HomeMy WebLinkAbout25-1546ORDINANCE NO. 25-1546
AN ORDINANCE OF THE CITY OF DENTON BY THREE SEPARATE VOTES, EACH
BEING CONDUCTED ON SEPTEMBER 16, 2025, OCTOBER 21, 2025, AND DECEMBER 2,
2025, GRANTING A NONEXCLUSIVE GAS FRANCHISE TO UNIVERSAL NATURAL
GAS, LLC, FOR USE OF PUBLIC RIGHTS-OF-WAY IN A DESIGNATED AREA IN THE
CITY OF DENTON FOR THE PURPOSE OF CONSTRUCTING, MAINTAINING AND
OPERATING A SYSTEM OF PIPELINES AND OTHER FACILITIES FOR THE PROVISION,
TRANSPORTATION, DISTRIBUTION AND CONVEYANCE OF GAS TO CUSTOMERS IN
SUCH DESIGNATED AREA; AUTHORIZING EXECUTION OF A FRANCHISE
AGREEMENT BETWEEN THE CITY OF DENTON AND UNIVERSAL NATURAL GAS,
LLC, PROVIDING FOR COMPENSATION TO THE CITY FOR THE USE OF THE PUBLIC
RIGHTS-OF-WAYS, PROVIDING TERMS, CONDITIONS AND REQUIREMENTS
RELATED TO THE USE OF PUBLIC RIGHTS-OF-WAY IN THE CITY OF DENTON AND
TO THE CONSTRUCTION, MAINTENANCE AND OPERATION OF PIPELINES AND
OTHER FACILITIES FOR THE PROVISION, DISTRIBUTION AND TRANSPORTATION OF
GAS TO CUSTOMERS IN THE DESIGNATED AREA OF THE CITY OF DENTON;
PROVIDING FOR PUBLICATION; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, Chapter 121 of the Texas Utilities Code authorizes municipalities to adopt
ordinances that establish conditions for mapping, inventorying, locating, or relocating pipelines
over, under, along, or across a public street or alley or private residential area within the boundaries
of the municipality and establish conditions for mapping or taking an inventory in an area in a
municipality's extraterritorial jurisdiction; and
WHEREAS, Chapter 121 of the Texas Utilities Code states that except as expressly
provided in Chapter 121, subchapter E. of that Chapter does not reduce, limit, or impair a power
vested by law in a municipality; and
WHEREAS, the Texas Railroad Commission (Commission) is the state agency with
primary regulatory jurisdiction over the oil and natural gas industry, pipeline transporters, natural
gas and hazardous liquid pipeline industry, natural gas utilities, the LP-gas industry as well as
several other areas; and
WHEREAS, the Commission does not have jurisdiction over, and exercises no regulatory
authority with respect to, private or public roads or road use. Permits issued by the Commission
for oil and gas exploration, production and waste disposal do not limit any independent authority
of a municipality, county, or other state agencies with respect to road use; and
WHEREAS, subject to Gas Utility Regulatory Act (Chapter 33 of the Texas Utilities Code)
limitations, a municipality has exclusive original jurisdiction over the rates, operations, and
services of a gas utility within the municipality in order to provide fair, just, and reasonable rates
and adequate and efficient services; and
WHEREAS, the Texas Transportation Code provides that a home rule city has exclusive
control over and under the public highways, streets, and alleys of the City, including the ability to
control, regulate, or remove an encroachment or obstruction on a street, open or change a public
street, and make improvements to a public highway, street, or alley of the municipality.
WHEREAS, Article XIII of the Denton City Charter entitled Franchises, provides the City
Council may by ordinance grant, renew and extend all franchises of all public utilities operating
within the City for a maximum term of 20 years; and
WHEREAS, the Denton City Charter requires an ordinance granting, amending, renewing,
or extending a public utility franchise be passed by a majority vote of the entire City Council at
three (3) regular meetings of the City Council; and
WHEREAS, a public utility franchise ordinance must be published once each week for
three (3) consecutive weeks in the official newspaper at the expense of the franchisee in order to
take effect thirty (30) days after its final passage, however, such ordinance shall be subject to
referendum as provided in Article IV of the Denton City Charter; and
WHEREAS, the Denton City Charter provides the City Council has the power and duty to
determine and regulate the charges, fares or rates of all public utilities operating within the City,
require franchise holders to reimburse the City for reasonable expenses related to advising the
council on requested rate increases, prescribe reasonable standards of service and quality furnished
by each utility, prevent unjust discrimination, require certain actions as may be necessary to
provide adequate and efficient service, collect from every public utility operating in the City its
fair and just proportion of certain expenses related to the occupation and use of the public rights-
of-ways or compel such public utility to perform, at its own expense, its just share of those activities
requiring the expenses, and such other prescriptions and regulations provided by the Denton City
Charter and that the City of Denton deems desirable or conducive to the safety, welfare and
accommodation of the public, or to enforce franchise agreement provisions; and
WHEREAS, the Denton City Charter provides the City of Denton shall have power to
prohibit certain uses of the public rights-of-way and that any public utility franchise hereafter
granted shall be held subject to all of the terms and conditions contained in the various sections of
Article XIII of the Denton City Charter whether or not such terms are specifically mentioned in
the franchise agreement; and
WHEREAS, the provisions of the Denton City Charter shall not limit in any way the
discretion of the council in imposing such terms and conditions as may be reasonable in connection
with any franchise grant; and
WHEREAS, Universal Natural Gas, LLC, a Texas limited liability company, ("Company")
wishes to construct a system of pipelines and other facilities for the distribution and provision of
gas and to distribute and provide gas to customers in a designated area within the City of Denton,
and Company has applied for a franchise from the City in order to carry out those purposes; and
WHEREAS, the Company has agreed to extend services to a City of Denton owned parcel
identified by the Denton County Appraisal District as Property ID 64578 and commonly referred
to as Southwest Park; and
WHEREAS, The City of Denton ("City") has reviewed Company's request to enter into a
franchise agreement and determined that the granting of a franchise on the terms and conditions
set forth in the Franchise Agreement attached hereto, will assist in meeting the needs of gas by
customers in the City.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
DENTON, TEXAS:
Section 1. The recitals set forth above are found to be true and correct legislative and factual
determinations of the City of Denton and are hereby approved and incorporated into the body of
this Ordinance and made a part hereof for all purposes as if fully set forth herein.
Section 2. The City hereby grants Company a franchise to construct, install, maintain and repair a
system of pipelines and other facilities for the provision, distribution and transportation of gas in,
over, under, along and across designated public rights-of-way of the City and to transact business
related to the provision of gas through that system of pipelines and facilities, subject to the
Franchise Agreement substantially in the form attached hereto as Exhibit I, which is hereby
incorporated and made a part of this Ordinance for all purposes.
Section 3. In accordance with and as required by Section 13.06 of the Denton City Charter, the
City Secretary shall compile and maintain a public record of all franchises heretofore or hereafter
granted by the City of Denton.
Section 4. 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.
Section 5. This ordinance shall be in full force and effect following (i) thirty days after final
passage; and (ii) its publication for franchises in accordance with the Denton City Charter.
Section 6. The Franchise Agreement shall be in full force and effect after Company files with the
City Secretary its written statement of acceptance of the Franchise Agreement within sixty (60)
calendar days after the passage and approval by City in accordance with the terms of the Franchise
Agreement, and the Parties execute the Franchise Agreement.
Exhibit I
FRANCHISE AGREEMENT
A. The City Council of the City of Denton has adopted an ordinance that grants Universal
Natural Gas, LLC (Company) a franchise to construct, install, maintain and repair a system of
Facilities as that term is defined herein, for the provision, distribution and transportation of natural
Gas, as defined herein, in, over, under, along and across the public rights-of-way in the City of
Denton and to transact business related to the provision, distribution and transportation of Gas
through such Facilities ("Franchise Ordinance") subject to the execution by Company.
B. In accordance with the Franchise Ordinance, Company desires to enter into this Franchise,
hereinafter referred to as Franchise or Franchise Agreement and guarantees unconditional
performance of its duties and obligations under this Franchise.
C. Ordinance Number 25-1546, adopted on December 2, 2025, is incorporated into this
Franchise Agreement and made a part hereof for all purposes as if fully set forth herein.
D. The effective date of this Franchise is the date of execution by the Parties
.
Agreement
The recitals above are true and correct and are hereby incorporated into this Franchise Agreement
as if fully set forth herein.
1. DEFINITIONS.
Capitalized terms used in this Franchise and not otherwise defined within this Franchise shall have
the following meanings:
Affiliate shall have the meaning stated in the Texas Utilities Code §§ 101.003 and 101.004.
Company shall mean Universal Natural Gas, LLC.
City shall mean the area within the corporate limits of the City of Denton, Texas and the governing
body of the City of Denton, Texas.
Commission shall mean the Railroad Commission of the State of Texas or other authority
succeeding to the regulatory powers of the Commission.
Customer shall mean any Person located, in whole or in part, within the City and that is or may be
served by Company under the terms of this Franchise.
Director shall mean the Director of the City s Finance Department. or their designee.
Facilities shall mean all of Company's property, whether real or personal, which is reasonably
necessary to provide, distribute or transport Gas into, within and through the City, including, but
not limited to, transmission and distribution pipes, mains, Gas compressors and meters.
Franchise shall mean the authorization issued to Company by the City for (i) the construction,
installation, maintenance, and repair of Company's Facilities in, over, under, along and across the
Public Rights-of-Way in the area designated in Exhibit A (Franchise Area); (ii) the operation of
such Facilities for the provision, distribution and transportation of Gas; and (iii) any other related
uses of the Public Rights-of-Way, pursuant to and in accordance with the Franchise Ordinance and
this Franchise Agreement.
Gas shall mean gaseous fuels such as natural gas.
Gross Receipts shall mean all revenue derived or received, directly or indirectly, by Company from
or in connection with the operation of the Facilities within the corporate limits of the City and
including, without limitation:
(1) all revenues received by Company from the sale of Gas to all classes of Customers
within the City; and
(2) all revenues received by Company from the transportation of Gas through the
Facilities of Company within the City to Customers located within the City regardless of
the origination of the gas within the Company's Facilities; and
(3) the value of Gas transported by Company for Transport Customers through the
Facilities of Company within the City, with the value of such Gas to be reported by each
Transport Customer to Company, provided, however, that should a Transport Customer
refuse to furnish Company its Gas purchase price, Company shall estimate same by
utilizing Company's monthly industrial weighted average cost of Gas, as reasonably near
the time that the transportation service is performed.
(4) Gross Receipts shall specifically include the following:
(A) Other revenues derived from the following charges:
(i) charges to connect, disconnect, or reconnect Gas within the City; and
(ii) charges to handle return checks from consumers within the City; and
(iii) such other service charges and charges as may, from time to time, be
authorized in the rates and charges required to be on file with the City; and
(iv) contributions in aid of construction ("CIAC"), which shall be
calculated and paid in accordance with Section 4.1.2 of this Franchise
Agreement; and
(B) Revenues billed but not ultimately collected or received by Company; and
(C) Gross receipts fees.
(5) Gross Receipts shall not include:
(A) Revenue of any Person including, without limitation, an affiliate, to the
extent that such revenue is also included in Gross Revenues of Company; and
(B) Sales taxes; and
(C) Any interest income earned by Company; and
(D) All monies received from the lease or sale of real or personal property;
provided, however, that this exclusion does not apply to the lease of Facilities
located within a Public Right-of-Way in the City.
Person shall mean, without limitation, an individual, a corporation, a limited liability company, a
general or limited partnership, a sole proprietorship, a joint venture, a business trust or any other
form of business entity or association.
Public Right-of-Way shall mean all dedicated public streets, highways, alleys and rights-of-way in
the City, but shall not include any property of the City that is not a dedicated public street, highway,
alley or right-of-way.
Transfer or Transferred shall mean (i) any form of sale, conveyance, assignment, lease, or sublease
of all or substantially all of Company's Facilities within the City, or merger involving Company as
to this Franchise or Company's Facilities or (ii) any change in the effective control of Company.
The term Transfer includes (i) any change in limited partnership interests, non-managing limited
liability company interests, or non-voting stock representing thirty percent (30%) or more of the
equity interests in the entity in question and (ii) any option, right of conversion or similar right to
acquire interests constituting control without substantial additional consideration.
Transport Customer shall mean a customer that consumes Gas transported but not sold by
Company within the corporate limits of the City.
2. GRANT OF RIGHTS.
2.1. General Use of Public Rights-of-Way for Provision of Gas.
Subject to the terms and conditions set forth in this Franchise and the Denton City Charter and
ordinances, the City hereby grants Company the right to (i) erect, construct, install maintain and
operate Facilities in, over, under, along and across the Public Rights-of-Way in the Franchise Area
and (ii) furnish, transport, sell and distribute Gas to Customers in the Franchise Area. Company
hereby acknowledges and agrees that this Franchise does not allow Company to provide any goods
or services other than Gas in or through the City and does not allow Company to provide Gas in or
through any part of the City other than the Franchise Area. Notwithstanding any other provision
herein, Company agrees any rights or privileges granted to Company herein apply only in the
Franchise Area.
2.2 Changes to Territorial Limits.
Company agrees that the territorial limits of the City are subject to expansion or reduction by
annexation and contraction of municipal boundaries and that Company has no vested right in a
specific area. If the Company provides Gas service to an area at the time that area is annexed to
the City, such Gas service by Company shall be provided under the same terms and conditions of
this Franchise. The parties agree to amend Exhibit A in the event the geographic area applicable to
this Franchise Agreement changes pursuant to this section. Such expansion or reduction of the
Franchise Area shall occur without further action by the City or Company except written approval
by the City Manager and an individual duly authorized to bind the Company. The Company must
revise its payments due to any expansion or reduction no later than thirty (30) days after such
boundary change is effective.
2.3. Nonexclusive.
2.3.1. This Franchise and all rights granted to Company herein are strictly nonexclusive. The City
reserves the right to grant other and future Gas franchises to other Persons in accordance with
applicable law and as the City deems appropriate. This Franchise does not establish any priority
for the use of the Public Rights-of-Way by Company or by any present or future franchisees or
other permit holders. In the event of any dispute as to the priority of use of the Public Rights-of-
Way, the first priority shall be to the public generally, the second priority to the City in the
performance of its various functions, and thereafter, as between franchisees and other permit
holders, as determined by the City in the exercise of its powers, including the police power and
other powers reserved to and conferred on it by the State of Texas.
2.3.2. City reserves to itself the right and power at all times to exercise, in the interest of the public
and in accordance with state law, regulation and control of Company -
of-Way to ensure the rendering of efficient public service and the maintenance of Company
System in good repair throughout the term of this Franchise.
2.3.3. City expressly reserves the right to own and operate its own system for the purpose of
transporting, delivering, distributing, or selling gas to and for the City and inhabitants thereof.
2.3.4. Nothing herein shall impair the right of City to fix, within constitutional and statutory
limits, a reasonable price to be charged for natural gas, or to provide and fix a scale of prices for
natural gas and other charges, to be charged by Company to residential consumers, commercial
consumers, industrial consumers or to other consumers, or any combination of such consumers,
within the territorial limits of the City as same now exists or as such limits may be extended from
time to time hereafter.
3. TERM
The term of this Franchise shall be for ten (10) years and become effective on the Effective Date,
as established in the Franchise Ordinance, and shall expire at 11:59 P.M. CST ten (10) years from
the Effective Date (the "Term"). This Franchise and all rights of Company provided hereunder
shall automatically terminate upon the expiration of this Franchise. This Franchise Agreement may
be renewed for five (5) years upon mutual written consent of the City and Company, each a
"Renewal Term." This Franchise Agreement may be renewed as many times as the City and
Company mutually agree.
4. FEES AND PAYMENTS TO CITY.
4.1 Franchise Fee.
Company shall pay the City throughout the term of this Franchise an amount equal to five percent
(5%) of Company's Gross Receipts ("Franchise Fee"). If permitted by applicable law, following at
least thirty (30) days' advance written notice to Company, the City may review and change the
amount of the Franchise Fee to the amount of the franchise fee applicable to all other Gas utilities
within the City by ordinance adopted by the City Council.
