HomeMy WebLinkAboutORD 18-013ORDINANCE NO. 18-013
AN ORDINANCE GRANTING,TO ENTERGY TEXAS, INC. THE RIGHT,
PRIVILEGE AND FRANCHISE TO CONDUCT WITHIN THE CITY AN
ELECTRICAL LIGHTING AND POWER BUSINESS; PROVIDING AN
EFFECTVIE DATE UPON ACCEPTANCE IN WRITING BY ENTERGY
TEXAS, INC.
NOW, THEREFORE, BE IT ORDAINED
BY THE CITY COUNCIL OF THE CITY OF BEAUMONT:
Section 1: That, subject to the terms, conditions and provisions of this ordinance,
the City of Beaumont, Texas, hereinafter referred to as "City," does hereby grant unto
Entergy Texas, Inc., hereinafter referred to as "Company", the right, privilege and
franchise to conduct within the City an electrical lighting and power business and to
enter upon, erect, construct, maintain, extend, repair, replace and remove in, under,
upon, over, above, across and along any and all of the present and future public roads
(notwithstanding any use restrictions), highways, parks, streets, lands, alleys, whether
designated or undesignated and other public areas and rights of way of the City and
over, under, above, along and across any and all streams, canals, bayous,
embankments and bridges, now or hereafter owned or controlled by the City
(hereinafter referred to as "Public Rights -of -Way"), a system of poles, pole lines, towers,
distribution lines, transmission lines, wires, guys, cables, conduits, transformers and
other distribution and transmission instrumentalities, facilities and appurtenances
(including communications facilities) necessary or proper for the transmission and
distribution of electricity and communication including broadband over power line
communications services ("BPL") into, in, within, from, across, and through the City, as
now existing, or as said City limits may hereafter be extended (hereinafter referred to as
"Company Facilities"); and Company is authorized to use Company Facilities for the
transmission, distribution, delivery and sale of electricity and communication to the
municipality and to the inhabitants of the City and to any governmental agency, and to
any governmental subdivision, and to any person, firm or corporation, wherever located,
within or without the City limits of the City of Beaumont, for use by such purchaser, or
purchasers, for light, power, cooling and heat, and for any other purpose, or purposes,
whether same or different from those herein specified, for which electricity may be used.
Provided, this Franchise does not include places where the City's authority to permit
such installations is or hereafter may be withdrawn by the State, or where the Texas
Department of Transportation or other State agency constructs or maintains such public
facility or place and lawfully excludes the authority of the City to permit such public utility
and BPL installations therein. In the event that the City abandons a Public Right -of -
Way, City shall ensure that the Company has access to sufficient and reasonable Right -
of -Way to maintain Companies Facilities.
Section 2: The right, privilege and franchise granted under this Franchise
Ordinance is, at all times, subject to the continuing police power of the City; and the
Company shall comply with all present and future laws, ordinances and regulations of
the State of Texas and the City enacted pursuant to the City's or State's police power.
Section 3: Upon the filing with the City by Company of the acceptance required
hereunder, this franchise shall be in full force and effect for a term and period of twenty-
five (25) years commencing upon, and extending from, the date of passage of this
ordinance by City ("Effective Date")
Provided that, if subsequent to the effective date of this Agreement, any Texas
municipality, city or City within the Company's service area ("Other City or Municipality")
enters into with Company a franchise term of less than twenty-five (25) years, the City
will have the right after reasonable notice to receive the same term. If the City elects to
exercise this right, the new contract term will begin upon passage of an amendment to
this franchise approving of the same term as the other municipality and end when the
new term has run in its entirety, no matter how many years had expired under the
original twenty-five year term. Provided however, this provision is not applicable if the
Other City or Municipality is precluded from entering into a twenty-five (25) year term by
law or city charter.
Section 4: Company, on written request of any person, shall relocate, raise or
lower its wires temporarily to permit construction work in the vicinity thereof, or to permit
the moving of houses or other bulky structures. The expense of such temporary
relocation, raising or lowering of such wires shall be paid by the benefited party or
parties and the Company may require the payment in advance, being without obligation
to remove, raise or lower its wires until such payment shall have been made. The
Company shall be given not less than forty-eight hours prior notice to arrange for such
temporary wire change.
