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• <br />• <br />• <br />To: Mayor and Council <br />From: Jeff Karison, City Administrator <br />Date: November 28, 2011 <br />Re: Centennial Utilities Franchise Agreement <br />Background <br />The 25 -year franchise agreement with Centennial Utilities (City of Circle Pines) expires <br />March 31, 2012. The franchise agreement gives Centennial Utilities the right to operate <br />and maintain a gas utility in Lino Lakes. In exchange for that right, the City of Circle <br />Pines pays an annual franchise fee to Lino Lakes, which is 7% of its gross revenues from <br />the sale of gas within the City and 3% of its gross revenues from gas sales to customers <br />who receive interruptible gas service. <br />Lino Lakes has one representative on the Centennial Utilities Commission. There are <br />947 customers in Lino Lakes paying the franchise fee. In May the City received a check <br />for $93,956.37 for natural gas service in 2010. <br />There are three entities that own and operate gas distribution systems in Lino Lakes <br />pursuant to City franchise ordinances: Centennial Utilities, CenterPoint (formerly <br />Minnegasco), and Xcel Energy (formerly NSP). CenterPoint and Xcel Energy do not pay <br />a franchise fee. <br />The following table shows each gas and electric provider in Lino Lakes and the current <br />status of a franchise agreement. <br />Franchise <br />Provider Service Expires Franchise Fee <br />Centennial Utilities Natural gas 3/31/12 7% <br />CenterPoint Energy Natural gas 3/31/12 None <br />Connexus Energy Electricity No agreement None <br />Xcel Energy Gas & Electric No agreement None <br />