4.1.1. Confidential Information Regarding Transport Customers.
Company shall require each of its Transport Customers to disclose to Company on a quarterly basis
their aggregate purchase prices of Gas transported through Company's Facilities. If Company
submits any documents to the City that are related to disclosures made to Company by any of its
Transport Customers, Company may remove from such documents any information that would
disclose either the identity of the Transport Customer or other information deemed confidential by
Company, provided that any such removal does not prevent the City from its determining any
Transport Customer's purchase prices of Gas transported through Company's Facilities. In order
for the City to verify the accuracy of information provided by Company, Company shall, at the
City's written request, give the City access to any information deemed confidential by Company
and that was removed by Company in documents provided to the City.
4.1.2. Due Date of Franchise Fee.
Except for Franchise Fee amounts that are based on CIAC, Company shall pay the Franchise Fee
to the City on a calendar quarterly basis. The Franchise Fee shall be due within forty-five (45) days
following the last day of each quarter. The Franchise Fee amounts based on CIAC shall be
calculated on an annual calendar year basis, i.e., from January 1 through December 31 of each
calendar year. The Franchise Fee amounts that are due based on CIAC shall be paid at least once
annually, on or before April 30 of each year, based on the total CIAC recorded during the preceding
calendar year.
4.1.3. Effect of Other Municipal Fees Accepted and Paid by Company.
Company agrees the percentage amount of the Franchise Fee provided for herein to the City of
Denton is equal to or is a greater percentage of the Franchise Fee agreed to by Company or provided
for in any other similar Gas municipal franchise, which includes any franchise ordinance or
agreement.
Company further agrees that where terms or provisions related to all fees, costs, pass-throughs,
taxes etc. are not included in the Franchise Fee are provided to other municipalities
in similar Gas franchises and that are more favorable than those provided to the City, then the
Payment to be paid by Company to the City pursuant to this Franchise Agreement shall be
increased without any further action required or taken by the City so that the amount due and to be
paid hereunder is proportionally equal to the amount that would be due and payable to the City
were the franchise fee provisions of that other similar municipal franchise applied to the City.
If Company should at any time after the Effective Date hereof agree to a new similar municipal
franchise or renew a similar existing municipal franchise ordinance with another municipality and
the franchise fee owed to that municipality for the use of its public rights-of-way would, if applied
to the City, result in a Franchise Fee greater than the amount otherwise due the City under this
Franchise Agreement, then the Franchise Fee to be paid by Company to the City pursuant to this
Franchise Agreement shall be increased without any further action required or taken by the City so
that the amount due and to be paid hereunder is equal to the amount that would be due and payable
to the City were the franchise fee provisions of that other municipal franchise applied to the City.
The Company shall also notify the City of the change pursuant to the notification provisions herein.
The provisions of this Section 4.1.3 apply only to the amount of the Franchise Fee to be paid to the
City and do not apply to other payment provisions, including, without limitation, the timing of such
payments.
4.1.4. Accompanying Report.
Company shall submit with its Franchise Fee payment a written report in a form acceptable to the
City and verified by an officer of the Company that summarizes Company's Gross Receipts,
including but not limited to, its gross revenues for the preceding calendar quarter upon which
franchise fees are calculated, including the amount of revenues received by Company for the
transportation of gas; (ii) the coded identity of Company's Transport Customers during the
preceding calendar quarter; and (iii) the cost, volume, and transport fee of Gas transported during
the preceding calendar quarter for such Transport Customers.
4.1.5. Audits.
The City may audit Company at any time to verify the accuracy of Franchise Fees paid to the City
for the prior four (4) years. Company shall pay any additional amounts due the City as reported in
any City audit within thirty (30) days following the City's submission to Company of an invoice
for such sum, provided that the City Council shall afford Company a fair hearing with reference to
the audit and shall either approve or disapprove the results of the audit or make such order as may
be reasonable. The City and Company may compel the attendance of witnesses and the production
of books and other records in order to assist the City Council in its decisions relating to the accuracy
of the Franchise Fees paid to the City. If the additional amount due exceeds ten percent (10%) of
the Franchise Fee which the audit shows should have been paid to the City for the period in which
the audit covered, Company shall pay the City's costs for the audit. Otherwise, the City shall pay
its own costs for the audit.
4.1.6. Other Obligations.
In addition to the Franchise Fee, Company shall pay the City all sums which may be due the City
for property taxes, license fees, permit fees, or other taxes, charges, or fees that the City may from
time to time impose on all other Gas utilities within the City. Company shall be responsible for
publication of this Franchise as required by the Denton City Charter. The City may require the
funds prior to publication, or may invoice the Company for reimbursement.
4.2 Interest.
All sums not paid when due shall bear interest at the rate of ten percent (10%) per annum or the
maximum amount allowed by law, whichever is less, computed monthly. If such outstanding sums
are paid with interest within thirty (30) days following their respective due dates, Company's failure
to pay such sums by their respective due dates shall not, in and of itself, constitute an Event of
Default under Section 13 of this Franchise.
4.4. Tariff Recovery
City agrees (i) to the extent the City acts as regulatory authority, to adopt and approve that portion
of any tariff which provides for one hundred percent (100%) recovery of the franchise fee on
Discretionary Service Charges; (ii) in the event the City intervenes in any regulatory proceeding
before a federal or state agency in which the recovery of the franchise fees on such Discretionary
Service Charges is an issue, the City will take an affirmative position supporting the 100% recovery
of such franchise fees by Company and; (iii) in the event of an appeal of any such regulatory
proceeding ln 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. 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 franchise fees by Company. The City is not required to intervene in any proceeding, and is
also not required to expend any funds in order to comply with this section.
5. REGULATORY AUTHORITY OF THE CITY.
5.1. Rates.
A. The City Council hereby expressly reserves the full right, power, and authority to regulate
and establish the rates and charges for Company's provision, distribution and transportation of Gas
and any other services of Company, as provided by and in accordance with Texas law and the
Denton City Charter. Company may from time to time propose changes in its general rates by filing
an application with the City Secretary for consideration by the City Council. Within a reasonable
time consistent with applicable law, the City Council shall afford Company a fair hearing with
reference to the application and shall either approve or disapprove the proposed changes or make
such order as may be reasonable. The City shall have the full power and authority to inspect, or
cause to be inspected, Company's books and to inventory and appraise, or cause to be inventoried
and appraised, Company's Facilities and other real and personal property. In addition, the City may
compel the attendance of witnesses and the production of Company's books and other records in
order to assist the City Council in its decisions relating to the City's rate regulatory authority.
B. The Company agrees to initially establish the rates and charges as described in Exhibit C.
Future changes to these rates will be governed by Section 5.1(A) and (B).
C. The Grantee shall have the right to make and enforce such reasonable rules and regulations
as it may deem necessary for the extension of its facilities, the sale of its gas and the conduct of its
business, provided that such rules and regulations comply with the laws of the State of Texas, the
ordinances and regulations of the Grantor, the provisions of this Franchise, and with the applicable
orders, rules or regulations of the Railroad Commission of Texas where such RRC orders, rules
and regulations are consistent with the three items first listed in this sentence.
5.2. Other Matters.
Company's property and operations hereunder shall be subject to such regulation by the City as
may be reasonably necessary for the protection or benefit of the general public. In this connection,
Company shall be subject to, governed by and shall comply with all applicable federal, state, and
local laws, including all ordinances, rules, and regulations of the City, as same may be adopted and
amended from time to time.
5.3. Regulatory Expenses.
Company agrees that City may, at any time during the term of this Franchise, employ at the expense
of Company expert assistance and advice in determining fair, just, and reasonable rates to be
charged by Company to its consumers in the City, and in determining the extent to which Company
is complying with the terms and conditions of this Franchise Ordinance. In the manner requested
by the City, Company agrees to pay reasonable expenses in connection therewith, or reimburse
City for the same.
6. RECORDKEEPING AND ACCOUNTING.
Company shall keep complete and accurate books of accounts and records of its business and
operations in the City pursuant to this Franchise as required by the Commission and in accordance
with state and federal law, of accounts and in a manner that will allow the City to determine
investment, cost of service and operating expenses related to Company's provision of Gas to
Customers and transportation of Gas to Transport Customers. The City may require the keeping of
additional records or accounts which are reasonably necessary for purposes of identifying,
accounting for and reporting receipts, uncollectible accounts, and expenses or otherwise reasonably
necessary for the administration of this Franchise. The City shall have the right to inspect at
reasonable times the plant, equipment and other property of Company and its Affiliates (but only
to the extent that the Affiliate's plant, equipment or other property relates to Company's provision
of Gas to Customers or transportation of Gas to Transport Customers) in accordance with
applicable law and to examine, audit and obtain copies of the papers, books, accounts, documents
and other business records of Company pertaining to its business and operations in the City.
7. USE OF PUBLIC RIGHTS-OF-WAY.
7.1 Right-of-Way
7.1.1. Company acknowledges and agrees the City has the right to control and regulate the use of
the Public Rights-of-Way, public places and other City-owned property and the spaces above and
beneath them.
7.1.2. The City has and reserves the right to lay, and permit to be laid, storm, sewer, gas, water,
wastewater, and other pipe, lines, cables, and conduits, or other improvements and to do and permit
to be done any underground or overhead work that may be necessary or proper as determined by
the City in, across, along, over, or under Public Rights-of-Way occupied by Company. The City
also reserves the right to change in any manner any curb, sidewalk, highway, alley, public way,
street, utility lines, storm sewers, drainage basins, ditches, and the like as necessary or proper as
determined by the City.
7.2 Permits; Right-of-Way Requirements.
7.2.1. This Franchise does not relieve Company of any obligation to obtain permits, licenses, and
other approvals from the City necessary for the construction, installation, maintenance or repair of
Company's Facilities or the provision, distribution, or transportation of Gas through such Facilities.
7.2.2. Company agrees it must comply with the City Denton Charter and City of Denton, Texas
Code of Ordinances, Chapter 25, Article II, Construction and Repair, Division 3. Right-of-Way
Construction Management, as amended (ROW Ordinance), except where the requirements on
Company in this Franchise Agreement are more stringent than those in the ROW Ordinance. A
violation of the ROW Ordinance constitutes a breach of this Franchise.
7.3 No Undue Burden.
Company's Facilities shall not be erected, installed, constructed, repaired, replaced, or maintained
in any manner that places an undue burden on the present or future use of the Public Rights-of-
Way by the City and the public. If the City reasonably determines that any of Company's Facilities
do place an undue burden on a portion of the Public Rights-of-Way, Company, at Company's sole
cost and expense and within a reasonable time period specified by the City, shall modify the
Facilities or take other actions determined by the City to be in the public interest to remove or
alleviate the burden.
7.4 Minimal Interference.
Company shall not unreasonably interfere with traffic over streets, alleys, and highways.
Company's operations and activities within the Public Rights-of-Way in the City.
7.5. Marking of Facilities.
Company's Facilities shall be clearly marked in a manner to show conspicuously Company's name
and a toll-free telephone number of Company that a Person may call for assistance. The markings
and their placement shall be in compliance with all applicable law regarding marking, labeling and
notice, and shall be placed in a manner to ensure public safety, and to prevent accidental damage
such as during construction, maintenance or operations activity.
7.6. Emergency Work by the City
The City shall have the right to sever, disrupt, remove, relocate, damage or destroy any of
Company's Facilities without any prior notice and at no liability to the City if such action is deemed
necessary by the City Manager, Mayor, Police Chief or Fire Chief or their authorized
representatives due to a public emergency. For purposes of this Section 7.9.1, a public emergency
shall be any condition which, in the opinion of the officials specified herein, poses an immediate
threat to life, health or property and is caused by any natural or man-made disaster, including, but
not limited to, storms, floods, fires, accidents, explosion, water main breaks and hazardous
materials spills. Company, at Company's sole cost and expense, shall be responsible for the repair,
relocation or reconstruction of any of its Facilities that are affected by such action of the City.
7.7. Relocation.
acknowledges and agrees it is responsible for all costs for such relocation, and that Company must
comply with the applicable provisions related to relocation in Chapter 25 in the City of Denton
Code of Ordinances.
8.CUSTOMER SERVICE AND CONSUMER PROTECTION.
8.1. General Standards.
Company shall comply with the more stringent of the Customer service and consumer protection
provisions of (i) this Franchise Agreement and any applicable ordinance of the City or (ii) Chapters
182 and 183 of the Texas Utilities Code and Title 16, Chapter 7, Subchapter D of the Texas
Administrative Code, as such provisions exist or are amended or recodified during the term of this
Franchise Agreement.
8.2. Dependable Service and Reasonable Rates.
Company shall take all reasonable and necessary steps to assure a dependable supply of Gas to
Customers at the lowest reasonable cost consistent with long-term reliable supplies and in a manner
that may be prescribed from time to time by appropriate state and local authorities.
8.3. New Service.
8.3.1. Extension of Facilities; Duty to Serve.
If a Customer requests Company to provide Customer with Gas to a property within the Franchise
Area, Company shall promptly comply with this request as provided by this Section 8.3. In
extending the provision of its services to a new Customer within the Franchise Area, Company
shall extend its mains and other Facilities in the Public Rights-of-Way necessary to provide Gas to
such Customer up to one hundred (100) feet without cost to that Customer. Otherwise, Company
shall have the right to contract with a Customer in regard to the installation of and payment for any
Facilities necessary to connect the Customer's premises with Company's Facilities in the Public
Rights-of-Way. Company shall not be required to extend its mains or other Facilities in the Public
Rights-of-Way more than one hundred (100) feet to serve any one Customer.
8.3.2 Extension of Facilities to City-owned Property.
As a condition of this Franchise Agreement, the Company agrees to extend services at the
a City-owned property identified by the Denton County Appraisal District
as property identification number 64578, known commonly as Southwest Park. The Company
agrees to extend these services to the Southwest Park and make these services available to the City
at the same time and in the same manner the services are available to the adjacent property in
Hunter Ranch Municipal Management District. The Parties agree Southwest Park is included in
the Franchise Area.
8.4 Ownership of Facilities.
Company shall own, operate, and maintain all supply lines extending from Company's main in the
Public Right-of-Way to a Customer's meter, including the meter itself. A Customer shall own,
operate, and maintain all underground supply lines extending from the point of connection with
the meter for that Customer to the point of connection with the piping for that Customer's dwelling
or structure.
8.5 Customer Notifications.
Company shall provide new Customers or any existing or potential Customer upon request with
written information on Company's installation and service policies and billing and complaint
procedures, which include a toll-free telephone number that a Customer may call for information,
assistance, or complaint resolution. In the event that the rules and regulations governing annual
notification are changed by statute or appropriate regulatory authority, Company reserves the right
to substitute such information for the information set forth in this paragraph.
8.6. Bills.
8.6.1. Format.
Company's bills to its Customers shall be issued monthly to each Customer with a balance due.
Bills shall be clear, concise, and understandable. Bills shall be fully itemized and clearly delineate
all activity during the billing period, including optional charges, rebates, credits, and late charges.
Each bill shall prominently display Company's contact information, including messaging, and local
or toll-free telephone numbers available for use by Customers.
8.6.2. Complaints and Disputes.
Company shall respond in writing to all written complaints from Customers regarding billing
matters within thirty (30) days of receipt. Company shall not disconnect a Customer for failure to
pay contested charges during a billing dispute,
9. REPORTS TO CITY.
9.6. Annual Statement,
Company shall make available for inspection by the City all annual reports filed with the
Commission or successor agency covering the operation of Company within the City. The City
shall have the right to require Company to submit reasonable information regarding Company's
properties and expenses related to Company's Facilities and operations in the City that may not be
included in such reports, including, but not limited to, a fiscal year-end balance sheet, an income
statement covering the results of operations for the respective fiscal year, a statement of retained
earnings for the year and a statement of cash flows, all of which the City may require to be audited
by an independent certified public accountant acceptable to the City and the Company and to
include a statement to that effect by the certified public accountant.
9.7. Construction-Related Reports.
Within fifteen (15) calendar days following the start of each calendar quarter, Company shall
provide the City a written report in a form acceptable to the Director of Capital Projects that
outlines Company's plans for construction in the Public Rights-of-Way for the forthcoming eight
(8) calendar quarters.
