conditions
imposed on the Company may not be
more burdensome than tliose imposed on
other utilities for similar facilities or work.
The 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) the
Company gives notice to the City before,
if possible, commencement of the
emergency repair. Within two (2)
business days after commencing the
repair, the Company must apply for any
required permits and pay the required fees.
3.4 Restoration. After completing work
requiring the opening of a Public Way or
Public Ground, 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 (2) 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 Way or Public Ground,
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 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.
Given the remedy outlined in this section
3.4 available to the City for
noncompliance by the Company, the City
hereby waives any requirement for the
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 separate existing or future
ordinance of the City.
3.5 Company 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 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.
3.6 Notice ofImprovements. The City must
give the Company reasonable notice of
plans for improvements to Public Ways or
Public Ground. The notice must 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
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extent of the improvements, (iv) the time
when the City will start the work, and, (v)
ifmore than one Public Way or Public
Ground 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 of the 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 connections 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 in Public
Ways. If the City determines by the
proper exercise of its police power to
vacate a Public Way for a City
improvement project, or to grade, regrade
or change the alignment of any Public
Way, or construct or reconstruct any City
Utility System in any Public Way, the City
may order the Company to relocate its Gas
Facilities at the Company's own expense.
The City must give the Company
sufficient notice of plans to vacate for a
City improvement project, or to grade, re-
grade, or change the alignment of any
Public Way or to construct or reconstruct
any City Utility System. If a relocation is
ordered within five (5) years of a prior
relocation of the same Gas Facilities,
which was made at Company expense, the
City will reimburse the Company on a
time and material basis for Non-
Betterment Costs. If any subsequent
relocation is required because of the
extension of a City Utility System to a
previously unserved area, the City may
require the Company to make the
subsequent relocation at the Company's
expense. Nothing in this ordinance
requires the Company to relocate, remove,
replace or reconnect its Facilities at the
Company's expense 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.
The City will not require the removal of
abandoned natural gas facilities in any
case, unless these facilities are in direct
conflict with a Public Way grade change
or proposed City Utility System or City
improvement. The provisions of this
section 4.1 apply only to Gas Facilities
constructed in reliance on this franchise
and the Company does not waive its rights
under an easement or prescriptive right in
the Public Way.
4.2 Relocation of Gas Facilities in Public
Ground. 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 Ground, upon a finding by City that
the Gas Facilities have become or will
become a substantial impairment of the
public use or enjoyment to which the
Public Ground 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 and the Company does not waive
its rights under an easement or prescriptive
right in the Public Ground. The City will
not require the removal of abandoned
natural Gas Facilities in Public Ground in
any case, unless these facilities have
become or will become a substantial
impairment of the public use or enjoyment
to which the Public Ground is or will be
put.
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4.3 Vacation of Public Ways. The City must
give the Company at least two-weeks'
Notice of the proposed vacation of a Public
Way. Except where required for a City
street or other improvement project or as
otherwise provided in Section 4.1, the
vacation ofa Public Way, after the
installation of Gas Facilities, does not
deprive the Company of its rights to
operate and maintain the Gas Facilities
until the reasonable cost of relocating the
same and the loss and expense resulting
from such relocation are first paid to the
Company.
Upon request of the Company, and if the
City in its sole discretion determines that
the vacation of Public Way does not
require the relocation of existing Gas
Facilities, the City shall reserve a utility
easement to the Company, created by and
within the document establishing the
vacation.
In no case will the City be liable to
Company for failure to specifically
preserve a right-of-way under Minnesota
Statutes, Section 160.29.
4.4 Projects with Federal Funding.
Relocation, removal or rearrangement of
any 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, if funds for these
purposes are available.
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 all claims and
actions on account of injury or death of
persons or damage to property occasioned
by the construction, maintenance, repair,
removal, on or across the Public Ways and
the Public Grounds. The City will not be
indemnified for losses or claims alleged to
be the result of negligence of the City, its
elected officials, employees, officers, or
agents, except for those arising out of the
issuance of permits for, or inspection of the
Company's plans or work. The City shall
not be entitled to reimbursement for its
costs incurred prior to notification to the
Company of claims or actions and a
reasonable opportunity for the Company to
accept and undertake the defense.
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 promptly
given to the Company within a reasonable
period. If the 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 as to third parties a
waiver of any defense or immunity
otherwise available to the City; and the
Company, in defending any action on
behalf of the City is entitled to assert in
any action every defense or immunity that
the City could assert in its own behalf.
SECTION 6. SUCCESSORS IN
INTEREST.
6.1 This ordinance and the rights and
obligations conferred hereby, is binding
on and inures to the benefit of the City and
its successors and on the Company and its
successors and permitted assigns.
SECTION 7. FRANCHISE FEE.
7.1 Separate Ordinance. The City reserves
all rights under Minnesota Statutes,
5
Section 216B.36 or other law to require a
ftanchise fee at any time during the term
of this franchise. In addition to the
ftanchise fee, the Company shall be
required to pay only such other fees,
charges, costs or taxes which are generally
required to be paid by other businesses or
persons in the City. The ftanchise fee must
be imposed by a separate ordinance
adopted by the City Council, which
ordinance may not be adopted until at
least sixty (60) days after Notice enclosing
such proposed ordinance has been served
upon the Company by certified mail. A fee
imposed under this section does not
become effective until sixty (60) days
after Notice enclosing the adopted
ordinance has been served upon the
Company by certified mail.
SECTION 8. LIMITATION ON
APPLICABILITY.
8.1 Limitation on Applicability. This
Ordinance constitutes a franchise
agreement between the City and the
Company. No provision of this 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 FRANCmSES
SUPERSEDED.
9.1 Previous Franchises superseded. This
franchise supersedes and replaces previous
franchises granted to the Company or its
predecessors.
SECTION 10. AMENDMENTS.
10.1 Amendments. This ordinance may be
amended at any time by the City. An
amendatory ordinance becomes effective
upon the filing of the Company's written
consent thereto.
SECTION 11. SEVERABILITY.
11.1 Severability. If any portion of this
ftanchise is found unenforceable for any
reason, the validity of the remaining
provisions will not be affected.
Passed and approved
Mayor
A TIEST:
Clerk
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