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02-11-2013 CC
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02-11-2013 CC
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MV City Council
City Council Document Type
City Council Packets
Date
2/11/2013
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For example, a prior franchise provision requiring Xcel to maintain facilities in "good <br />condition," now refers to any maintenance requirements in the city's ROW ordinance. A <br />provision requiring Xcel to provide "field locations" for its buried utility facilities and <br />other mapping information now refers to applicable requirements in state law and <br />regulations, subject to any limitations on release of such information in the federal <br />Homeland Security Act. Provisions detailing when Xcel must relocate its facilities, at its <br />expense, to facilitate a city project now refer to the applicable provisions in state law. <br />Finally, a new provision clarifies that if any provision in a franchise conflicts with a city <br />ROW ordinance provision, the franchise prevails. <br />2. Defaults; Dispute Resolution. <br />The former franchises provided that in the event of an alleged default, the city was <br />obligated to give notice and an opportunity to cure then could sue to demand <br />performance. The proposed renewal franchises provide for a meeting of the parties and <br />good faith attempt to resolve the dispute, the opportunity for mediation, and then a right to <br />commence litigation. This type of alternative dispute resolution is now common in utility <br />franchises. <br />3. Franchise Fees <br />Under the prior franchises, the City annually adopts franchise fee ordinances requiring <br />Xcel to pay fees to the City equal to 4% of its local electric and gas revenues. Xcel <br />proposed several important changes to this franchise fee arrangement. <br />Specifically, Xcel proposed that the cost of any permits it obtains to authorize work in <br />ROW be deducted and offset from its franchise fee payments, that the city to impose <br />different franchise fee amounts based on different customer classes (i.e. Xcel would pass <br />different franchise fee amounts on to residential, commercial, and industrial customers), <br />that the city only receive franchise fee payments annually instead of monthly, and that the <br />city be required to impose equivalent franchise fees on other utilities. <br />After much discussion, the proposed franchises only include the following: "The City <br />shall impose equivalent franchise fees on other energy suppliers to the extent the City has <br />such authority." The franchise fee provisions otherwise remain unchanged, as the city <br />desired. <br />Conclusion <br />We recommend approval and adoption of the proposed new Xcel electric and gas <br />franchises. <br />417974 RJV MU210-164 <br />
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