Section 5: The City shall have the power at any time to require the Company to
change permanently the route and position of Company Facilities when the City shall
find, by resolution, that such change is necessary in the closing, opening, widening or
relocating of streets or alleys, or water or sewer lines, or the changing of grade of
streets or alleys. The City shall use its best reasonable efforts to consult and confer
with the Company before requiring any such relocation or raising or lowering of its lines
or cables, with a view to accomplishing the result in a reasonable and economical
manner. If it becomes necessary to relocate any lines or facilities, City will provide
suitable Right of Way adjacent to the relocated street, alley, water line, or sewer line,
without any cost or expense to Company. The obligation to change the route does not
require the placement of overhead lines underground unless the City pays for the
increased costs of placing the lines underground. With the exception of costs incurred
by the City in the preceding sentence, all other costs of relocation pursuant to this
section shall be paid by the Company. Provided, however, the Company shall be
entitled to be paid for its costs of relocation required by the City if such expenses or
costs are reimbursable or payable to the Company or to the City or the State of Texas,
the United States, or any agency or subdivision of either whether directly or indirectly.
Section 6: To the extent that the City has authority to do so, it gives to Company,
during the life of this Franchise, the right, license, privilege and permission to trim and
remove trees and other vegetation, using generally accepted methods within the
vegetation management industry, located upon and overhanging the streets, alleys,
easements, sidewalks and public places of City, that interfere or offer hazards to the
operation of Company's facilities used or useful for the rendition of electric service. The
Company is responsible for the prompt removal and disposal of all trimmings associated
with maintenance of its lines and facilities.
Section 7: Nothing contained in this ordinance shall ever be construed as
conferring upon Company any exclusive rights or privileges of any nature whatsoever.
Section 8: If any provision, section, sub -section, sentence, clause, or phrase of
this ordinance is, for any reason, held to be unconstitutional, void, or invalid (or for any
reason unenforceable) the validity of the remaining portions of this ordinance shall not
be affected thereby, it being the intent of the City in adopting this ordinance that no
portion thereof or provision or regulation contained herein shall 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 9: The City, by granting this Franchise, does not surrender or to any
extent lose, waive, impair or lessen the lawful powers and rights, now or hereafter
vested in the City under the constitution and statutes of the State of Texas to regulate
the rates for services of Company; and Company, by its acceptance of this franchise,
agrees that all such lawful regulatory powers and rights, as the same may be from time
to time vested in the City, shall be in full force and effect and subject to the "exercise by
the City at any time.
Section 10: As compensation to City for the use and occupancy of its Public
Rights -of -Way, and in consideration for the other rights and privileges herein granted,
Company agrees to pay to the City and City agrees to accept from Company on August
1 of each year during the continuance of this agreement, a fee equal to $0.0021524
("Base Franchise Fee Factor") multiplied times the number of kilowatt hours delivered
during the period commencing on July 1 of the previous calendar year and ending on
June 30 of the calendar year in which the payment is due, inclusive, by Company to
retail customers whose consuming facility's point of delivery is within the City's
boundaries. At the time of each annual August 1 payment, Company shall also submit
to the City a sworn statement showing the following: (i) its kilowatt hour sales delivered
in total to the retail customers whose consuming facilities' points of delivery are located
within the City's boundaries for the preceding year upon which the franchise fee
payments are calculated; and (ii) a calculation of the annual Base Franchise Fee
payment. The statement shall be in a form substantially similar to attachment "A."
Provided that if, subsequent to the effective date of this Agreement, any Texas
municipality within the Company's service area negotiates with Company a
methodology for calculation of the payment of the franchise different than the Base
Franchise Fee kWh factor methodology used in this section and the Incremental
Franchise Fee kWh factor methodology used in Section 11(A), the City -will have the
right after reasonable notice to utilize the same methodology.
The parties agree that the payments due under this franchise are reasonable and
necessary and that the parties shall use their best efforts to enable Company to recover
these payments through its electric rates.