9.8. Other Reports.
Company shall report to the City such other information relating to Company as the City may
reasonably consider useful and shall comply with the City's preference for the form of such reports,
the time for such reports and the frequency with which such reports are to be made.
10. LIABILITY AND INDEMNIFICATION.
10.1. Liability of Company.
COMPANY SHALL BE LIABLE AND RESPONSIBLE FOR ANY AND ALL PROPERTY LOSS,
PROPERTY DAMAGE OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL
PERSONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING
FROM THE CONSTRUCTION, INSTALLATION, MAINTENANCE OR REPAIR OF COMPANY'S
FACILITIES, THE PROVISION, DISTRIBUTION OR TRANSPORTATION OF GAS IN OR
THROUGH THE CITY OR ANY OTHER USE OF THE PUBLIC RIGHTS-OF-WAY BY
COMPANY, ITS OFFICERS, AGENTS, SERVANTS, EMPLOYEE CONTRACTORS AND
SUBCONTRACTORS.
10.2. Disclaimer of' Liability.
THE CITY SHALL NOT AT ANY TIME BE LIABLE FOR ANY INJURY OR DAMAGE
OCCURRING TO ANY PERSON OR PROPERTY FROM ANY CAUSE WHATSOEVER THAT
ARISES OUT OF THE CONSTRUCTION, MAINTENANCE, REPAIR, USE, OPERATION,
CONDITION OR DISMANTLING OF COMPANY'S FACILITIES OR COMPANY'S
DISTRIBUTION, PROVISION OR TRANSPORTATION OF GAS, EXCEPT TO THE EXTENT
DIRECTLY CAUSED BY THE NEGLIGENT ACT(S) OR OMISSION(S) OR INTEN11ONAL
MISCONDUCT OF THE CITY.
10.3. Indemnification.
COMPANY, AT COMPANY'S SOLE COST AND EXPENSE, SHALL INDEMNIFY AND HOLD
HARMLESS THE CITY, ITS OFFICERS, BOARDS, COMMISSIONS, AGENTS, EMPLOYEES
AND VOLUNTEERS ("INDEMNITEES"), FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, DAMAGES, PENALTIES, CLAIMS, LIENS, COSTS, CHARGES, LOSSES AND
EXPENSES, WHETHER LEGAL OR EQUITABLE, WHICH MAY BE IMPOSED UPON,
INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEES BY REASON OF ANY
PERSONAL INJURY OR PROPERTY DAMAGE OR ANY ACT OR OMISSION OF COMPANY,
ITS PERSONNEL, EMPLOYEES, OFFICERS, AGENTS, CONTRACTORS OR
SUBCONTRACTORS WHICH MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH
(I) THE CONSTRUCTION, INSTALLATION, OPERATION, MAINTENANCE OR CONDITION
OF COMPANY'S FACILITIES; (II) THE PROVISION, DISTRIBUTION OR TRANSPORTATION
OF GAS THROUGH COMPANY'S FACILITIES; (III) ANY CLAIM OR LIEN ARISING OUT OF
WORK, LABOR, MATERIALS OR SUPPLIES PROVIDED OR SUPPLIED TO COMPANY, ITS
CONTRACTORS OR SUBCONTRACTORS; OR (IV) COMPANY'S FAILURE TO COMPLY WITH
ANY FEDERAL, STATE OR LOCAL LAW, ORDINANCE, FRANCHISE, RULE OR
REGULATION.
10.4. Assumption of Risk.
COMPANY HEREBY UNDERTAKES AND ASSUMES, FOR AND ON BEHALF OF COMPANY,
ITS OFFICERS, AGENTS, CONTRACTORS, SUBCONTRACTORS AND EMPLOYEES, ALL
RISK OF DANGEROUS CONDITIONS, IF ANY, ON OR ABOUT ANY CITY-OWNED OR CITY-
CONTROLLED PROPERTY, INCLUDING, BUT NOT LIMITED TO, THE PUBLIC RIGHTS-OF-
WAY. IN ADDITION, COMPANY HEREBY AGREES TO AND SHALL INDEMNIFY AND HOLD
HARMLESS ANY INDEMNITEE AGAINST AND FROM ANY CLAIM ASSERTED OR LIABII.JTY
IMPOSED UPON ANY INDEMNITEE FOR ANY PERSONAL INJURY OR PROPERTY DAMAGE
INCURRED OR ASSERTED BY COMPANY OR ANY OF ITS PERSONNEL, EMPLOYEES,
OFFICERS AGENTS, SERVANTS, CONTRACTORS OR SUBCONTRACTORS, AND ARISING
FROM THE INSTALLATION, OPERATION, MAINTENANCE OR CONDITION OF FACILITIES,
EXCEPT TO THE EXTENT CAUSED BY THE NEGLIENT ACTS OR OMISSIONS OR
INTENTIONAL MISCONDUCT OF THE CITY.
10.5. Defense of Indemnities.
IN THE EVENT ANY ACTION, LAWSUIT OR OTHER PROCEEDING IS BROUGHT AGAINST
ANY INDEMNITEE BY REASON OF ANY MATTER FOR WHICH THE INDEMNITEES ARE
INDEMNIFIED HEREUNDER, THE CITY SHALL GIVE COMPANY PROMPT WRITTEN
NOTICE OF THE MAKING OF ANY CLAIM OR COMMENCEMENT OF ANY SUCH ACTION,
LAWSUIT OR OTHER PROCEEDING, AND COMPANY, AT COMPANY'S SOLE COST AND
EXPENSE, SHALL RESIST AND DEFEND THE SAME WITH REASONABLE PARTICIPATION
BY THE CITY AND WITH LEGAL COUNSEL SELECTED BY COMPANY, AND SPECIFICALLY
APPROVED BY THE CITY. IN SUCH AN EVENT, COMPANY SHALL NOT ADMIT LIABILITY
IN ANY MATTER ON BEHALF OF ANY INDEMNITEE WITHOUT THE ADVANCE WRITTEN
CONSENT OF THE CITY.
COMPANY SHALL RETAIN COUNSEL SPECIFICALLY APPROVED BY THE CITY WITHIN 3
BUSINESS DAYS FROM THE DATE COMPANY IS AWARE AN ACTION, LAWSUIT OR OTHER
PROCEEDING IS BROUGHT AGAINST THE CITY, EXCEPT THAT CITY MAY CONSENT TO
A LONGER PERIOD TO RETAIN COUNSEL WHERE SUCH LONGER PERIOD DOES NOT
TO ACT IN ITS INTEREST AS TO SUCH ACTION,
LAWSUIT OR OTHER PROCEEDING.
11. INSURANCE.
Company shall, at its sole cost and expense, procure and maintain at all times, in full force and
effect, throughout the term of this Franchise, a policy or policies of insurance to provide coverages
as specified herein and in accordance with Section 25-83, as amended, of the City of Denton Code
of Ordinances, naming the City as an additional insured to cover all risks related to the use,
occupancy, condition, maintenance, existence or location of the Public Rights-of-Way and the
construction, installation, operation, maintenance or condition of its Facilities.
11.1. Primary Liability Insurance Coverage.
Commercial General Liability:
$1,000,000 per occurrence for Bodily Injury and Property Damage Liability except Worker's
Compensation, including coverage for the following where exposure exists and as directed by the
City's Risk Manager: (i) Premises Liability; (ii) independent contractors; (iii) products/completed
operations; (iv) personal injury; (v) contractual liability; (vi) explosion, collapse, and
underground property damage.
Property Damage Liability:
$1,000,000 per occurrence.
Automobile Liability:
$1,000,000 per accident,
including, but not limited to, all owned, leased, hired or non-owned motor vehicles used in
conjunction with the rights granted under this Franchise.
Worker's Compensation:
As required by law; and, Employer's Liability as follows:
$1,000,000 per accident.
Pollution Liability.
Pollution liability insurance which provides coverage for sudden and accidental environmental
contamination with minimum limits of liability of five million dollars ($5,000,000)
11.2. Excess Liability Insurance Umbrella.
$25,000,000, including primary coverage, for each coverage listed in § 11.1.
ll.3. Underwriters and Certificates.
Company shall procure and maintain its insurance with underwriters authorized to do business in
the State of Texas and who are acceptable to the City in terms of solvency and financial strength.
Within thirty (30) days following adoption of this Franchise by the City Council, Company shall
furnish the City with certificates of insurance signed by the respective companies or agents thereof
as proof that it has obtained the types and amounts of insurance coverage required herein. In
addition, Company shall, on demand, provide the City with evidence that it has maintained such
coverage in full force and effect.
11.4. Deductibles.
Deductible or self-insured retention limits on any line of coverage required herein shall not exceed
$25,000 per occurrence.
11.5. No Limitation of Liability.
The insurance requirements set forth in this Section 11 and any recovery by the City of any sum
by reason of any insurance policy required under this Franchise shall in no way be construed or
effected to limit or in any way affect Company's liability to the City or other Persons as provided
by this Franchise or law.
11.6 Adjustments During Term of Franchise
The City may adjust the limits required by this section at any time with sixty (60) to
Company based on changes in statutes or in circumstances that necessitate increased limits in order
to protect the interests of the City and the public in the public right-of-way.
12.TRANSFERS, OWNERSHIP AND CONTROL.
12.1. Management of Company.
Company shall personally manage its Facilities and oversee the provision, distribution, and
transportation of Gas within the City. Company shall not, directly or indirectly, contract for,
subcontract, or assign, in whole or in part, the management of its Facilities or the provision,
distribution, or transportation of Gas within the City to any other Person unless the City provides
advance written consent, which consent shall not be unreasonably withheld.
12.2. Transfers.
This Franchise shall not be sold, Transferred, assigned, or otherwise encumbered without the prior
written consent of the City, which consent shall not be unreasonably withheld. For purposes of this
Franchise, if Company seeks to obtain the consent of the City for any kind of Transfer, sale,
assignment or other encumbrance, Company shall submit a request for such consent in writing to
the City and shall submit or cause to be submitted to the City all such documents and information
that the City may reasonably need for its consideration of the request.
13.DEFAULTS.
The occurrence at any time during the term of this Franchise of one or more of the following
shall constitute an "Event of Default" under this Franchise:
13.1. Failure to Pay Franchise Fees.
An Event of Default shall occur if Company fails to pay any Franchise Fee on or before the
respective due date.
13.2. Breach.
An Event of Default shall occur if Company materially breaches or violates any of the terms,
covenants, representations, warranties, or sections set forth in this Franchise or fails to perform any
obligation required by this Franchise.
13.3. Bankruptcy, Insolvency or Receivership.
An Event of Default shall occur if Company (i) files a voluntary petition in bankruptcy; (ii) is
adjudicated insolvent; (iii) files any petition or fails to contest any petition filed against it seeking
any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar
relief for itself under any laws relating to bankruptcy, insolvency or other relief for debtors; (iv)
seeks, consents to or acquiesces in the appointment of any trustee, receiver, master, custodian or
liquidator of Company, any of Company's property, franchises, or any receipts, issues, earnings or
profits thereof; (v) makes an assignment for the benefit of creditors; or (vi) fails to pay Company's
debts generally as they become due.
13.4. Violations of the Law.
An Event of Default shall occur if Company at any time violates any federal, state, or local laws
including the Denton City Charter and ordinances.
14. UNCURED DEFAULTS AND REMEDIES.
14.1. Notice of Default and Opportunity to Cure.
If an Event of Default occurs, the City shall provide Company with written notice and shall give
Company the opportunity to cure such Event of Default. For an Event of Default which can be
cured by the immediate payment of money to the City, Company shall have thirty (30) days from
the date it receives written notice from the City to cure the Event of Default. If any payment amount
is in dispute, the second paragraph of this Section 14.1 shall control. For any other Event of Default,
Company shall have sixty (60) days from the date it receives written notice from the City to cure
the Event of Default. Except as otherwise provided by this Section 14.1, if any Event of Default is
not cured within the time period specified herein, such Event of Default shall, without further
notice from the City, become an "Uncured Default" and the City immediately may exercise the
remedies provided in Section 14.2.
In the event that Company disputes an amount of money owed by Company to City, Company
shall remit the disputed amount to the City. The City Manager or their designee shall review the
dispute and relevant documents. To the extent the ,
that portion of the disputed amount shall be returned.
14.2. Remedies for Uncured Defaults.
Upon the occurrence of an Uncured Default, the City shall be entitled to exercise, at the same time
or at different times, any of the following remedies, all of which shall be cumulative of and without
limitation to any other rights or remedies the City may have:
14.2.1. Termination of Franchise.
Upon the occurrence of an Uncured Default, the City may terminate this Franchise. Upon such
termination, Company shall forfeit all rights granted to it under this Franchise, and, except as to
Company's unperformed obligations and existing liabilities as of the date of termination, this
Franchise shall automatically be deemed null and void and shall have no further force or effect.
Company shall remain obligated to pay and the City shall retain the right to receive Franchise Fees,
Payments, and any other amounts due up to the date of termination. In accordance with and as
provided by , Company shall remove its
Facilities from and restore the Public Rights-of-Way as and when requested by the City. The City's
right to terminate this Franchise under this Section 14.2.1 does not and shall not be construed to
constitute any kind of limitation on the City's right to terminate this Franchise for other reasons as
provided by and in accordance with this Franchise; provided, however, that Company may not
abandon its Facilities or discontinue its Gas services in the City without the approval of the
Commission or successor agency or other regulatory authority with jurisdiction, if such action
without such approval is prohibited at the time by applicable federal or state law or regulation.
14.2.2. Legal Action Against Company; Attorney Fees.
Upon the occurrence of an Uncured Default, the City may commence against Company an action
at law for monetary damages or in equity for injunctive relief or specific performance of any of the
provisions of this Franchise which, as a matter of equity, are specifically enforceable. Company
agrees that if City is granted any relief for an action of an Uncured Default, Company is responsible
providing documentation of such fees to the Company.
15. PROVISION OF INFORMATION.
15.l. Filings with the Commission.
Company shall provide copies to the City of all documents which Company files with or sends to
the Commission concerning or related to its provision of Gas to Customers or other operations in
the City, including, but not limited to, filings related to (i) tariffs; (ii) rules, regulations and policies
requested, under consideration or approved by the Commission; and (iii) applications and any
supporting pre-filed testimony and exhibits filed by Company or third parties on behalf of
Company, on the same date as such filings are made with the Commission. In addition, Company
shall provide the City with copies of records, documents and other filings related to its provision
of Gas to Customers or other operations in the City that Company is required to maintain or supply
to the Commission under the Texas Utilities Code and any other applicable state or federal law,
rule, or regulation. Confidential information of Company shall be provided to the City consistent
with the Commission's rules governing disclosure of such information to a regulatory authority.
15.2. Lawsuits or Claims.
Company shall provide the City with copies of all pleadings in all lawsuits, claims or proceedings
to which Company is a party and that pertain to the granting of this Franchise or the provision,
distribution, or transportation of Gas to Customers or other operations in the City within thirty (30)
days of Company's receipt of same.
16. COMPANY AS INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company shall operate as an independent contractor as
to all rights and privileges granted by this Franchise, and not as an agent, representative or
employee of the City. Company shall have the exclusive right to control the details of its business
and other operations necessary or appurtenant to the provision, distribution, or transportation of
Gas in accordance with the terms and conditions of this Franchise AND SHALL BE SOLELY
RESPONSIBLE FOR THE ACTS AND OMISSI
SERVANTS, EMPLOYEES, CONTRACTORS, AND SUBCONTRACTORS. COMPANY
ACKNOWLEDGES THAT THE DOCTRINE OF RESPONDEAT SUPERIOR SHALL NOT APPLY
AS BETWEEN THE CITY AND COMPANY, ITS OFFICERS, AGENTS, EMPLOYEES,
CONTRACTORS, AND SUBCONTRACTORS. Company further agrees that nothing herein shall
be construed as the creation of a partnership or joint enterprise between the City and Company.
