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470 Pillsbury Center <br />200 South Sixth Street <br />Minneapolis MN 55402 <br />(612) 337-9300 telephone <br />(612) 337-9310 fax <br />http://www.kennedy-graven.com <br />MEMORANDUM <br />To: Jim Ericson, City Administrator <br />From: Bob Vose <br />Date: January 24, 2013 <br />Re: Xcel; gas and electric franchises <br />In February, 2012, Xcel notified the city that its electric and gas franchises, Ordinance <br />Nos. 517 and 518, would be expiring shortly. Xcel requested that the city renew these <br />franchises. Because negotiations were not completed by the expiration date in December, <br />city and company representatives agreed to short extensions while the terms of the <br />proposed renewal franchises were being finalized. <br />Xcel initially proposed its model franchise. However, after comparing the model <br />document to the current franchises, it became apparent that many substantive changes <br />were proposed and most were not beneficial to the city. Accordingly, we insisted on <br />using the current franchises as the starting point. After many rounds of revisions, the <br />parties have negotiated terms that are acceptable to the company and recommended for <br />approval by city staff and legal counsel. <br />As with the prior franchises, the proposed renewal franchises are substantively identical <br />to one another. Further, the proposed franchises would again be for a term of 20 years <br />and many other terms and conditions remain materially unchanged. The following <br />summarizes the most significant proposed changes to the prior franchises. <br />1. <br />Right -of -Way (ROM)Requirements- <br />Since adoption of the prior Xcel franchises in 1992, state laws governing use of public <br />ROW by utilities, and regulation of such ROW by cities and other local government <br />units, has been substantially amended. Minn. Stat. § 237.162 and .163. Further, the <br />Minnesota Public Utilities Commission has promulgated ROW regulations under these <br />new laws. Minn. Rules, Part 7819.0100 et seq. The city revised its local ordinances <br />governing ROW in accordance with these changes to state law. <br />The proposed new franchises reflect these changes in state laws and regulations and local <br />city ordinances. The changes ensure that the franchises dovetail with current laws. <br />417974 RJV MU210-164 <br />