Section 11(A): In addition to the compensation set out in Section 10, and subject
to the provisions of Subsection 11(C), Company shall continue to pay on or before the
15th day of May, August, November and February ("Payment Date") an amount equal to
a $.0010137 charge per kilowatt hour ("Incremental Franchise Fee") multiplied times the
number of kilowatt hours delivered by Company during the preceding calendar quarter
ending March, June, September, and December ("Calculation Period"), in total to retail
customers whose consuming facilities points of delivery were located within the City's
boundaries less any applicable taxes including gross receipts taxes. This amount shall
be referred to as "Incremental Amounts." However, in connection with the passage of
this Agreement, City has also passed the attached Incremental Beaumont Franchise
Fee Recovery Rider effective April 2, 2018. Beginning with the August 2018 quarterly
payment due under this subsection and all future payment under this subsection will be
an amount equal to a $0.0015908 charge per kilowatt hour ("Incremental Franchise
Fee") multiplied times the number of kilowatt hours delivered by Company during the
preceding calendar quarter ending March, June, September, and December
("Calculation Period"), in total to retail customers whose consuming facilities points of
delivery were located within the City's boundaries less any applicable taxes including
gross receipts taxes.
Beginning on the first anniversary of the effective date of this Franchise
Agreement and annually thereafter, Company shall annually adjust the Incremental unit
per kWh franchise fee rate, set forth in subsection 11 (A), by an amount to be
designated in writing by the city based on the annual increase, if any, in the consumer
price index. The adjustment provided for in this subsection shall become effective only
upon the City's approval of an equivalent adjustment to the corresponding surcharge,
which provides for the Company's collection through the corresponding Surcharge of
the increase in the Incremental Franchise Fee payment resulting from the adjustment
provided in this subsection. The first payment of the increased Incremental Amount
shall be no sooner than the first full quarter in which the corresponding increased
Surcharge', has been in effect and shall include any amounts collected through the
increased Surcharge during any month of the prior quarter.
At the time of each quarterly payment for Incremental Amounts, Company shall
also submit to the City a sworn statement showing the following: (i) its kilowatt hour
sales delivered in total to the retail customers whose consuming facilities' points of
delivery are located within the City's boundaries for the preceding quarter upon which
the franchise fee payments are calculated; and (ii) a calculation of the quarterly
Incremental Franchise Fee payment. The statement shall be in a form substantially
similar to attachment "B."
Section 11(B): An underlying premise of this Franchise Agreement is that the
Company shall be kept financially whole with respect to any and all Incremental
Amounts, as defined above in this Section 11(A). The Incremental Amounts will be
collected through a Surcharge adopted and approved by City applicable to all retail
customers whose consuming facility's point of delivery are located within the City's
boundaries. The amount to be paid to City on each Payment Date shall never exceed
the amount collected by Company during the corresponding Calculation Period while
the Surcharge is in effect.
In the event the Public Utility Commission of Texas ("PUCT") or a court of
competent jurisdiction finds the amounts collected by Company through the Surcharge
are improper and disallows or requires repayment ("Disallowed Amounts"), Company
shall be entitled to collect all Disallowed Amounts through either direct payment by City
or a reduction of any subsequent franchise payments to City as provided in this
Subsection. Prior to Company's reduction in franchise payments, Company shall
provide the City 30 days for a one-time opportunity to make a direct payment to
Company of any Disallowed Amounts, such 30 days to run from City's receipt of
Company's written notice, which shall identify the Disallowed Amounts, the time period
over which the Disallowed Amounts accrued and an explanation of the calculations.
Subsequent to said 30 -day period, and in the absence of timely direct payment by the
City of the entirety of the Disallowed Amounts, Company is authorized to reduce any
future franchise payment(s) in an amount equal to any Disallowed Amounts not paid by
the City. Company is authorized to implement the procedures set forth in this
Subsection periodically as Company, in its sole discretion, determines is necessary to
recover any ongoing Disallowed Amounts.
The corresponding Surcharge described in this Subsection 11(B) shall appear as
a line item on Company's retail electric bill and identified as a "Municipal Franchise
Fee."
Notwithstanding any other provision in this Franchise Agreement, if at any time
the Incremental Franchise Fee portion is ever included in base rates, the Incremental
Franchise Fee Surcharge will cease as of the effective date of the new base rates that
incorporate the previously surcharged Incremental Amounts and the incremental
amounts will continue to be paid as set forth in Section 11(A).