17. NOTICES.
Notices required pursuant to the provisions of this Franchise shall be conclusively determined to
have been delivered when (i) hand-delivered to the other party, its agents, employees, servants, or
representatives, or (ii) received by the other party by United States Mail, postage prepaid, return
receipt requested.
To the City of Denton:
City Manager
City of Denton
215 E. McKinney St.
Denton, Texas 76201
City Attorney
City of Denton
215 E. McKinney St.
Denton, Texas 76201
To Company:
Universal Natural Gas, LLC (d/b/a Universal
Natural Gas, Inc.)
Attn: General Counsel
9950 Woodloch Forest Drive 22nd Floor
The Woodlands, TX 77380
18. NON-DISCRIMINATION COVENANT.
Company shall not discriminate against any Person on the basis of race, color, national origin
religion, handicap, sex, sexual orientation or familial status in the provision, distribution or
transportation of Gas; in the receipt of benefits from Company's business operations in the City; in
opportunities for employment with Company that Company may offer; or in the construction or
installation of Company's Facilities.
19. NO WAIVER
The failure of the City to insist upon the performance of any term or provision of this Franchise or
to exercise any rights that the City may have, either under this Franchise or the law, shall not
constitute a waiver of the City's right to insist upon appropriate performance or to assert any such
right on any future occasion.
20. GOVERNING LAW AND VENUE.
This Franchise shall be construed pursuant to and in accordance with the laws of the United States
of America, the State of Texas, and the City of Denton Charter and Code of Ordinances. Any action
at law or in equity, related to this Franchise, Company's provision, distribution or transportation of
Gas, or Company's use of the Public Rights-of-Way, venue for such action shall be exclusively in
the state courts located in Denton County. Texas or the United States District Court for the Eastern
District of Texas. Sherman Division.
21. CONFERENCES.
At the request of either the City or Company, the City and Company shall meet at reasonable times
and upon reasonable notice to discuss any aspect of this Franchise, Company's Facilities,
Company's operations in the City, Company's provision, distribution and transportation of Gas, or
Company's use of Public Rights-of-Way.
22. SEVERABILITY.
22.1. Except as provided in 22.2, if any provision of this Franchise is held to be invalid, illegal,
or unenforceable by a final order entered by a court of competent jurisdiction, or if any provisions
lawfully entered into on the Effective Date are later prohibited or invalidated by state or federal
law, the provisions of this Franchise shall be severable. The City and Company agree they shall
amend this Franchise to comply with such final order entered by a court of competent jurisdiction.
22.2. If Section 7.7 Relocation, which the City and Company agree is lawfully entered into on
the Effective Date of this Franchise, is held to be invalid, illegal, or unenforceable by a final order
entered by a court of competent jurisdiction, or if Section 7.7 Relocation is later prohibited or
invalidated by state or federal law, the City and Company agree this Franchise will terminate sixty
(60) days from such holding, finding, or effective date without any further action required by the
City or Company.
23. SURVIVAL.
The following provisions shall survive the termination of this Franchise Agreement:
Section 11- Insurance
Section 10.3- Indemnity
Section 4- Fees and Payment
Section 7.2- Permits; Right-of-Way Requirements
24. FORCE MAJEURE.
In the event Company's performance of any of the terms, conditions or obligations required by this
Franchise is prevented by a cause or event that is not within Company's reasonable control,
Company's non-performance shall be deemed excused for the period of such inability. Causes or
events that are not within the Company's control shall include, but not be limited to, acts of God,
weather, action or inaction of regulatory bodies, strikes, sabotage, riots or civil disturbances, failure
or loss of utilities, explosions, and natural disasters.
EXHIBIT A
FRANCHISE AREA MAP
EXHIBITBACKNOWLEDGEMENT OF SIGNATURE ON BEHALF OF UNIVERSAL NATURAL GAS,LLC STATE OF TEXAS COUNTY OF DENTON §§ BEFORE ME, the undersigned authority, on this day personally appeared Richard Bard, SVPEngineering and Construction, known to me to be the person whose name is signed to thisFranchise Agreement. Richard Bard acknowledged that he is authorized to sign this Agreement,that his signature is binding to Universal Natural Gas, LLC and that he did sign this FranchiseAgreement for the purposes and considerations expressed in the Franchise Agreement. Given my hand and seal of office this \ 0 day of t.fc,_-eMber(Personalized Seal) For Denton City Secretary Use:Filed with the Office of City Secretary on: I.;! / 1 I { do J.5Received by: � ,g ri'<L R.e_;i: . c.a'J-�r [NAME and TITLE] ,2025.RECEIVED
UEC 1 .1 2025
City Secretarys 0fflce
City Secretary
Subject:FW: Universal Natural Gas Franchise Agreement - Ordinance No. 25-1546
Attachments:City of Denton Franchise Agreement ORD 25-1546_UniGas signed 12.10.25.pdf
From: City Secretary <City.Secretary@cityofdenton.com>
Sent: Thursday, December 11, 2025 11:46 AM
To: CSO Group <CSOGroup@cityofdenton.com>
Subject: FW: Universal Natural Gas Franchise Agreement - Ordinance No. 25-1546
Received
Ingrid Rex | City Secretary
Office of the City Secretary (940) 349-8303
ATTENTION: All correspondence may be considered a public record and made available upon a Public Information Request.
PUBLIC OFFICIALS: A "Reply to All" of this e-mail may lead to violations of the Texas Open Meetings Act.
NOTE: This electronic message is confidential and is intended only for the use of the individual to whom it is addressed. The information may also be legally
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notified that any use, dissemination, distribution or reproduction of this transmission is strictly prohibited. If you are not the intended recipient, please immediately
notify me by electronic message or telephone at 940.349.7735, and delete the message from your system.
From: Hayley Cunningham <hayley.cunningham@centric-us.com>
Sent: Thursday, December 11, 2025 9:50 AM
To: City Secretary <City.Secretary@cityofdenton.com>
Cc: Rosendahl, Charlie <Charlie.Rosendahl@cityofdenton.com>; Richard Bard <richard.bard@centric-us.com>
Subject: Universal Natural Gas Franchise Agreement - Ordinance No. 25-1546
Good morning-
Please accept this email as Universal Natural Gas’ formal written statement of acceptance of the City of Denton’s Franchise
Agreement. The signed agreement and Exhibit B are attached for your records.
We appreciate the opportunity to serve the City of Denton and look forward to working with you.
Best,
Hayley
Hayley Cunningham
Director, Rates and Regulatory Affairs
CENTRIC
D: (281) 220-6805
hayley.cunningham@centric-us.com
www.centric-us.com
This email, including any attachments, is intended only for the use of the individual or entity to which it is addressed and may contain information that is privileged, confidential,
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your system.
EXHIBIT C
Initial Rates
10B Saturday, December 13, 2025 dentonrc.com || Denton Record-Chronicle
ORDINANCE NO. 25-1546
AN ORDINANCE OF THE CITY OF DENTON BY THREE SEPARATE VOTES, EACH BEING
CONDUCTED ON SEPTEMBER 16, 2025, OCTOBER 21, 2025, AND DECEMBER 2, 2025,
GRANTING A NONEXCLUSIVE GAS FRANCHISE TO UNIVERSAL NATURAL GAS, LLC, FOR
USE OF PUBLIC RIGHTS-OF-WAY IN A DESIGNATED AREA IN THE CITY OF DENTON FOR
THE PURPOSE OF CONSTRUCTING, MAINTAINING AND OPERATING A SYSTEM OF PIPE-
LINES AND OTHER FACILITIES FOR THE PROVISION, TRANSPORTATION, DISTRIBUTION
AND CONVEYANCE OF GAS TO CUSTOMERS IN SUCH DESIGNATED AREA; AUTHORIZ-
ING EXECUTION OF A FRANCHISE AGREEMENT BETWEEN THE CITY OF DENTON AND
UNIVERSAL NATURAL GAS, LLC, PROVIDING FOR COMPENSATION TO THE CITY FOR
THE USE OF THE PUBLIC RIGHTS-OF-WAYS, PROVIDING TERMS, CONDITIONS AND RE-
QUIREMENTS RELATED TO THE USE OF PUBLIC RIGHTS-OF-WAY IN THE CITY OF DEN-
TON AND TO THE CONSTRUCTION, MAINTENANCE AND OPERATION OF PIPELINES AND
OTHER FACILITIES FOR THE PROVISION, DISTRIBUTION AND TRANSPORTATION OF GAS
TO CUSTOMERS IN THE DESIGNATED AREA OF THE CITY OF DENTON; PROVIDING FOR
PUBLICATION; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, Chapter 121 of the Texas Utilities Code authorizes municipalities to adopt
ordinances that establish conditions for mapping, inventorying, locating, or relocating pipelines
over, under, along, or across a public street or alley or private residential area within the bound-
aries of the municipality and establish conditions for mapping or taking an inventory in an area in
a municipality’s extraterritorial jurisdiction; and
WHEREAS, Chapter 121 of the Texas Utilities Code states that except as expressly
provided in Chapter 121, subchapter E. of that Chapter does not reduce, limit, or impair a power
vested by law in a municipality; and
WHEREAS, the Texas Railroad Commission (Commission) is the state agency with pri-
mary regulatory jurisdiction over the oil and natural gas industry, pipeline transporters, natural
gas and hazardous liquid pipeline industry, natural gas utilities, the LP-gas industry as well as
several other areas; and
WHEREAS, the Commission does not have jurisdiction over, and exercises no regula-
tory authority with respect to, private or public roads or road use. Permits issued by the Com-
mission for oil and gas exploration, production and waste disposal do not limit any independent
authority of a municipality, county, or other state agencies with respect to road use; and
WHEREAS, subject to Gas Utility Regulatory Act (Chapter 33 of the Texas Utilities
Code) limitations, a municipality has exclusive original jurisdiction over the rates, operations, and
services of a gas utility within the municipality in order to provide fair, just, and reasonable rates
and adequate and efficient services; and
WHEREAS, the Texas Transportation Code provides that a home rule city has exclusive
control over and under the public highways, streets, and alleys of the City, including the ability to
control, regulate, or remove an encroachment or obstruction on a street, open or change a public
street, and make improvements to a public highway, street, or alley of the municipality.
WHEREAS, Article XIII of the Denton City Charter entitled Franchises, provides the City
Council may by ordinance grant, renew and extend all franchises of all public utilities operating
within the City for a maximum term of 20 years; and
WHEREAS, the Denton City Charter requires an ordinance granting, amending, renew-
ing, or extending a public utility franchise be passed by a majority vote of the entire City Council
at three (3) regular meetings of the City Council; and
WHEREAS, a public utility franchise ordinance must be published once each week for
three (3) consecutive weeks in the official newspaper at the expense of the franchisee in order
to take effect thirty (30) days after its final passage, however, such ordinance shall be subject to
referendum as provided in Article IV of the Denton City Charter; and
WHEREAS, the Denton City Charter provides the City Council has the power and duty to
determine and regulate the charges, fares or rates of all public utilities operating within the City,
require franchise holders to reimburse the City for reasonable expenses related to advising the
council on requested rate increases, prescribe reasonable standards of service and quality fur-
nished by each utility, prevent unjust discrimination, require certain actions as may be necessary
to provide adequate and efficient service, collect from every public utility operating in the City its
fair and just proportion of certain expenses related to the occupation and use of the public rights
of-ways or compel such public utility to perform, at its own expense, its just share of those activi-
ties requiring the expenses, and such other prescriptions and regulations provided by the Denton
City Charter and that the City of Denton deems desirable or conducive to the safety, welfare and
accommodation of the public, or to enforce franchise agreement provisions; and
WHEREAS, the Denton City Charter provides the City of Denton shall have power to
prohibit certain uses of the public rights-of-way and that any public utility franchise hereafter
granted shall be held subject to all of the terms and conditions contained in the various sections
of Article XIII of the Denton City Charter whether or not such terms are specifically mentioned in
the franchise agreement; and
WHEREAS, the provisions of the Denton City Charter shall not limit in any way the dis-
cretion of the council in imposing such terms and conditions as may be reasonable in connection
with any franchise grant; and
WHEREAS, Universal Natural Gas, LLC, a Texas limited liability company, (“Company”)
wishes to construct a system of pipelines and other facilities for the distribution and provision of
gas and to distribute and provide gas to customers in a designated area within the City of Denton,
and Company has applied for a franchise from the City in order to carry out those purposes; and
WHEREAS, the Company has agreed to extend services to a City of Denton owned parcel
identified by the Denton County Appraisal District as Property ID 64578 and commonly referred
to as Southwest Park; and
WHEREAS, The City of Denton (“City”) has reviewed Company’s request to enter into a
franchise agreement and determined that the granting of a franchise on the terms and condi-
tions set forth in the Franchise Agreement attached hereto, will assist in meeting the needs of
gas by customers in the City.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DENTON,
TEXAS:
Section 1. The recitals set forth above are found to be true and correct legislative and factual
determinations of the City of Denton and are hereby approved and incorporated into the body of
this Ordinance and made a part hereof for all purposes as if fully set forth herein.
Section 2. The City hereby grants Company a franchise to construct, install, maintain and repair
a system of pipelines and other facilities for the provision, distribution and transportation of gas
in, over, under, along and across designated public rights-of-way of the City and to transact
business related to the provision of gas through that system of pipelines and facilities, subject to
the Franchise Agreement substantially in the form attached hereto as Exhibit I, which is hereby
incorporated and made a part of this Ordinance for all purposes.
Section 3. In accordance with and as required by Section 13.06 of the Denton City Charter, the
City Secretary shall compile and maintain a public record of all franchises heretofore or hereafter
granted by the City of Denton.
Section 4. 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.
Section 5. This ordinance shall be in full force and effect following (i) thirty days after final pas-
sage; and (ii) its publication for franchises in accordance with the Denton City Charter.
Section 6. The Franchise Agreement shall be in full force and effect after Company files with
the City Secretary its written statement of acceptance of the Franchise Agreement within sixty
(60) calendar days after the passage and approval by City in accordance with the terms of the
Franchise Agreement, and the Parties execute the Franchise Agreement.
EXHIBIT 1
FRANCHISE AGREEMENT
A. The City Council of the City of Denton has adopted an ordinance that grants Universal
Natural Gas, LLC (Company) a franchise to construct, install, maintain and repair a system of
Facilities as that term is defined herein, for the provision, distribution and transportation of natural
Gas, as defined herein, in, over, under, along and across the public rights-of-way in the City of
Denton and to transact business related to the provision, distribution and transportation of Gas
through such Facilities (“Franchise Ordinance”) subject to the execution by Company.
B. In accordance with the Franchise Ordinance, Company desires to enter into this Fran-
chise, hereinafter referred to as Franchise or Franchise Agreement and guarantees unconditional
performance of its duties and obligations under this Franchise.
C. Ordinance Number 25-1546, adopted on December 2, 2025, is incorporated into this
Franchise Agreement and made a part hereof for all purposes as if fully set forth herein.
D. The effective date of this Franchise is the date of execution by the Parties (“Effective
Date”).
Agreement
The recitals above are true and correct and are hereby incorporated into this Franchise Agree-
ment as if fully set forth herein.
1. DEFINITIONS
Capitalized terms used in this Franchise and not otherwise defined within this Franchise shall
have the following meanings:
Affiliate shall have the meaning stated in the Texas Utilities Code§§ 101.003 and 101.004.
Company shall mean Universal Natural Gas, LLC.
City shall mean the area within the corporate limits of the City of Denton, Texas and the govern-
ing body of the City of Denton, Texas.
Commission shall mean the Raiload Commission of the State of Texas or other authority suc-
ceeding to the regulatory powers of the Commission.
Customer shall mean any Person located, in whole or in part, within the City and that is or may
be served by Company under the terms of this Franchise.
Director shall mean the Director of the City’s Finance Department. or their designee.
Facilities shall mean all of Company’s property, whether real or personal, which is reasonably
necessary to provide, distribute or transport Gas into, within and through the City, including, but
not limited to, transmission and distribution pipes, mains, Gas compressors and meters.
