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HomeMy WebLinkAboutOrdinance No. 2020-08 ORDINANCE NO. 2020-08
AN ORDINANCE GRANTING TO CENTERPOINT ENERGY
RESOURCES CORP., DBA CENTERPOINT ENERGY TEXAS
GAS OPERATIONS, THE 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 FRIENDSWOOD, TEXAS, FOR THE
TRANSPORTATION, DELIVERY, SALE AND DISTRIBUTION
OF NATURAL GAS; PROVIDING FOR A TERM OF 30 YEARS;
CONTAINING OTHER PROVISIONS RELATING TO THE
FOREGOING SUBJECT; PROVIDING FOR SEVERABILITY
AND PROVIDING AN EFFECTIVE DATE.
* * * * * * * * * *
WHEREAS,the City Council of the City of Friendswood, Texas, finds it is in the best interest
of the City of Friendswood (the "City") to enter into a new franchise agreement with CenterPoint
Energy Resources Corp., dba CenterPoint Energy Texas Gas Operations ("Company") Company to
furnish and supply natural gas to the general public in the City of Friendswood;
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
FRIENDSWOOD, TEXAS:
Section 1. Grant ofAuthority. Subject to the terms,conditions and provisions of this ordinance,
the right, privilege and franchise is hereby granted to CenterPoint Energy Resources Corp., dba
CenterPoint Energy Texas Gas Operations,hereinafter called "Company",to construct,install,extend,
remove,replace,abandon,operate and maintain its facilities within the Public Rights-of-Way of the City
of Friendswood, Texas, for the transportation, delivery, sale and distribution of natural gas within the
corporate limits of the City of Friendswood, as the same are now and as the same may from time to
time be extended. The right,privilege and franchise granted hereunder is granted subject to the existing
City of Friendswood Charter and Ordinances
Section 2. Definitions. The following words, terms and phrases, when used in this ordinance,
shall have the meanings ascribed to them in this section, except where the context clearly indicates a
different meaning:
A. "City"shall mean the City ofFriendswood,Texas,a home-rule municipal corporation.
B. "Company" shall mean CenterPoint Energy Resources Corp., dba CenterPoint Energy
Texas Gas Operations, a Delaware Corporation, and shall not mean any of its affiliates
and subsidiaries who shall have no right,privilege or franchise granted hereunder.
C. "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
sales of natural gas for heating,lighting,power and any other purposes for which natural
gas may now or hereafter be used.
D. "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 now or hereafter owned or controlled
by City.
E. "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.
Section 3. Term of Franchise. Upon the filing with the City by the Company of the acceptance
required hereunder, this franchise shall be in full force and effect for a term and period of thirty (30)
years,unless terminated in accordance with the terms hereof.
Section 4. Construction and Maintenance of Natural Gas Distribution System. All Facilities
installed by Company shall be of sound material and good quality,and shall be laid so that they will not
interfere with the artificial drainage of the City or its underground fixtures,or with navigation in or the
natural drainage of any stream. All Facilities shall be installed in accordance with Section 23 and
applicable federal and state 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 Company 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 14 the relocation of
Company's Facilities at Company's cost within the Public Rights-of-Way whenever such relocation shall
be reasonably necessary to accommodate public works improvement projects within the Public Rights-
of-Way that are being made by or for the benefit of the City, provided such benefit is evidenced by an
executed agreement by the City and the entity responsible for the project. Upon request of the City,
the Company shall make available at no cost to the City during working hours, maps showing the
location of Company's Facilities within the corporate limits of the City.
Section 5. Streets to be Restored to Good Condition. The Company 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. Following completion of work in the Public Rights-of-Way,
Company shall repair the affected Public Rights-of-Way as soon as possible,but in all cases,Company
shall comply with all City ordinances governing time periods and standards relating to excavating in the
Ord No.2020-08 2
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. Permits. Company and its contractors shall obtain a permit in accordance with
Friendswood City Code Section 26-292,Pemuts,as it currently exists or as hereinafter amended. Company
expressly agrees that the City may rely on the information Company provides regarding its own
Facilities in its permit application and Company shall hold the City harmless and indemnify the
City in accordance with Section 13 of this Agreement. All work shall be preceded by an 811 call
and be subject to the Texas One-Call Statute (Texas Utilities Code, Chapter 251, and any
successor statutes). Company shall give the City telephone notice of the initiation of emergency
repairs involving breaks in the paved surface of the Public Rights-of- Way, including sidewalks
and curbs, as soon as practicable under the circumstances and shall submit a permit promptly
following completion of the work. Company and contractors performing work for the Company
shall not be required to obtain any permits for relocations of Facilities requested by the City,
provided that the relocated Facilities are placed in the location designated by the City and
relocation is otherwise in accordance with the City's request to relocate. This Franchise shall
constitute a permit to park vehicles in the Streets and other Public Rights-of-Way when necessary
for the installation, replacement, abandonment, operation or maintenance of Company's
Facilities; provided that such parking does not impair or impede traffic and Company pays for all
damages to the Public Rights-of-Way. Company and contractors performing work for Company
shall not be required to pay any fee in addition to the franchise fee in order to obtain a permit to
perform work on Company's Facilities, or park within the Streets and other Public Rights-of-Way.