Section 11(C): Upon the occurrence of any of the following events, the
Incremental Franchise Fee rate and quarterly payments provided for in Subsection
11(A) shall no longer be applicable or effective for the purpose of calculating the
franchise payment:
i. the PUCT or a court of competent jurisdiction 1) finds the corresponding
Surcharge unlawful or otherwise prohibits the Surcharge recovery of the Incremental
Amounts; 2) finds that the franchise fees calculated under this Section 11(A), or the
amounts collected through the corresponding surcharge or through a reduction in
franchise payments, as provided herein, may not be recovered by Company from its
customers; or 3) in some manner prevents or prohibits Company from recovering said
Incremental Amounts; and
ii. with respect to the preparation for, or implementation of, retail open
access in Company's Texas service territory, Company or Entergy's affiliate distribution
company in Texas ("DISCO") or Entergy's affiliate retail electric provider in Texas
("REP"), at any time, is not permitted to implement the monthly Surcharge described in
Subsection 11(B).
Upon the occurrence of any of the events enumerated in Subsections 11(C) i or
ii, only the franchise rate contained in Section 10 shall be applicable and effective for
the purpose of calculating and paying the franchise payment under this Franchise
Agreement and Cities shall have the option, for one year, to terminate the Franchise
Agreement and negotiate a new Franchise Agreement so long as the Company is not
required to make a franchise fee payment greater than it is authorized to collect in rates.
Further, in the event the PUCT or a court of competent jurisdiction finds a portion of the
corresponding Incremental Franchise Fee Surcharge unlawful or otherwise prohibits a
portion of the Incremental Franchise Fee Surcharge recovery of the Incremental
Amounts, the Incremental Franchise Fee rate and quarterly payments provided for
under Subsection 11(A) and (B) shall be amended and adjusted such that the franchise
payment made by the Company pursuant to this Section 11(A) to the City is no greater
than the amounts the Company is authorized to collect through the corresponding
Surcharge. Nothing in the immediately preceding sentence requires that Company
agree to a realignment or allocation of the recovery of any portion of the Incremental
Amounts from the corresponding Surcharge to the Company's base rates.
Section 11(D): City agrees that (a) if City intervenes in any regulatory
proceeding before a federal or state agency in which the recovery of Company's
franchise fees is an issue, the City will take an affirmative position supporting 100%
recovery of franchise fees by Company in the manner consistent with this agreement;
and (b) in the event of an appeal of any such regulatory proceeding in which the City
has intervened, the City will take an affirmative position in any such appeals in support
of the 100% recovery of such franchise fees by Company in the manner consistent with
this Agreement.
i. City agrees that it will take no action, nor cause any other person or entity
to take any action, to prohibit the recovery of such Incremental Amounts by Company.
ii. Neither the adoption of this Franchise Agreement, nor the corresponding
Surcharge shall be used by either the City or the Company, in any proceeding before a
regulatory authority or state or federal court of law, as precedent for a reduction in the
Company's rates or as evidence of or support for the positions taken by the City or the
Company in such matters.
Section 12: In addition to the consideration set forth elsewhere in this franchise
agreement and subject to a Joint Use Agreement, the Company shall hold itself ready to
furnish free of charge, subject to the use of the City, such pole space as may be
required from time to time for the installation of traffic, police and fire alarm system
conductors, and alarm or other equipment all of which are owned exclusively by the
City; provided that such conductor space does not exceed the capacity of one cross -
arm on any one pole, and provided that such space is then available on existing poles.
The specific location for these traffic, police and fire alarm conductors, boxes or
equipment on Company's poles shall be determined by the Company, and will be
allotted at the times specific applications for space are received from the City. Where a
main underground ductline is constructed or installed between manholes by Company
after the effective date of this franchise agreement, Company shall, as part of same,
provide free of charge for the installation by City of its traffic, police or fire alarm cables
owned exclusively by the City, one top duct having one capped off entry channel and
one capped off exit channel between each two manholes, such entry and exit channels
leaving the duct bank enclosure outside of, but near to, such manholes, and no cable or
other equipment of City shall enter Company's manholes. All cables installed by the
City in Company ducts shall be of the non-metallic, sheath type to prevent corrosive or
electrolytic action between the City and Company-owned cables. All City -owned
conductors and cables, whether on poles or in ductlines, shall be constructed,
maintained and operated in such manner as to not interfere with or create a hazard in
the operation of the Company's electrical transmission and distribution system. Further,
all City -owned traffic, police and fire alarm conductors, and alarm boxes, and any City
circuits on Company poles, and all cables installed by City in ducts constructed by
Company, shall be installed in strict compliance with the applicable provisions of the
National Electrical Safety Code.