Franchise shall mean the authorization issued to Company by the City for (i) the construction,
installation, maintenance, and repair of Company’s Facilities in, over, under, along and across
the Public Rights-of-Way in the area designated in Exhibit A (Franchise Area); (ii) the operation of
such Facilities for the provision, distribution and transportation of Gas; and (iii) any other related
uses of the Public Rights-of-Way, pursuant to and in accordance with the Franchise Ordinance
and this Franchise Agreement.
Gas shall mean gaseous fuels such as natural gas.
Gross Receipts shall mean all revenue derived or received, directly or indirectly, by Company
from or in connection with the operation of the Facilities within the corporate limits of the City and
including, without limitation:
(1) all revenues received by Company from the sale of Gas to all classes of Custom-
ers within the City; and
(2) all revenues received by Company from the transportation of Gas through the Fa-
cilities of Company within the City to Customers located within the City regardless of the origina-
tion of the gas within the Company’s Facilities; and
(3) the value of Gas transported by Company for Transport Customers through the
Facilities of Company within the City, with the value of such Gas to be reported by each Transport
Customer to Company, provided, however, that should a Transport Customer refuse to furnish
Company its Gas purchase price, Company shall estimate same by utilizing Company’s monthly
industrial weighted average cost of Gas, as reasonably near the time that the transportation
service is performed.
(4) Gross Receipts shall specifically include the following:
(A) Other revenues derived from the following charges:
(i) charges to connect, disconnect, or reconnect Gas within the City; and
(ii) charges to handle return checks from consumers within the City; and
(iii) such other service charges and charges as may, from time to time, be
authorized in the rates and charges required to be on file with the City; and
(iv) contributions in aid of construction (“CIAC”), which shall be calculated
and paid in accordance with Section 4.1.2 of this Franchise Agreement; and
(B) Revenues billed but not ultimately collected or received by Company; and
(C) Gross receipts fees.
(5) Gross Receipts shall not include:
(A) Revenue of any Person including, without limitation, an affiliate, to the extent
that such revenue is also included in Gross Revenues of Company; and
(B) Sales taxes; and
(C) Any interest income earned by Company; and
(D) All monies received from the lease or sale of real or personal property; pro-
vided, however, that this exclusion does not apply to the lease of Facilities located within a Public
Right-of-Way in the City.
Person shall mean, without limitation, an individual, a corporation, a limited liability company, a
general or limited partnership, a sole proprietorship, a joint venture, a business trust or any other
form of business entity or association.
Public Right-of-Way shall mean all dedicated public streets, highways, alleys and rights-of-way
in the City, but shall not include any property of the City that is not a dedicated public street,
highway, alley or right-of-way.
Transfer or Transferred shall mean (i) any form of sale, conveyance, assignment, lease, or sub-
lease of all or substantially all of Company’s Facilities within the City, or merger involving Com-
pany as to this Franchise or Company’s Facilities or (ii) any change in the effective control of
Company. The term Transfer includes (i) any change in limited partnership interests, non-man-
aging limited liability company interests, or non-voting stock representing thirty percent (30%)
or more of the equity interests in the entity in question and (ii) any option, right of conversion or
similar right to acquire interests constituting control without substantial additional consideration.
Transport Customer shall mean a customer that consumes Gas transported but not sold by
Company within the corporate limits of the City.
2. GRANT OF RIGHTS.
2.1. General Use of Public Rights-of-Way for Provision of Gas.
Subject to the terms and conditions set forth in this Franchise and the Denton City Charter and
ordinances, the City hereby grants Company the right to (i) erect, construct, install maintain and
operate Facilities in, over, under, along and across the Public Rights-of-Way in the Franchise
Area and (ii) furnish, transport, sell and distribute Gas to Customers in the Franchise Area. Com-
pany hereby acknowledges and agrees that this Franchise does not allow Company to provide
any goods or services other than Gas in or through the City and does not allow Company to
provide Gas in or through any part of the City other than the Franchise Area. Notwithstanding
any other provision herein, Company agrees any rights or privileges granted to Company herein
apply only in the Franchise Area.
2.2 Changes to Territorial Limits.
Company agrees that the territorial limits of the City are subject to expansion or reduction by
annexation and contraction of municipal boundaries and that Company has no vested right in a
specific area. If the Company provides Gas service to an area at the time that area is annexed
to the City, such Gas service by Company shall be provided under the same terms and condi-
tions of this Franchise. The parties agree to amend Exhibit A in the event the geographic area
applicable to this Franchise Agreement changes pursuant to this section. Such expansion or
reduction of the Franchise Area shall occur without further action by the City or Company except
written approval by the City Manager and an individual duly authorized to bind the Company. The
Company must revise its payments due to any expansion or reduction no later than thirty (30)
days after such boundary change is effective.
2.3. Nonexclusive.
2.3.1. This Franchise and all rights granted to Company herein are strictly nonexclusive. The
City reserves the right to grant other and future Gas franchises to other Persons in accordance
with applicable law and as the City deems appropriate. This Franchise does not establish any
priority for the use of the Public Rights-of-Way by Company or by any present or future franchi-
sees or other permit holders. In the event of any dispute as to the priority of use of the Public
Rights-of Way, the first priority shall be to the public generally, the second priority to the City in
the performance of its various functions, and thereafter, as between franchisees and other permit
holders, as determined by the City in the exercise of its powers, including the police power and
other powers reserved to and conferred on it by the State of Texas.
2.3.2. City reserves to itself the right and power at all times to exercise, in the interest of the
public and in accordance with state law, regulation and control of Company’s use of the Public
Rights of-Way to ensure the rendering of efficient public service and the maintenance of Compa-
ny’s System in good repair throughout the term of this Franchise.
2.3.3. City expressly reserves the right to own and operate its own system for the purpose of
transporting, delivering, distributing, or selling gas to and for the City and inhabitants thereof.
2.3.4. Nothing herein shall impair the right of City to fix, within constitutional and statutory
limits, a reasonable price to be charged for natural gas, or to provide and fix a scale of prices for
natural gas and other charges, to be charged by Company to residential consumers, commercial
consumers, industrial consumers or to other consumers, or any combination of such consumers,
within the territorial limits of the City as same now exists or as such limits may be extended from
time to time hereafter.
3. TERM
The term of this Franchise shall be for ten ( l 0) years and become effective on the Effective Date,
as established in the Franchise Ordinance, and shall expire at 11:59 P.M. CST ten (I 0) years from
the Effective Date (the “Term”). This Franchise and all rights of Company provided hereunder
shall automatically terminate upon the expiration of this Franchise. This Franchise Agreement
may be renewed for five (5) years upon mutual written consent of the City and Company, each
a “Renewal Term.” This Franchise Agreement may be renewed as many times as the City and
Company mutually agree.
4. FEES AND PAYMENTS TO CITY.
4.1 Franchise Fee.
Company shall pay the City throughout the term of this Franchise an amount equal to five percent
(5%) of Company’s Gross Receipts (“Franchise Fee”). If permitted by applicable law, following at
least thirty (30) days’ advance written notice to Company, the City may review and change the
amount of the Franchise Fee to the amount of the franchise fee applicable to all other Gas utilities
within the City by ordinance adopted by the City Council.
4.1.1. Confidential Information Regarding Transport Customers.
Company shall require each of its Transport Customers to disclose to Company on a quarterly
basis their aggregate purchase prices of Gas transported through Company’s Facilities. If Com-
pany submits any documents to the City that are related to disclosures made to Company by
any of its Transport Customers, Company may remove from such documents any information
that would disclose either the identity of the Transport Customer or other information deemed
confidential by Company, provided that any such removal does not prevent the City from its
determining any Transport Customer’s purchase prices of Gas transported through Company’s
Facilities. In order for the City to verify the accuracy of information provided by Company, Compa-
ny shall, at the City’s written request, give the City access to any information deemed confidential
by Company and that was removed by Company in documents provided to the City.
4.1.2. Due Date of Franchise Fee.
Except for Franchise Fee amounts that are based on CIAC, Company shall pay the Franchise
Fee to the City on a calendar quarterly basis. The Franchise Fee shall be due within forty-five
(45) days following the last day of each quarter. The Franchise Fee amounts based on CIAC
shall be calculated on an annual calendar year basis, i.e., from January 1 through December 31
of each calendar year. The Franchise Fee amounts that are due based on CIAC shall be paid at
least once annually, on or before April 30 of each year, based on the total CIAC recorded during
the preceding calendar year.
4.1.3. Effect of Other Municipalities’ Fees Accepted and Paid by Company.
Company agrees the percentage amount of the Franchise Fee provided for herein to the City
of Denton is equal to or is a greater percentage of the Franchise Fee agreed to by Company or
provided for in any other similar Gas municipal franchise, which includes any franchise ordinance
or agreement.
Company further agrees that where terms or provisions related to all fees, costs, pass-throughs,
taxes etc. (“Payment”) are not included in the Franchise Fee are provided to other municipalities
in similar Gas franchises and that are more favorable than those provided to the City, then the
Payment to be paid by Company to the City pursuant to this Franchise Agreement shall be in-
creased without any further action required or taken by the City so that the amount due and to
be paid hereunder is proportionally equal to the amount that would be due and payable to the
City were the franchise fee provisions of that other similar municipal franchise applied to the City.
If Company should at any time after the Effective Date hereof agree to a new similar municipal
franchise or renew a similar existing municipal franchise ordinance with another municipality and
the franchise fee owed to that municipality for the use of its public rights-of-way would, if applied
to the City, result in a Franchise Fee greater than the amount otherwise due the City under this
Franchise Agreement, then the Franchise Fee to be paid by Company to the City pursuant to this
Franchise Agreement shall be increased without any further action required or taken by the City
so that the amount due and to be paid hereunder is equal to the amount that would be due and
payable to the City were the franchise fee provisions of that other municipal franchise applied to
the City. The Company shall also notify the City of the change pursuant to the notification provi-
sions herein. The provisions of this Section 4.1.3 apply only to the amount of the Franchise Fee
to be paid to the City and do not apply to other payment provisions, including, without limitation,
the timing of such payments.
4.1.4. Accompanying Report.
Company shall submit with its Franchise Fee payment a written report in a form acceptable to
the City and verified by an officer of the Company that summarizes Company’s Gross Receipts,
including but not limited to, its gross revenues for the preceding calendar quarter upon which
franchise fees are calculated, including the amount of revenues received by Company for the
transportation of gas; (ii) the coded identity of Company’s Transport Customers during the pre-
ceding calendar quarter; and (iii) the cost, volume, and transport fee of Gas transported during
the preceding calendar quarter for such Transport Customers.
4.1.5. Audits.
The City may audit Company at any time to verify the accuracy of Franchise Fees paid to the City
for the prior four (4) years. Company shall pay any additional amounts due the City as reported
in any City audit within thirty (30) days following the City’s submission to Company of an invoice
for such sum, provided that the City Council shall afford Company a fair hearing with reference
to the audit and shall either approve or disapprove the results of the audit or make such order
as may be reasonable. The City and Company may compel the attendance of witnesses and the
production of books and other records in order to assist the City Council in its decisions relating
to the accuracy of the Franchise Fees paid to the City. If the additional amount due exceeds ten
percent (10%) of the Franchise Fee which the audit shows should have been paid to the City for
the period in which the audit covered, Company shall pay the City’s costs for the audit. Other-
wise, the City shall pay its own costs for the audit.
4.1.6. Other Obligations.
In addition to the Franchise Fee, Company shall pay the City all sums which may be due the City
for property taxes, license fees, permit fees, or other taxes, charges, or fees that the City may
from time to time impose on all other Gas utilities within the City. Company shall be responsible
for publication of this Franchise as required by the Denton City Charter. The City may require the
funds prior to publication, or may invoice the Company for reimbursement.
4.2. Interest.
All sums not paid when due shall bear interest at the rate of ten percent (10%) per annum or
the maximum amount allowed by law, whichever is less, computed monthly. If such outstanding
sums are paid with interest within thirty (30) days following their respective due dates, Compa-
ny’s failure to pay such sums by their respective due dates shall not, in and of itself, constitute an
Event of Default under Section 13 of this Franchise.
4.4. Tariff Recovery
City agrees (i) to the extent the City acts as regulatory authority, to adopt and approve that por-
tion of any tariff which provides for one hundred percent (100%) recovery of the franchise fee on
Discretionary Service Charges; (ii) in the event the City intervenes in any regulatory proceeding
before a federal or state agency in which the recovery of the franchise fees on such Discretionary
Service Charges is an issue, the City will take an affirmative position supporting the I 00% recov-
ery of such franchise fees by Company and; (iii) 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. City agrees that it
will take no action, nor cause any other person or entity to take any action, to prohibit the recov-
ery of such franchise fees by Company. The City is not required to intervene in any proceeding,
and is also not required to expend any funds in order to comply with this section.
5. REGULATORY AUTHORITY OF THE CITY.
5.1. Rates.
A. The City Council hereby expressly reserves the full right, power, and authority to regu-
late and establish the rates and charges for Company’s provision, distribution and transportation
of Gas and any other services of Company, as provided by and in accordance with Texas law and
the Denton City Charter. Company may from time to time propose changes in its general rates
by filing an application with the City Secretary for consideration by the City Council. Within a rea-
sonable time consistent with applicable law, the City Council shall afford Company a fair hearing
with reference to the application and shall either approve or disapprove the proposed changes
or make such order as may be reasonable. The City shall have the full power and authority to
inspect, or cause to be inspected, Company’s books and to inventory and appraise, or cause
to be inventoried and appraised, Company’s Facilities and other real and personal property. In
addition, the City may compel the attendance of witnesses and the production of Company’s
books and other records in order to assist the City Council in its decisions relating to the City’s
rate regulatory authority.
B. The Company agrees to initially establish the rates and charges as described in Exhibit
C. Future changes to these rates will be governed by Section 5.l(A) and (B).
C. The Grantee shall have the right to make and enforce such reasonable rules and regu-
lations as it may deem necessary for the extension of its facilities, the sale of its gas and the con-
duct of its business, provided that such rules and regulations comply with the laws of the State of
Texas, the ordinances and regulations of the Grantor, the provisions of this Franchise, and with
the applicable orders, rules or regulations of the Railroad Commission of Texas where such RRC
orders, rules and regulations are consistent with the three items first listed in this sentence.
5.2. Other Matters.
Company’s property and operations hereunder shall be subject to such regulation by the City
as may be reasonably necessary for the protection or benefit of the general public. In this con-
nection, Company shall be subject to, governed by and shall comply with all applicable federal,
state, and local laws, including all ordinances, rules, and regulations of the City, as same may be
adopted and amended from time to time.
5.3. Regulatory Expenses.
Company agrees that City may, at any time during the term of this Franchise, employ at the ex-
pense of Company expert assistance and advice in determining fair, just, and reasonable rates
to be charged by Company to its consumers in the City, and in determining the extent to which
Company is complying with the terms and conditions of this Franchise Ordinance. In the manner
requested by the City, Company agrees to pay reasonable expenses in connection therewith, or
reimburse City for the same.
6. RECORDKEEPING AND ACCOUNTING.
Company shall keep complete and accurate books of accounts and records of its business and
operations in the City pursuant to this Franchise as required by the Commission and in accor-
dance with state and federal law, of accounts and in a manner that will allow the City to determine
investment, cost of service and operating expenses related to Company’s provision of Gas to
Customers and transportation of Gas to Transport Customers. The City may require the keeping
of additional records or accounts which are reasonably necessary for purposes of identifying,
accounting for and reporting receipts, uncollectible accounts, and expenses or otherwise reason-
ably necessary for the administration of this Franchise. The City shall have the right to inspect at
reasonable times the plant, equipment and other property of Company and its Affiliates (but only
to the extent that the Affiliate’s plant, equipment or other property relates to Company’s provision
of Gas to Customers or transportation of Gas to Transport Customers) in accordance with appli-
cable law and to examine, audit and obtain copies of the papers, books, accounts, documents
and other business records of Company pertaining to its business and operations in the City.
7. USE OF PUBLIC RIGHTS-OF-WAY.
7.1. City’s Right-of-Way
7.1.1. Company acknowledges and agrees the City has the right to control and regulate the
use of the Public Rights-of-Way, public places and other City-owned property and the spaces
above and beneath them.