Section 7. 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, state and
federal regulations. Company 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
Company as a result of fires, strikes, riots, storms, 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 Company shall do all things reasonably within its power to restore normal
service as quickly as practicable.
Section 8.Payment to the City. In consideration of the rights and privileges herein granted,the
Ord No.2020-08 3
administration of the Franchise by the City, the temporary interference with the use of Public Rights-
of-Way and cost and obligations undertaken by the City in relation thereto and in lieu of any license,
charge, fee, Street 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 Company agrees to pay to
the City franchise fees in the amount and manner described herein.
Company agrees to pay to the City quarterly during the continuance of this Franchise a sum of money
equal to four(4%) of the Company's gross receipts for the preceding calendar quarter received by the
Company from the sale of gas within the corporate limits of the City plus seven cents(70)per Mcf for
natural gas transported by Company for its Transport Customers during such quarter. "Transport
Customer" means any person or entity for whom Company transports gas through the distribution
system of Company within the corporate limits of City for consumption within the corporate limits of
City. The franchise fees hereunder shall be calculated for the calendar quarters ending March 31,
June 30, September 30, 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 Company after the Effective Date of this Franchise. In no event shall the Company 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 shall deliver to the Company 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 9. 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 from the receipt of
notice from the City of any such annexation, the Company shall assure that any and all customers
within such annexed territory are included and shown on its accounting system as being within the
corporate limits of the City of Friendswood. After such sixty (60) day period,the payment provisions
specified in Section 8 of this Franchise shall apply to gross receipts and transport fees received by the
Company from customers located within such annexed territory. Company shall true-up its map of
City boundaries to the City's map on an annual basis.
Section 10. Non-Exclusive Franchise. Nothing contained in this Franchise shall ever be
Ord No.2020-08 4
construed as conferring upon the Company any exclusive or privileges of any nature whatsoever.
Section 11. Compliance and Remedies.
(a)In the event the Company by act or omission violates any material term,condition
or provision of this Franchise, the City shall notify the Company in writing of such
violation. Should the Company fail or refuse to correct any such violation within thirty(30)
days from the date of City's notice,the City shall,upon written notification to the Company,
have the right to terminate this agreement. Any such termination and cancellation shall be
by ordinance adopted by City Council; provided, however, before any such ordinance is
adopted,the Company 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 Company that it will be provided an opportunity to be heard by 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 Company
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 City and Company 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
City's exercise of any particular remedy shall not constitute a waiver of its rights to exercise
any other remedy.
Section 12. Reserve of Powers. 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 ofthe State of Texas and under the Charter and Ordinances
of the City of Friendswood or other applicable law, to regulate public utilities within the City, to
regulate rates of public utilities within the City,and to regulate the use of the Public Rights-of-Way by
the Company; and the Company, by its acceptance of this Franchise,agrees that all lawful powers and
rights,whether regulatory or otherwise,as are or as may be from 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 13. INDEMNITY. THE COMPANY, ITS SUCCESSORS AND ASSIGNS, SHALL
PROTECT AND HOLD THE CITY AND ITS OFFICERS, AGENTS, AND EMPLOYEES
(COLLECTIVELY REFERRED TO IN THIS SECTION AS "THE CITY")HARMLESS AGAINST
ANY AND ALL CLAIMS OR DEMANDS FOR DAMAGES TO ANY PERSON OR PROPERTY
BY REASON OF THE CONSTRUCTION AND MAINTENANCE OF THE COMPANY'S
NATURAL GAS DISTRIBUTION SYSTEM, OR IN ANY WAY GROWING OUT OF THE
RIGHTS GRANTED BY THIS FRANCHISE, EITHER DIRECTLY OR INDIRECTLY, OR BY
Ord No.2020-08 5
REASON OF ANY ACT, NEGLIGENCE OR NONFEASANCE OF THE COMPANY OR THE
CONTRACTORS,AGENTS OR EMPLOYEES OF THE COMPANY OR ITS SUCCESSORS AND
ASSIGNS, AND SHALL REFUND TO THE CITY ALL SUMS WHICH THE CITY MAY BE
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 COMPANY OR ITS SUCCESSORS AND ASSIGNS SHALL
INDEMNIFY, DEFEND, AND HOLD THE CITY HARMLESS FROM AND ON ACCOUNT OF
ALL DAMAGES, COSTS, EXPENSES, ACTIONS, AND CAUSES OF ACTION THAT MAY
ACCRUE TO OR BE BROUGHT BY, A PERSON, PERSONS, COMPANY OR COMPANIES AT
ANY TIME HEREAFTER BY REASON OF THE EXERCISE OF THE RIGHTS AND
PRIVILEGES HEREBY GRANTED, OR OFTHE ABUSE THEREOF.