Section 13: The fee payable hereunder shall be the total compensation payable
by Company to City for Company's use of the Public Rights -of -Way for the conduct of
its business under the franchise. City agrees that any street rental ordinances currently
in effect shall not be applicable to Company and City shall not charge any additional fee
for the use or occupancy of the Public Rights -of -Way in City. If City does charge
Company any additional fee for the use or occupancy of the Public Rights -of -Way in
City, then Company may deduct the amount charged from the next succeeding
franchise payment or payments until fully reimbursed. This does not bar the City from
assessing against the Company or its property ad valorem taxes levied on property,
excise taxes levied, or other taxes.
Section 14: City may initiate an audit or other inquiry, or may pursue a cause of
action in relation to the payment of the fee only if such audit, inquiry, or pursuit of a
cause of action concerns a payment made less than two (2) years before
commencement of such audit, inquiry, or pursuit of a cause of action. All books and
records related to Company's calculation of the fee shall be available to City. Upon
receipt of a written request from City, such documents shall be made available for
inspection no later than forty-five (45) days from the receipt of such request. Company
shall make such documents available at the place such documents are located, at the
Company's Beaumont office, or any location mutually agreed upon according to the
needs and abilities of the respective parties. City shall advise Company of the results of
the audit within two years of the initiation of the audit. City must make a written demand
within two years of the initiation of the audit or any claims associated with the audit shall
be waived. Amounts due to City for past underpayments or amounts due Company for
past overpayments shall include interest calculated using the annual interest rates for
overcharges as set by the Public Utility Commission of Texas. Said interest shall be
payable on such sum from the date the initial payment was due until it is paid.
Section 15: Within thirty (30) days of the effective date of any expansion,
annexation, or de -annexation, or other lawful means of modifying the City's boundaries,
the City shall provide to Company reasonable notification of the change in the City's
boundaries.
Section 16: If the Company shall assign this Franchise to any other person or
corporation (the "Assignee") acquiring and duly authorized to acquire, own and operate
the Company's property and to carry on the Company's business, the Assignee shall
execute and deliver to the City an agreement in writing to be bound by all of the
Company's obligations, liabilities, and undertakings under this Franchise. The Assignee
shall thereupon be deemed to be substituted for the Company, and the Company shall
stand released from all obligations under this Franchise except such as have already
accrued. If the Assignee fails to file such agreement within thirty (30) days after said
assignment, City shall so notify in writing the Company and Assignee of this deficiency.
Should Assignee fail to cure such deficiency within 30 days of the deficiency notification,
this agreement shall terminate.
Section 17: If it becomes necessary in furnishing electricity as contemplated
under this franchise, the City grants to the Company the right and privilege to take up
pavements and sidewalks, if any, in and upon said streets, alleys and highways in said
City of Beaumont, and such may be over and across any stream or bridge, for the
purpose of making such excavation and installation as may be necessary; provided,
however, except in the event of an emergency in which excavation is necessary to
ensure the safety of the public or the integrity of Company's facilities, Company shall
not take up or excavate any pavement at any time without first securing permission of
the Director of Public Works of City or City Manager; and provided further, that all
excavations and installations so made shall be performed in such manner as will cause
the least inconvenience to the public, and Company shall promptly restore to as good
condition as before working thereon, and to the reasonable satisfaction of the Director
of Public Works of City or City Manager, all streets excavated by it. The City of
Beaumont shall have the right to have an inspector present at each excavation and
installation. Further, ETI will use reasonable efforts to comply with Chapter 6 of the
Manual on Uniform Traffic Control Devices (MUTCD).