7.1.2. The City has and reserves the right to lay, and permit to be laid, storm, sewer, gas,
water, wastewater, and other pipe, lines, cables, and conduits, or other improvements and to do
and permit to be done any underground or overhead work that may be necessary or proper as
determined by the City in, across, along, over, or under Public Rights-of-Way occupied by Com-
pany. The City also reserves the right to change in any manner any curb, sidewalk, highway, alley,
public way, street, utility lines, storm sewers, drainage basins, ditches, and the like as necessary
or proper as determined by the City.
7.2 Permits: Right-of-Way Requirements.
7.2.1. This Franchise does not relieve Company of any obligation to obtain permits, licenses,
and other approvals from the City necessary for the construction, installation, maintenance or
repair of Company’s Facilities or the provision, distribution, or transportation of Gas through such
Facilities.
7.2.2. Company agrees it must comply with the City Denton Charter and City of Denton, Texas
Code of Ordinances, Chapter 25, Article II, Construction and Repair, Division 3. Right-of-Way
Construction Management, as amended (ROW Ordinance), except where the requirements on
Company in this Franchise Agreement are more stringent than those in the ROW Ordinance. A
violation of the ROW Ordinance constitutes a breach of this Franchise.
7.3. No Undue Burden.
Company’s Facilities shall not be erected, installed, constructed, repaired, replaced, or main-
tained in any manner that places an undue burden on the present or future use of the Public
Rights-of Way by the City and the public. If the City reasonably determines that any of Company’s
Facilities do place an undue burden on a portion of the Public Rights-of-Way, Company, at Com-
pany’s sole cost and expense and within a reasonable time period specified by the City, shall
modify the Facilities or take other actions determined by the City to be in the public interest to
remove or alleviate the burden.
7.4 Minimal Interference.
Company shall not unreasonably interfere with traffic over streets, alleys, and highways. Compa-
ny’s operations and activities within the Public Rights-of-Way in the City.
7.5 Marking of Facilities.
Company’s Facilities shall be clearly marked in a manner to show conspicuously Company’s
name and a toll-free telephone number of Company that a Person may call for assistance. The
markings and their placement shall be in compliance with all applicable law regarding marking,
labeling and notice, and shall be placed in a manner to ensure public safety, and to prevent acci-
dental damage such as during construction, maintenance or operations activity.
7.6. Emergency Work by the City
The City shall have the right to sever, disrupt, remove, relocate, damage or destroy any of Com-
pany’s Facilities without any prior notice and at no liability to the City if such action is deemed
necessary by the City Manager, Mayor, Police Chief or Fire Chief or their authorized represen-
tatives due to a public emergency. For purposes of this Section 7.9.1, a public emergency shall
be any condition which, in the opinion of the officials specified herein, poses an immediate threat
to life, health or property and is caused by any natural or man-made disaster, including, but not
limited to, storms, floods, fires, accidents, explosion, water main breaks and hazardous materials
spills. Company, at Company’s sole cost and expense, shall be responsible for the repair, reloca-
tion or reconstruction of any of its Facilities that are affected by such action of the City.
7.7 Relocation.
In the event Company’s Facilities must be relocated for any reason, Company acknowledges
and agrees it is responsible for all costs for such relocation, and that Company must comply
with the applicable provisions related to relocation in Chapter 25 in the City of Denton Code of
Ordinances.
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8. CUSTOMER SERVICE AND CONSUMER PROTECTION.
8.1. General Standards.
Company shall comply with the more stringent of the Customer service and consumer protection
provisions of (i) this Franchise Agreement and any applicable ordinance of the City or (ii) Chap-
ters 182 and 183 of the Texas Utilities Code and Title 16, Chapter 7, Sub-chapter D of the Texas
Administrative Code, as such provisions exist or are amended or re-codified during the term of
this Franchise Agreement.
8.2 Dependable Service and Reasonable Rates.
Company shall take all reasonable and necessary steps to assure a dependable supply of Gas
to Customers at the lowest reasonable cost consistent with long-term reliable supplies and in
a manner that may be prescribed from time to time by appropriate state and local authorities.
8.3. New Service.
8.3.1. Extension of Facilities: Duty to Serve.
If a Customer requests Company t0 provide Customer with Gas to a property within the Fran-
chise Area, Company shall promptly comply with this request as provided by this Section 8.3. In
extending the provision of its services to a new Customer within the Franchise Area, Company
shall extend its mains and other Facilities in the Public Rights-of-Way necessary to provide Gas to
such Customer up to one hundred (100) feet without cost to that Customer. Otherwise, Company
shall have the right to contract with a Customer in regard to the installation of and payment for any
Facilities necessary to connect the Customer’s premises with Company’s Facilities in the Public
Rights-of-Way. Company shall not be required to extend its mains or other Facilities in the Public
Rights-of-Way more than one hundred (100) feet to serve any one Customer.
8.3.2 Extension of Facilities to City-owned Property.
As a condition of this Franchise Agreement, the Company agrees to extend services at the Com-
pany’s sole cost to a City-owned property identified by the Denton County Appraisal District
as property identification number 64578, known commonly as Southwest Park. The Company
agrees to extend these services to the Southwest Park and make these services available to the
City at the same time and in the same manner the services are available to the adjacent property
in Hunter Ranch Municipal Management District. The Parties agree Southwest Park is included
in the Franchise Area.
8.4 Ownership of Facilities.
Company shall own, operate, and maintain all supply lines extending from Company’s main in
the Public Right-of-Way to a Customer’s meter, including the meter itself. A Customer shall own,
operate, and maintain all underground supply lines extending from the point of connection with
the meter for that Customer to the point of connection with the piping for that Customer’s dwelling
or structure.
8.5 Customer Notifications
Company shall provide new Customers or any existing or potential Customer upon request with
written information on Company’s installation and service policies and billing and complaint pro-
cedures, which include a toll-free telephone number that a Customer may call for information,
assistance, or complaint resolution. In the event that the rules and regulations governing annual
notification are changed by statute or appropriate regulatory authority, Company reserves the
right to substitute such information for the information set forth in this paragraph.
8.6. Bills.
8.6.1. Format
Company’s bills to its Customers shall be issued monthly to each Customer with a balance due.
Bills shall be clear, concise, and understandable. Bills shall be fully itemized and clearly delineate
all activity during the billing period, including optional charges, rebates, credits, and late charges.
Each bill shall prominently display Company’s contact information, including messaging, and
local or toll-free telephone numbers available for use by Customers.
8.6.2. Complaints and Dispute
Company shall respond in writing to all written complaints from Customers regarding billing mat-
ters within thirty (30) days of receipt. Company shall not disconnect a Customer for failure to pay
contested charges during a billing dispute,
9. REPORTS TO CITY.
9.6. Annual Statement.
Company shall make available for inspection by the City all annual reports filed with the Commis-
sion or successor agency covering the operation of Company within the City. The City shall have
the right to require Company to submit reasonable information regarding Company’s properties
and expenses related to Company’s Facilities and operations in the City that may not be included
in such reports, including, but not limited to, a fiscal year-end balance sheet, an income statement
covering the results of operations for the respective fiscal year, a statement of retained earnings
for the year and a statement of cash flows, all of which the City may require to be audited by an
independent certified public accountant acceptable to the City and the Company and to include
a statement to that effect by the certified public accountant.
9.7. Construction-Related Reports.
Within fifteen (15) calendar days following the start of each calendar quarter, Company shall pro-
vide the City a written report in a form acceptable to the Director of Capital Projects that outlines
Company’s plans for construction in the Public Rights-of-Way for the forthcoming eight
(8) calendar quarters.
9.8. Other Reports.
Company shall report to the City such other information relating to Company as the City may rea-
sonably consider useful and shall comply with the City’s preference for the form of such reports,
the time for such reports and the frequency with which such reports are to be made.
10. LIABILITY AND INDEMNIFICATION.
I 0.1. Liability of Company.
COMPANY SHALL BE LIABLE AND RESPONSIBLE FOR ANY AND ALL PROPERTY LOSS,
PROPERTY DAMAGE OR PERSONAL INJURY INCLUDING DEATH, TO ANY AND ALL PER-
SONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING FROM
THE CONSTRUCTION, INSTALLATION, MAINTENANCE OR REPAIR OF COMPANY’S FACIL-
ITIES, THE PROVISION, DISTRIBUTION OR TRANSPORTATION OF GAS IN OR THROUGH
THE CITY OR ANY OTHER USE OF THE PUBLIC RIGHTS-OF-WAY BY COMPANY, ITS OFFI-
CERS, AGENTS, SERVANTS, EMPLOYEE CONTRACTORS AND SUBCONTRACTORS.
10.2. Disclaimer of Liability.
THE CITY SHALL NOT AT ANY TIME BE LIABLE FOR ANY INJURY OR DAMAGE OCCUR-
RING TO ANY PERSON OR PROPERTY FROM ANY CAUSE WHATSOEVER THAT ARISES
OUT OF THE CONSTRUCTION, MAINTENANCE, REPAIR, USE, OPERATION, CONDITION
OR DISMANTLING OF COMPANY’S FACILITIES OR COMPANY’S DISTRIBUTION, PROVI-
SION OR TRANSPORTATION OF GAS, EXCEPT TO THE EXTENT DIRECTLY CAUSED BY
THE NEGLIGENT ACT(S) OR OMISSION(S) OR INTENTIONAL MISCONDUCT OF THE CITY.
10.3. Indemnification.
COMPANY, AT COMPANY’S SOLE COST AND EXPENSE, SHALL INDEMNIFY AND HOLD
HARMLESS THE CITY, ITS OFFICERS, BOARDS, COMMISSIONS, AGENTS, EMPLOYEES
AND VOLUNTEERS (“INDEMNITEES’’), FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, DAMAGES, PENALTIES, CLAIMS, LIENS, COSTS, CHARGES, LOSSES
AND EXPENSES, WHETHER LEGAL OR EQUITABLE, WHICH MAY BE IMPOSED UPON, IN-
CURRED BY OR ASSERTED AGAINST ANY INDEMNITEES BY REASON OF ANY PERSONAL
INJURY OR PROPERTY DAMAGE OR ANY ACT OR OMISSION OF COMPANY, ITS PERSON-
NEL, EMPLOYEES, OFFICERS, AGENTS, CONTRACTORS OR SUBCONTRACTORS WHICH
MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH
(I) THE CONSTRUCTION, INSTALLATION, OPERATION, MAINTENANCE OR CONDITION
OF COMPANY’S FACILITIES; (II) THE PROVISION, DISTRIBUTION OR TRANSPORTATION
OF GAS THROUGH COMPANY’S FACILITIES; (Ill) ANY CLAIM OR LIEN ARISING OUT OF
WORK, LABOR, MATERIALS OR SUPPLIES PROVIDED OR SUPPLIED TO COMPANY, ITS
CONTRACTORS OR SUBCONTRACTORS; OR (IV) COMPANY’S FAILURE TO COMPLY WITH
ANY FEDERAL, STATE OR LOCAL LAW, ORDINANCE, FRANCHISE, RULE OR REGULATION
10.4. Assumption of Risk.
COMPANY HEREBY UNDERTAKES AND ASSUMES, FOR AND ON BEHALF OF COMPANY,
ITS OFFICERS, AGENTS, CONTRACTORS, SUBCONTRACTORS AND EMPLOYEES, ALL
RISK OF DANGEROUS CONDITIONS, IF ANY, ON OR ABOUT ANY CITY-OWNED OR CITY
CONTROLLED PROPERTY, INCLUDING, BUT NOT LIMITED TO, THE PUBLIC RIGHTS-OF
WAY. IN ADDITION, COMPANY HEREBY AGREES TO AND SHALL INDEMNIFY AND HOLD
HARMLESS ANY INDEMNITEE AGAINST AND FROM ANY CLAIM ASSERTED OR LIABILITY
IMPOSED UPON ANY INDEMNITEE FOR ANY PERSONAL INJURY OR PROPERTY DAM-
AGE INCURRED OR ASSERTED BY COMPANY OR ANY OF ITS PERSONNEL, EMPLOYEES,
OFFICERS AGENTS, SERVANTS, CONTRACTORS OR SUBCONTRACTORS, AND ARISING
FROM THE INSTALLATION, OPERATION, MAINTENANCE OR CONDITION OF FACILITIES,
EXCEPT TO THE EXTENT CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OR INTEN-
TIONAL MISCONDUCT OF THE CITY.
10.5. Defense of Indemnities.
IN THE EVENT ANY ACTION, LAWSUIT OR OTHER PROCEEDING IS BROUGHT AGAINST
ANY INDEMNITEE BY REASON OF ANY MATTER FOR WHICH THE INDEMNITEES ARE IN-
DEMNIFIED HEREUNDER, THE CITY SHALL GIVE COMPANY PROMPT WRITTEN NOTICE
OF THE MAKING OF ANY CLAIM OR COMMENCEMENT OF ANY SUCH ACTION, LAW-
SUIT OR OTHER PROCEEDING, AND COMPANY, AT COMPANY’S SOLE COST AND EX-
PENSE, SHALL RESIST AND DEFEND THE SAME WITH REASONABLE PARTICIPATION
BY THE CITY AND WITH LEGAL COUNSEL SELECTED BY COMPANY, AND SPECIFICALLY
APPROVED BY THE CITY. IN SUCH AN EVENT, COMPANY SHALL NOT ADMIT LIABILITY
IN ANY MATTER ON BEHALF OF ANY INDEMNITEE WITHOUT THE ADVANCE WRITTEN
CONSENT OF THE CITY.
COMPANY SHALL RETAIN COUNSEL SPECIFICALLY APPROVED BY THE CITY WITHIN 3
BUSINESS DAYS FROM THE DATE COMPANY IS AWARE AN ACTION, LAWSUIT OR OTHER
PROCEEDING IS BROUGHT AGAINST THE CITY, EXCEPT THAT CITY MAY CONSENT TO A
LONGER PERIOD TO RETAIN COUNSEL WHERE SUCH LONGER PERIOD DOES NOT JEOP-
ARDIZE THE CITY’S ABILITY TO ACT IN ITS INTEREST AS TO SUCH ACTION, LAWSUIT OR
OTHER PROCEEDING.
11. INSURANCE .
Company shall, at its sole cost and expense, procure and maintain at all times, in full force
and effect, throughout the term of this Franchise, a policy or policies of insurance to provide FRYHUDJHVDVVSHFLƂHGKHUHLQDQGLQDFFRUGDQFHZLWK6HFWLRQDVDPHQGHGRIWKH
City of Denton Code of Ordinances, naming the City as an additional insured to cover all
risks related to the use, occupancy, condition, maintenance, existence or location of the
Public Rights-of-Way and the construction, installation, operation, maintenance or condition
of its Facilities.
11.1. Primary Liability Insurance Coverage.
• Commercial General Liability:
$1,000,000 per occurrence for Bodily Injury and Property Damage Liability except Worker’s Com-
pensation, including coverage for the following where exposure exists and as directed by the
City’s Risk Manager: (i) Premises Liability; (ii) independent contractors; (iii) products/completed
operations; (iv) personal injury; (v) contractual liability; (vi) explosion, collapse, and underground
property damage.
• Property Damage Liability:
$1,000,000 per occurrence.
• Automobile Liability:
$1,000,000 per accident,
including, but not limited to, all owned, leased, hired or non-owned motor vehicles used m con-
junction with the rights granted under this Franchise.
• Worker’s Compensation:
As required by law; and, Employer’s Liability as follows:
$1,000,000 per accident.
• Pollution Liability.
Pollution liability insurance which provides coverage for sudden and accidental environmental
contamination with minimum limits of liability of five million dollars ($5,000,000)
11.2. Excess Liability Insurance Umbrella.
$25,000,000, including primary coverage, for each coverage listed in§ 11.1.
11.3. Underwriters and Certificates.
Company shall procure and maintain its insurance with underwriters authorized to do business in
the State of Texas and who are acceptable to the City in terms of solvency and financial strength.
Within thirty (30) days following adoption of this Franchise by the City Council, Company shall
furnish the City with certificates of insurance signed by the respective companies or agents there-
of as proof that it has obtained the types and amounts of insurance coverage required herein. In
addition, Company shall, on demand, provide the City with evidence that it has maintained such
coverage in full force and effect.