Section 14. Relocation of Facilities. The Company shall, upon written request of the City,
relocate its Facilities within Public Rights-of-Way at Company's own expense, exclusive of Facilities
installed for service directly to City, to accommodate public works or improvement projects that are
being made by or for the benefit of the City, provided such benefit is evidenced by an executed
agreement by the City and the entity responsible for the project. Public works or improvement projects
may include, but are not limited to, street widening, changes of grade, water, sewer, or drainage
upgrades, construction or reconstruction projects and relocation of traffic lanes. City shall bear the
costs of all relocations of Facilities requested by the City for reasons other than the aforementioned
public works improvement projects.
Section 15. 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 16. Records and Reports.
(a) Books of Account. The Company 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 Company'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 three (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 Company's operations under this Franchise shall be
made available for inspection and copying no later than thirty(30)days from receipt of such
Ord No.2020-08 6
request.
(c) Interest on Underpayments and Overpayments.
(1)Amounts due to City for late payments shall include interest,
compounded daily equal to the return on equity plus three percent (3%) granted to
the Company in its most recent proceeding fixing rates applicable to customers within
the corporate limits of the City.
(2)If the City identifies, as a result of a franchise fee compliance review,
amounts owed by the Company from prior periods or prior underpayments, then
the Company shall pay simple interest on such amounts equal to the return on equity
granted to the Company 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 from the date the initial payment was due until it is paid and shall not be
billed to customers.
(3)Amounts due Company for past overpayments shall include simple
interest equal to the return on equity granted to the Company in its most recent
proceeding fixing rates applicable to customers within the corporate limits of the
City;provided,however, if there is a change in the approved return on equity during
the time period subject to the City's audit or inquiry,then for each time period during
which there was an overpayment,the approved return on equity in effect during such
time period shall be used in calculating interest under this subparagraph(c). Interest
payable on such sums shall be credited to customers.
Section 17.Easement. In consideration for the compensation set forth in Section 8,City agrees
that if City sells, conveys, or surrenders possession bf any portion of the Public Right-of-Way that is
being used by Company pursuant to this Franchise, City,to the maximum extent of its right to do so,
shall first grant Company an easement for such use and the sale,conveyance,or surrender of possession
of the Public Right-of-Way shall be subject to the right and continued use of Company.
Section 18. Acceptance. The Company shall,within thirty(30)days following the final passage
and approval of this Franchise, file with the City Secretary of the City of Friendswood, a written
statement signed in its name and behalf in the following form:
"To the Honorable Mayor: and City Council of the City of Friendswood:
CenterPoint Energy Resources Corp.,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
Ord No.2020-08 7
By:
..e.30Z4'1%
Tal R. Centers Jr.,Divis.r ice President,
Regional Operations
Dated this 5+day of A fitc \' 2020.