Section 18: If any' of the facilities installed by Company hereunder shall be in
any respect damaged or injured by the City of Beaumont or any of its officers, agents,
representatives, or employees, in connection with the performance of any work or
repairs that may be done to the streets, avenues, alleys, and other public places of the
City of Beaumont, Company shall not be entitled to prosecute or maintain a claim
against the City of Beaumont for any such damages or injuries so sustained by it, and
the same is hereby in all things waived; provided, however, the foregoing portion of this
Section shall not apply where such property is damaged or injured as a proximate result
of installing, maintaining or removing City's equipment upon or from Company's poles,
or in or from Company's ductlines, as provided in Section 12.
Section 19: It shall be the Company's obligation hereunder to furnish efficient
electrical service to the public at its rate schedule and Company shall maintain its
system in reasonable operating condition during the continuance of this Agreement.
Section 20: The Company, its successors and assigns shall indemnify, save
and hold harmless the City from any and all claims for injuries and damaged to person
or property occasioned by or arising out the construction, reconstruction, maintenance,
operation or repair of said Company's electrical lighting and power system, or by the
conducting of Company's business in The City of Beaumont, or in any way growing out
of the granting of this franchise, either directly or indirectly, or by reason of any act,
negligence or nonfeasance of the contractors, agents or employees of Company, its
successors and assigns, and shall refund to the -City all sums which it may be adjudged
to pay on any such claims, or which may arise or grow out of the exercise of the rights
and privileges hereby granted, or by the abuse thereof, except caused by City's, its
employee's or agent's negligence and Company shall indemnify and hold the City
harmless from and on account of all damages, costs, expenses, actions and causes of
actions that may accrue to or be brought by any person, persons, company or
companies at any time hereafter by reason of the exercise of the rights and privileges
hereby granted, or of the abuse thereof; provided, however, that the provisions of this
Section shall not be applicable to any claims, damages, costs, expenses, actions or
cause of actions proximately resulting from the use by City, its officers, agents,
representatives or employees, of Company's pole and ductlines for the installation,
maintenance or removal of City's equipment, as provided in Section 12.
Section 21: This franchise replaces all former franchise and/or street rental
ordinances and agreements with Company, which are hereby repealed as to Company.
Section 22- Company shall, within sixty (60) days from the date of the final
passage of this ordinance by the City Council of the City of Beaumont, Texas, file with
the City Secretary of the City of Beaumont, Texas, a written statement signed in its
name and behalf in the following form:
"To the Honorable Mayor and the City Council of the City of
Beaumont":
Entergy Texas, Inc. hereby accepts the attached ordinVice finally
passed by the City Council f the City of Beaumont, the - - day
of , 20 IV, , and agrees to be bound by all of its terms
and provisi ns.
Entergy Texas, Inc.
Section 22: This franchise ordinance shall be in force, and effective, from and
after the passage of this ordinance, conditioned that Company file the written
acceptance above provided, within the period provided, after the passage of this
ordinance; and thereupon this franchise shall become a binding contract; and shall exist
for a period of twenty-five (25) years from the date of its passage.
The meeting at which this ordinance was approved was in all things conducted in
strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter
%'19211
PASSED BY THE CITY COUNCIL of the City of Beaumont on first reading this
the 27th day of March, 2018.
The meeting at which this ordinance was approved was in all things conducted in
strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter
551.
PASSED BY THE CITY COUNCIL of the City of Beaumont on second reading
this the 24th day of April, 2018.
The meeting at which this ordinance was approved was in all things conducted in
strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter
551.
PASSED BY THE CITY COUNCIL of the City of Beaumont on final reading this
the 1 st day of May, 2018.
y
- Ma Becky Ames -
"EnteW
May 10, 2018
Mayor Becky Ames
City of Beaumont
801 Main Street, Suite 125
Beaumont, TX 77701
To the Honorable Mayor and City Council:
Entergy Texas
P.O. Box 2951
350 Pine Street
Beaumont, TX 77704-2951
Sallie T. Rainer
President and CEO
Entergy Texas, Inc. hereby accepts the attached ordinance passed by the City
Council of the City of Beaumont on the 240' day of April, 2018 and agrees to be bound by
all of its terms and provisions.
Entergy Texas, Inc.
(formerly known as
Entergy Gulf States, Inc.)
/�r ( �►
Sallie T. Rainer
i/ .`
41
Title: President and CEO