11.4. Deductibles.
Deductible or self-insured retention limits on any line of coverage required herein shall not exceed
$25,000 per occurrence.
11.5. No Limitation of Liability.
The insurance requirements set forth in this Section 11 and any recovery by the City of any sum
by reason of any insurance policy required under this Franchise shall in no way be construed or
effected to limit or in any way affect Company’s liability to the City or other Persons as provided
by this Franchise or law.
11.6 Adjustments During Term of Franchise
The City may adjust the limits required by this section at any time with sixty (60) days’ notice to
Company based on changes in statutes or in circumstances that necessitate increased limits in
order to protect the interests of the City and the public in the public right-of-way.
12. TRANSFERS, OWNERSHIP AND CONTROL.
12.1. Management of Company.
Company shall personally manage its Facilities and oversee the provision, distribution, and trans-
portation of Gas within the City. Company shall not, directly or indirectly, contract for, subcontract,
or assign, in whole or in part, the management of its Facilities or the provision, distribution, or
transportation of Gas within the City to any other Person unless the City provides advance written
consent, which consent shall not be unreasonably withheld.
12.2. Transfers.
This Franchise shall not be sold, Transferred, assigned, or otherwise encumbered without the
prior written consent of the City, which consent shall not be unreasonably withheld. For purposes
of this Franchise, if Company seeks to obtain the consent of the City for any kind of Transfer, sale,
assignment or other encumbrance, Company shall submit a request for such consent in writing to
the City and shall submit or cause to be submitted to the City all such documents and information
that the City may reasonably need for its consideration of the request.
13. DEFAULTS.
The occurrence at any time during the term of this Franchise of one or more of the following shall
constitute an “Event of Default” under this Franchise:
13.1 Failure to Pay Franchise Fees.
An Event of Default shall occur if Company fails to pay any Franchise Fee on or before the
respective due date.
13.2. Breach.
An Event of Default shall occur if Company materially breaches or violates any of the terms,
covenants, representations, warranties, or sections set forth in this Franchise or fails to perform
any obligation required by this Franchise.
13.3 Bankruptcy, Insolvency or Receivership.
An Event of Default shall occur if Company (i) files a voluntary petition in bankruptcy; (ii) is adju-
dicated insolvent; (iii) files any petition or fails to contest any petition filed against it seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief
for itself under any laws relating to bankruptcy, insolvency or other relief for debtors; (iv) seeks,
consents to or acquiesces in the appointment of any trustee, receiver, master, custodian or liq-
uidator of Company, any of Company’s property, franchises, or any receipts, issues, earnings or
profits thereof; (v) makes an assignment for the benefit of creditors; or (vi) fails to pay Company’s
debts generally as they become due.
13.4. Violations of the Law
An Event of Default shall occur if Company at any time violates any federal, state, or local laws
including the Denton City Charter and ordinances.
14. UNCURED DEFAULTS AND REMEDIES.
14.1. Notice of Default and Opportunity to Cure.
If an Event of Default occurs, the City shall provide Company with written notice and shall give
Company the opportunity to cure such Event of Default. For an Event of Default which can be
cured by the immediate payment of money to the City, Company shall have thirty (30) days
from the date it receives written notice from the City to cure the Event of Default. If any payment
amount is in dispute, the second paragraph of this Section 14.1 shall control. For any other
Event of Default, Company shall have sixty (60) days from the date it receives written notice
from the City to cure the Event of Default. Except as otherwise provided by this Section 14.1, if
any Event of Default is not cured within the time period specified herein, such Event of Default
shall, without further notice from the City, become an “Uncured Default” and the City immediate-
ly may exercise the remedies provided in Section 14.2.
In the event that Company disputes an amount of money owed by Company to City, Company
shall remit the disputed amount to the City. The City Manager or their designee shall review
the dispute and relevant documents. To the extent the City Manager agrees with Company’s
position, that portion of the disputed amount shall be returned.
14.2. Remedies for Uncured Defaults.
Upon the occurrence of an Uncured Default, the City shall be entitled to exercise, at the same
time or at different times, any of the following remedies, all of which shall be cumulative of and
without limitation to any other rights or remedies the City may have:
14.2.1 Termination of Franchise.
Upon the occurrence of an Uncured Default, the City may terminate this Franchise. Upon such
termination, Company shall forfeit all rights granted to it under this Franchise, and, except as
to Company’s unperformed obligations and existing liabilities as of the date of termination, this
Franchise shall automatically be deemed null and void and shall have no further force or effect.
Company shall remain obligated to pay and the City shall retain the right to receive Franchise
Fees, Payments, and any other amounts due up to the date of termination. In accordance with
and as provided by Chapter 25 of City of Denton’s Code of Ordinances, Company shall remove
its Facilities from and restore the Public Rights-of-Way as and when requested by the City.
The City’s right to terminate this Franchise under this Section 14.2.1 does not and shall not be
construed to constitute any kind of limitation on the City’s right to terminate this Franchise for
other reasons as provided by and in accordance with this Franchise; provided, however, that
Company may not abandon its Facilities or discontinue its Gas services in the City without the
approval of the Commission or successor agency or other regulatory authority with jurisdiction,
if such action without such approval is prohibited at the time by applicable federal or state law
or regulation.
14.2.2. Legal Action Against Company: Attorney Fees.
Upon the occurrence of an Uncured Default, the City may commence against Company an
action at law for monetary damages or in equity for injunctive relief or specific performance of
any of the provisions of this Franchise which, as a matter of equity, are specifically enforceable.
Company agrees that if City is granted any relief for an action of an Uncured Default, Company
is responsible for the City’s attorney fees and costs without any further action required by the
City other than providing documentation of such fees to the Company.
15. PROVISION OF INFORMATION.
15.1. Filings with the Commission.
Company shall provide copies to the City of all documents which Company files with or sends
to the Commission concerning or related to its provision of Gas to Customers or other opera-
tions in the City, including, but not limited to, filings related to (i) tariffs; (ii) rules, regulations and
policies requested, under consideration or approved by the Commission; and (iii) applications
and any supporting pre-filed testimony and exhibits filed by Company or third parties on behalf
of Company, on the same date as such filings are made with the Commission. In addition,
Company shall provide the City with copies of records, documents and other filings related to
its provision of Gas to Customers or other operations in the City that Company is required to
maintain or supply to the Commission under the Texas Utilities Code and any other applicable
state or federal law, rule, or regulation. Confidential information of Company shall be provided
to the City consistent with the Commission’s rules governing disclosure of such information to a
regulatory authority.
15.2. Lawsuits or Claims.
Company shall provide the City with copies of all pleadings in all lawsuits, claims or proceed-
ings to which Company is a party and that pertain to the granting of this Franchise or the
provision, distribution, or transportation of Gas to Customers or other operations in the City
within thirty (30) days of Company’s receipt of same.
16. COMPANY AS INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company shall operate as an independent contractor
as to all rights and privileges granted by this Franchise, and not as an agent, representative
or employee of the City. Company shall have the exclusive right to control the details of its
business and other operations necessary or appurtenant to the provision, distribution, or trans-
portation of Gas in accordance with the terms and conditions of this Franchise AND SHALL
BE SOLELY RESPONSIBLE FOR THE ACTS AND OMISSIONS OF COMPANY’S OFFICERS,
AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS, AND SUBCONTRACTORS. COM-
PANY ACKNOWLEDGES THAT THE DOCTRINE OF RESPONDEAT SUPERIOR SHALL NOT
APPLY AS BETWEEN THE CITY AND COMPANY, ITS OFFICERS, AGENTS, EMPLOYEES,
CONTRACTORS, AND SUBCONTRACTORS. Company further agrees that nothing herein
shall be construed as the creation of a partnership or joint enterprise between the City and
Company.
17. NOTICES.
Notices required pursuant to the provisions of this Franchise shall be conclusively determined to
have been delivered when (i) hand-delivered to the other party, its agents, employees, servants,
or representatives, or (ii) received by the other party by United States Mail, postage prepaid,
return receipt requested.
To the City of Denton: To Company:
City Manager Universal Natural Gas, LLC (d/b/a Universal
City of Denton Natural Gas, Inc.)
215 E. McKinney St. Attn: General Counsel
Denton, Texas 76201 9950 Woodloch Forest Drive 22nd Floor
City Attorney
City of Denton
215 E. McKinney St.
Denton, Texas 76201
18. NON-DISCRIMINATION COVENANT.
Company shall not discriminate against any Person on the basis of race, color, national origin
religion, handicap, sex, sexual orientation or familial status in the provision, distribution or trans-
portation of Gas; in the receipt of benefits from Company’s business operations in the City; in
opportunities for employment with Company that Company may offer; or in the construction or
installation of Company’s Facilities.
19. NO WAIVER
The failure of the City to insist upon the performance of any term or provision of this Franchise
or to exercise any rights that the City may have, either under this Franchise or the law, shall not
constitute a waiver of the City’s right to insist upon appropriate performance or to assert any such
right on any future occasion.
20. GOVERNING LAW AND VENUE.
This Franchise shall be construed pursuant to and in accordance with the laws of the United
States of America, the State of Texas, and the City of Denton Charter and Code of Ordinances.
Any action at law or in equity, related to this Franchise, Company’s provision, distribution or trans-
portation of Gas, or Company’s use of the Public Rights-of-Way, venue for such action shall be
exclusively in the state courts located in Denton County. Texas or the United States District Court
for the Eastern District of Texas. Sherman Division.
21. CONFERENCES
At the request of either the City or Company, the City and Company shall meet at reasonable
times and upon reasonable notice to discuss any aspect of this Franchise, Company’s Facilities,
Company’s operations in the City, Company’s provision, distribution and transportation of Gas, or
Company’s use of Public Rights-of-Way.
22. SEVERABILITY,
22.1. Except as provided in 22.2, if any provision of this Franchise is held to be invalid, illegal,
or unenforceable by a final order entered by a court of competent jurisdiction, or if any provisions
lawfully entered into on the Effective Date are later prohibited or invalidated by state or federal
law, the provisions of this Franchise shall be severable. The City and Company agree they shall
amend this Franchise to comply with such final order entered by a court of competent jurisdiction.
22.2 If Section 7.7 Relocation, which the City and Company agree is lawfully entered into on
the Effective Date of this Franchise, is held to be invalid, illegal, or unenforceable by a final order
entered by a court of competent jurisdiction, or if Section 7.7 Relocation is later prohibited or
invalidated by state or federal law, the City and Company agree this Franchise will terminate sixty
(60) days from such holding, finding, or effective date without any further action required by the
City or Company.
23. SURVIVAL.
The following provisions shall survive the termination of this Franchise Agreement: Section 11-
Insurance
Section 10.3- Indemnity Section 4- Fees and Payment
Section 7.2- Permits; Right-of-Way Requirements
24. FORCE MAJEURE.
In the event Company’s performance of any of the terms, conditions or obligations required by
this Franchise is prevented by a cause or event that is not within Company’s reasonable control,
Company’s non-performance shall be deemed excused for the period of such inability. Causes or
events that are not within the Company’s control shall include, but not be limited to, acts of God,
weather, action or inaction of regulatory bodies, strikes, sabotage, riots or civil disturbances,
failure or loss of utilities, explosions, and natural disasters.
25. HEADINGS NOT CONTROLLING.
Headings and titles that are used in this Franchise are for reference purposes only and shall not
be deemed a part of this Franchise.
26. ENTIRETY OF AGREEMENT.
This Franchise, including the schedule of exhibits attached hereto and any documents incorpo-
rated herein by reference, contains the entire understanding and agreement between the City
and Company as to the matters contained herein. Any prior or contemporaneous oral or written
agreement is hereby declared null and void to the extent in conflict with the terms and conditions
of this Agreement. This Franchise shall not be amended unless agreed to in writing by both par-
ties and approved by the City Council of the City.
27. GUARANTEE OF PERFORMANCE.
Company hereby acknowledges that it carefully has read the terms and conditions of this Fran-
chise and accepts and agrees to perform the duties and obligations set forth in this Franchise.
28. ACCEPTANCE_OF FRANCHISE.
In order to accept this franchise, Company must file with the City Secretary its written statement
of acceptance of this franchise substantially in the form shown in Exhibit “B” within sixty (60) cal-
endar days after its final passage and approval by City. The right, privilege and franchise granted
hereby shall expire on December 31, 2035. Failure to return the acceptance as required by this
section allows the City, at its option to deem that the Company has accepted the Franchise as
stated or to revoke the Franchise and deny the Company its benefits hereunder.
EXECUTED this_ day of, ___________ 20__.
THE CITY OF DENTON, TEXAS: UNIVERSAL NATURAL GAS, LLC:
By ______________ By________________
Sara Hensley, City Manager Richard Bard,
SVP Engineering and Construction
EXHIBIT A
FRANCHISE AREA MAP
EXHIBIT B
ACKNOWLEDGEMENT OF SIGNATURE ON BEHALF OF UNIVERSAL NATURAL GAS, LLC
STATE OF TEXAS §
COUNTY OF DENTON §
BEFORE ME, the undersigned authority, on this day personally appeared Richard Bard, SVP
Engineering and Construction, known to me to be the person whose name is signed to this
Franchise Agreement. Richard Bard acknowledged that he is authorized to sign this Agreement,
that his signature is binding to Universal Natural Gas, LLC and that he did sign this Franchise
Agreement for the purposes and considerations expressed in the Franchise Agreement.
Given my hand and seal of office this_____day of _______________,2025.
Notary Public in and for the State of Texas
(Personalized Seal)
For Denton City Secretary Use:
Filed with the Office of City Secretary on: _
Received by: , _ [NAME and TITLE]
EXHIBIT C
Initial Rates
UNIVERSAL NATURAL GAS, LLC D/B/A UNIVERSAL NATURAL GAS, INC.
RESIDENTIAL SERVICE
RATE SCHEDULE RES
AVAILABILITY
This schedule is available to residential consumers in unincorporated areas and in all incor-
porated areas unless otherwise covered by a specific UNIGAS rate schedule for residential
consumers in incorporated areas receiving natural gas service from UNIGAS (hereinafter called
“Company”).
APPLICATION OF SCHEDULE
The Company will provide distribution service for the delivery of gas supply through the Com-
pany’s facilities to eligible residential customers residing in single family or multi-unit residential
dwellings in which each unit requires a separate connection and meter. Gas supplied hereunder
is for the individual use of the Consumer at one point of delivery and shall not be resold or
shared with others. If the Consumer has a written contract with Company, the terms and provi-
sions of such contract shall be controlling:.
BASE MONTHLY RATE
For bills rendered on and after the effective date of this rate schedule. the monthly hilling period
rate fur each customer receiving service under this rate schedule shall be the sum of the
following:
Monthly Customer Charge: $43.18
Base Charge: $18.00
Interim Rate Adjustments (IRA)1: $25.18
All Gas Consumed at: $3.14 per Mef
OTHER ADJUSTMENTS
Cost of Gas Component: The basic rates for cost of service set forth above shall be increased
by the amount of the Cost of Gas Component for the billing month computed in accordance
with the provisions of Rat.: Schedule COG.
Taxes: Plus applicable taxes and fees related too above in accordance with the provisions of
Rate Schedule TAXES.
Pipeline Safety Inspection Fee: The billing shall reflect adjustments in accordance with provi-
sions of the Pipeline Safety Inspection Fee. Rate Schedule PSFUG.
Weather Normalization Adjustment: The billing shall reflect adjustments in accordance with
the provisions of the Weather Normalization Adjustment Clause, Rate Schedule WNA.
Rate Case Expense Rider: Adjustments in accordance with provisions of the Rate Case
Expense Surcharge Rider, Rate Schedule RCE.
Miscellaneous Service Charges: The billing shall reflect adjustments in accordance with
provisions of the Miscellaneous Service Charges. Rate Schedule M.
UNIVERSAL NATURAL GAS, LLC D/B/A UNIVERSAL NATURAL GAS. INC. COMMERCIAL
SERVICE
RATE SCHEDULE COMM – DENTON
AVAILABILITY
This schedule is available to commen.:ial and other non-residential (hereinafter called
..Commercial”) customers within the municipal boundaries of the City of Denton, Texas receiv-
ing natural gas service from UNIGAS (hereinafter called “Company”).