Section 19. Severability. If any provision, section, subsection, sentence, clause or phrase 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 of Friendswood in adopting this Franchise that no portion hereof or provision
hereof 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 20. Notices. Every notice, order, petition, document, or other direction or
communication to be served upon the City or the Company shall be deemed sufficiently given if sent by
registered or certified mail,return receipt requested. Every such communication to the Company shall
be sent to:
CenterPoint Energy Resources
Corp. Vice President Regulatory Relations
P. O. Box 4567
Houston,TX 77210-4567
With a copy to:
General Counsel,Gas Division
P. O. Box 2628
Houston,TX 77252-2628
Every such communication to the City or the City Council shall be sent to the:
City of Friendswood,
Attn: City Manager
910 South Friendswood Drive
Friendswood,TX 77546
Ord No.2020-08 8
With a Copy to: City of Friendswood
Attn: City Attorney
910 South Friendswood Drive
Friendswood, TX 77546
Section 21. Publication, Passage and Effective Date. Pursuant to the Home Rule Charter of
the City of Friendswood, Texas, Sec. 9.03,this Ordinance shall be read at two (2)regular meetings of
the City Council. Within seven(7) days following the first reading of this Ordinance, the full text of
this Ordinance shall be published one (1) time in the official newspaper of the City, and the expense
of such publication shall be borne by the prospective Company. This Ordinance shall take effect and
be in force from and after the first day of the month following thirty days after receipt of Company's
acceptance filed pursuant to Section 18 ("Effective Date").
Section 22. Repeal of Previous Ordinances. On and after the Effective Date, this Franchise
replaces all Previous Franchise agreements with the Company, which Previous Franchise Agreement
shall be hereby repealed as of the Effective Date of this Franchise.
Section 23. Compliance with Charter and Ordinances. This Franchise, the rights granted
hereby and the operations and activities performed by Company pursuant hereto shall be subject to
applicable provisions of the Charter of the City of Friendswood, Texas. The Franchise and rights
granted hereby and the operations and activities performed by Company pursuant hereto shall be subject
to all valid ordinances and regulations of the City insofar as such ordinances and regulation (a) do not
shorten the term hereof or terminate,abrogate,or materially and adversely affect the Franchise and right
granted to Company hereby, (b) do not conflict with or are not inconsistent with the terms and
provisions contained in this ordinance, with or are not inconsistent with the terms and provisions
contained in this Ordinance, (c) prevent or interfere with Company's Federal and State regulatory
obligations or (d) do not unreasonably regulate the Company's operations and activities in the City
Right-of-Way. If Company believes a future Ordinance unreasonably regulates its operations and
activities in the City Right-of-Way, City and Company shall meet and reach a mutually agreeable
solution prior to its application to the Company. All such conflicting or inconsistent ordinances are
hereby repealed to the extent of such conflict or inconsistency.
Section 24. Adoption. Passed and adopted with all necessary procedural formalities by the
City Council of the City of Friendswood,Texas,at a regular meeting held at the regular place,at which
a quorum was present throughout.
Ord No.2020-08 9
PASSED AND APPROVED on the first reading the 3rd day of February, 2020.
PASSED AND APPROVED on the second reading the 2nd day of March, 2020.
M e For-
Mayor
ATTEST:
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1)()-Q-LINUQS--Ca.-1
Melinda Welsh, TRMC :* VO'
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City Secretary . •
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Ord No.2020-08 10
THE STATE OF TEXAS §
§
COUNTIES OF GALVESTON/HARRIS §
I, the duly appointed, qualified and acting City Secretary of Friendswood, Texas, do hereby
certify that the above and foregoing ordinance was read on first reading at a regular meeting of the
City Council of said Friendswood, Texas, held on the 03 day of February, 2020; 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 Mayor
Mike Foreman was absent, and six Council members:
1. Steve Rockey 4. Robert Griffon
2. Sally Branson 5. John Scott
3. Trish Hanks 6. Brent Erenwert
were present at said meeting and acted as the Council throughout; that the same has been signed and
approved by the Mayor and is duly attested by the City Secretary; that the above and foregoing
ordinance was read on second reading at a regular meeting of the City Council of said Friendswood,
Texas held on the 02 day of March, 2020; 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 Mayor Mike Foreman, and six Council
members:
1. Steve Rockey 4. Robert Griffon
2. Sally Branson 5. John Scott
3. Trish Hanks 6. Brent Erenwert
were present at said meeting and acted as the Council throughout; that the same has been signed and
approved by the Mayor and is duly attested by the City Secretary;and that the same has been duly filed
Ord No.2020-08 11
with the City Secretary and recorded by the City Secretary in full in the books for the purpose of
recording the ordinances of the City of Friendswood, Texas.
EXECUTED under my hand and the official seal of the City of Friendswood, Texas at said
City,this 02 day of March, 2020.
........ Melinda Welsh, City Secretary, TRMC
•' R I�j�b•. City of Friendswood, Texas
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Ord No.2020-08 12