APPLICATION OF SCHEDULE
The Company will provide distribution sen-ice for the delivery of gas supply through the
Company’s facilities to eligible Com1m:rcial customers in which each unit requires a separate
connection and meter. Gas supplied hereunder is for the individual use of the Customer at one
point of ddivery and shall not be resold or shared with others. If the Custom..:r has a writt..:n
contract with Company, the tem1s and prO\ isions of such contract shall be controlling.
BASE MONTHLY RATE
for bills rendered on and after the effective date of this rate schedule, the monthly billing period
rate for each customer receiving service under this rate schedule shall be the sum of the
following:
Monthly Customer Charge: $94.00
Base Charge: $94.00
Interim Rate Adjustments (IRA): $0.00
All Gas Consumed at: $2.2261 per Mef
OTHER ADJUSTMENTS
Cost of Gas Component: The basic rates for cost of service set forth above shall be increased
by the amount of the Cost of Gas Component for the billing month computed in accordance
with the provisions of Rate Schedule COG.
Pipeline Safety Inspection Fee: The billing shall reflect adjustments in accordance with provi-
sions of the Pipeline Safety Inspection Fee. Rate Schedule PSFUG.
Taxes: Plus applicable taxes and fees related to above in accordance with the provisions of
Rate Schedule TAXES.
Rate Case Expense Rider: Adjustments in accordance with provisions of the Rate Case
Expense Surcharge Rider, Rate Schedule RCE.
Miscellaneous Service Charges: The billing shall reflect adjustments in accordance with
provisions of the Miscellaneous Service Charges, Rate Schedule M.
dentonrc.com || Denton Record-Chronicle Saturday-Sunday, December 20-21, 2025 9B
ORDINANCE NO. 25-1546
AN ORDINANCE OF THE CITY OF DENTON BY THREE SEPARATE VOTES, EACH BEING
CONDUCTED ON SEPTEMBER 16, 2025, OCTOBER 21, 2025, AND DECEMBER 2, 2025,
GRANTING A NONEXCLUSIVE GAS FRANCHISE TO UNIVERSAL NATURAL GAS, LLC, FOR
USE OF PUBLIC RIGHTS-OF-WAY IN A DESIGNATED AREA IN THE CITY OF DENTON FOR
THE PURPOSE OF CONSTRUCTING, MAINTAINING AND OPERATING A SYSTEM OF PIPE-
LINES AND OTHER FACILITIES FOR THE PROVISION, TRANSPORTATION, DISTRIBUTION
AND CONVEYANCE OF GAS TO CUSTOMERS IN SUCH DESIGNATED AREA; AUTHORIZ-
ING EXECUTION OF A FRANCHISE AGREEMENT BETWEEN THE CITY OF DENTON AND
UNIVERSAL NATURAL GAS, LLC, PROVIDING FOR COMPENSATION TO THE CITY FOR
THE USE OF THE PUBLIC RIGHTS-OF-WAYS, PROVIDING TERMS, CONDITIONS AND RE-
QUIREMENTS RELATED TO THE USE OF PUBLIC RIGHTS-OF-WAY IN THE CITY OF DEN-
TON AND TO THE CONSTRUCTION, MAINTENANCE AND OPERATION OF PIPELINES AND
OTHER FACILITIES FOR THE PROVISION, DISTRIBUTION AND TRANSPORTATION OF GAS
TO CUSTOMERS IN THE DESIGNATED AREA OF THE CITY OF DENTON; PROVIDING FOR
PUBLICATION; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, Chapter 121 of the Texas Utilities Code authorizes municipalities to adopt
ordinances that establish conditions for mapping, inventorying, locating, or relocating pipelines
over, under, along, or across a public street or alley or private residential area within the bound-
aries of the municipality and establish conditions for mapping or taking an inventory in an area in
a municipality’s extraterritorial jurisdiction; and
WHEREAS, Chapter 121 of the Texas Utilities Code states that except as expressly
provided in Chapter 121, subchapter E. of that Chapter does not reduce, limit, or impair a power
vested by law in a municipality; and
WHEREAS, the Texas Railroad Commission (Commission) is the state agency with pri-
mary regulatory jurisdiction over the oil and natural gas industry, pipeline transporters, natural
gas and hazardous liquid pipeline industry, natural gas utilities, the LP-gas industry as well as
several other areas; and
WHEREAS, the Commission does not have jurisdiction over, and exercises no regula-
tory authority with respect to, private or public roads or road use. Permits issued by the Com-
mission for oil and gas exploration, production and waste disposal do not limit any independent
authority of a municipality, county, or other state agencies with respect to road use; and
WHEREAS, subject to Gas Utility Regulatory Act (Chapter 33 of the Texas Utilities
Code) limitations, a municipality has exclusive original jurisdiction over the rates, operations, and
services of a gas utility within the municipality in order to provide fair, just, and reasonable rates
and adequate and efficient services; and
WHEREAS, the Texas Transportation Code provides that a home rule city has exclusive
control over and under the public highways, streets, and alleys of the City, including the ability to
control, regulate, or remove an encroachment or obstruction on a street, open or change a public
street, and make improvements to a public highway, street, or alley of the municipality.
WHEREAS, Article XIII of the Denton City Charter entitled Franchises, provides the City
Council may by ordinance grant, renew and extend all franchises of all public utilities operating
within the City for a maximum term of 20 years; and
WHEREAS, the Denton City Charter requires an ordinance granting, amending, renew-
ing, or extending a public utility franchise be passed by a majority vote of the entire City Council
at three (3) regular meetings of the City Council; and
WHEREAS, a public utility franchise ordinance must be published once each week for
three (3) consecutive weeks in the official newspaper at the expense of the franchisee in order
to take effect thirty (30) days after its final passage, however, such ordinance shall be subject to
referendum as provided in Article IV of the Denton City Charter; and
WHEREAS, the Denton City Charter provides the City Council has the power and duty to
determine and regulate the charges, fares or rates of all public utilities operating within the City,
require franchise holders to reimburse the City for reasonable expenses related to advising the
council on requested rate increases, prescribe reasonable standards of service and quality fur-
nished by each utility, prevent unjust discrimination, require certain actions as may be necessary
to provide adequate and efficient service, collect from every public utility operating in the City its
fair and just proportion of certain expenses related to the occupation and use of the public rights
of-ways or compel such public utility to perform, at its own expense, its just share of those activi-
ties requiring the expenses, and such other prescriptions and regulations provided by the Denton
City Charter and that the City of Denton deems desirable or conducive to the safety, welfare and
accommodation of the public, or to enforce franchise agreement provisions; and
WHEREAS, the Denton City Charter provides the City of Denton shall have power to
prohibit certain uses of the public rights-of-way and that any public utility franchise hereafter
granted shall be held subject to all of the terms and conditions contained in the various sections
of Article XIII of the Denton City Charter whether or not such terms are specifically mentioned in
the franchise agreement; and
WHEREAS, the provisions of the Denton City Charter shall not limit in any way the dis-
cretion of the council in imposing such terms and conditions as may be reasonable in connection
with any franchise grant; and
WHEREAS, Universal Natural Gas, LLC, a Texas limited liability company, (“Company”)
wishes to construct a system of pipelines and other facilities for the distribution and provision of
gas and to distribute and provide gas to customers in a designated area within the City of Denton,
and Company has applied for a franchise from the City in order to carry out those purposes; and
WHEREAS, the Company has agreed to extend services to a City of Denton owned parcel
identified by the Denton County Appraisal District as Property ID 64578 and commonly referred
to as Southwest Park; and
WHEREAS, The City of Denton (“City”) has reviewed Company’s request to enter into a
franchise agreement and determined that the granting of a franchise on the terms and condi-
tions set forth in the Franchise Agreement attached hereto, will assist in meeting the needs of
gas by customers in the City.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DENTON,
TEXAS:
Section 1. The recitals set forth above are found to be true and correct legislative and factual
determinations of the City of Denton and are hereby approved and incorporated into the body of
this Ordinance and made a part hereof for all purposes as if fully set forth herein.
Section 2. The City hereby grants Company a franchise to construct, install, maintain and repair
a system of pipelines and other facilities for the provision, distribution and transportation of gas
in, over, under, along and across designated public rights-of-way of the City and to transact
business related to the provision of gas through that system of pipelines and facilities, subject to
the Franchise Agreement substantially in the form attached hereto as Exhibit I, which is hereby
incorporated and made a part of this Ordinance for all purposes.
Section 3. In accordance with and as required by Section 13.06 of the Denton City Charter, the
City Secretary shall compile and maintain a public record of all franchises heretofore or hereafter
granted by the City of Denton.
Section 4. 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.
Section 5. This ordinance shall be in full force and effect following (i) thirty days after final pas-
sage; and (ii) its publication for franchises in accordance with the Denton City Charter.
Section 6. The Franchise Agreement shall be in full force and effect after Company files with
the City Secretary its written statement of acceptance of the Franchise Agreement within sixty
(60) calendar days after the passage and approval by City in accordance with the terms of the
Franchise Agreement, and the Parties execute the Franchise Agreement.
EXHIBIT 1
FRANCHISE AGREEMENT
A. The City Council of the City of Denton has adopted an ordinance that grants Universal
Natural Gas, LLC (Company) a franchise to construct, install, maintain and repair a system of
Facilities as that term is defined herein, for the provision, distribution and transportation of natural
Gas, as defined herein, in, over, under, along and across the public rights-of-way in the City of
Denton and to transact business related to the provision, distribution and transportation of Gas
through such Facilities (“Franchise Ordinance”) subject to the execution by Company.
B. In accordance with the Franchise Ordinance, Company desires to enter into this Fran-
chise, hereinafter referred to as Franchise or Franchise Agreement and guarantees unconditional
performance of its duties and obligations under this Franchise.
C. Ordinance Number 25-1546, adopted on December 2, 2025, is incorporated into this
Franchise Agreement and made a part hereof for all purposes as if fully set forth herein.
D. The effective date of this Franchise is the date of execution by the Parties (“Effective
Date”).
Agreement
The recitals above are true and correct and are hereby incorporated into this Franchise Agree-
ment as if fully set forth herein.
1.DEFINITIONS
Capitalized terms used in this Franchise and not otherwise defined within this Franchise shall
have the following meanings:
Affiliate shall have the meaning stated in the Texas Utilities Code§§ 101.003 and 101.004.
Company shall mean Universal Natural Gas, LLC.
City shall mean the area within the corporate limits of the City of Denton, Texas and the govern-
ing body of the City of Denton, Texas.
Commission shall mean the Raiload Commission of the State of Texas or other authority suc-
ceeding to the regulatory powers of the Commission.
Customer shall mean any Person located, in whole or in part, within the City and that is or may
be served by Company under the terms of this Franchise.
Director shall mean the Director of the City’s Finance Department. or their designee.
Facilities shall mean all of Company’s property, whether real or personal, which is reasonably
necessary to provide, distribute or transport Gas into, within and through the City, including, but
not limited to, transmission and distribution pipes, mains, Gas compressors and meters.
Franchise shall mean the authorization issued to Company by the City for (i) the construction,
installation, maintenance, and repair of Company’s Facilities in, over, under, along and across
the Public Rights-of-Way in the area designated in Exhibit A (Franchise Area); (ii) the operation of
such Facilities for the provision, distribution and transportation of Gas; and (iii) any other related
uses of the Public Rights-of-Way, pursuant to and in accordance with the Franchise Ordinance
and this Franchise Agreement.
Gas shall mean gaseous fuels such as natural gas.
Gross Receipts shall mean all revenue derived or received, directly or indirectly, by Company
from or in connection with the operation of the Facilities within the corporate limits of the City and
including, without limitation:
(1) all revenues received by Company from the sale of Gas to all classes of Custom-
ers within the City; and
(2) all revenues received by Company from the transportation of Gas through the Fa-
cilities of Company within the City to Customers located within the City regardless of the origina-
tion of the gas within the Company’s Facilities; and
(3) the value of Gas transported by Company for Transport Customers through the
Facilities of Company within the City, with the value of such Gas to be reported by each Transport
Customer to Company, provided, however, that should a Transport Customer refuse to furnish
Company its Gas purchase price, Company shall estimate same by utilizing Company’s monthly
industrial weighted average cost of Gas, as reasonably near the time that the transportation
service is performed.
(4) Gross Receipts shall specifically include the following:
(A) Other revenues derived from the following charges:
(i) charges to connect, disconnect, or reconnect Gas within the City; and
(ii) charges to handle return checks from consumers within the City; and
(iii) such other service charges and charges as may, from time to time, be
authorized in the rates and charges required to be on file with the City; and
(iv) contributions in aid of construction (“CIAC”), which shall be calculated
and paid in accordance with Section 4.1.2 of this Franchise Agreement; and
(B) Revenues billed but not ultimately collected or received by Company; and
(C) Gross receipts fees.
(5) Gross Receipts shall not include:
(A) Revenue of any Person including, without limitation, an affiliate, to the extent
that such revenue is also included in Gross Revenues of Company; and
(B) Sales taxes; and
(C) Any interest income earned by Company; and
(D) All monies received from the lease or sale of real or personal property; pro-
vided, however, that this exclusion does not apply to the lease of Facilities located within a Public
Right-of-Way in the City.
Person shall mean, without limitation, an individual, a corporation, a limited liability company, a
general or limited partnership, a sole proprietorship, a joint venture, a business trust or any other
form of business entity or association.
Public Right-of-Way shall mean all dedicated public streets, highways, alleys and rights-of-way
in the City, but shall not include any property of the City that is not a dedicated public street,
highway, alley or right-of-way.
Transfer or Transferred shall mean (i) any form of sale, conveyance, assignment, lease, or sub-
lease of all or substantially all of Company’s Facilities within the City, or merger involving Com-
pany as to this Franchise or Company’s Facilities or (ii) any change in the effective control of
Company. The term Transfer includes (i) any change in limited partnership interests, non-man-
aging limited liability company interests, or non-voting stock representing thirty percent (30%)
or more of the equity interests in the entity in question and (ii) any option, right of conversion or
similar right to acquire interests constituting control without substantial additional consideration.
Transport Customer shall mean a customer that consumes Gas transported but not sold by
Company within the corporate limits of the City.
2.GRANT OF RIGHTS.
2.1.General Use of Public Rights-of-Way for Provision of Gas.
Subject to the terms and conditions set forth in this Franchise and the Denton City Charter and
ordinances, the City hereby grants Company the right to (i) erect, construct, install maintain and
operate Facilities in, over, under, along and across the Public Rights-of-Way in the Franchise
Area and (ii) furnish, transport, sell and distribute Gas to Customers in the Franchise Area. Com-
pany hereby acknowledges and agrees that this Franchise does not allow Company to provide
any goods or services other than Gas in or through the City and does not allow Company to
provide Gas in or through any part of the City other than the Franchise Area. Notwithstanding
any other provision herein, Company agrees any rights or privileges granted to Company herein
apply only in the Franchise Area.
2.2 Changes to Territorial Limits.
Company agrees that the territorial limits of the City are subject to expansion or reduction by
annexation and contraction of municipal boundaries and that Company has no vested right in a
specific area. If the Company provides Gas service to an area at the time that area is annexed
to the City, such Gas service by Company shall be provided under the same terms and condi-
tions of this Franchise. The parties agree to amend Exhibit A in the event the geographic area
applicable to this Franchise Agreement changes pursuant to this section. Such expansion or
reduction of the Franchise Area shall occur without further action by the City or Company except
written approval by the City Manager and an individual duly authorized to bind the Company. The
Company must revise its payments due to any expansion or reduction no later than thirty (30)
days after such boundary change is effective.
2.3.Nonexclusive.
2.3.1. This Franchise and all rights granted to Company herein are strictly nonexclusive. The
City reserves the right to grant other and future Gas franchises to other Persons in accordance
with applicable law and as the City deems appropriate. This Franchise does not establish any
priority for the use of the Public Rights-of-Way by Company or by any present or future franchi-
sees or other permit holders. In the event of any dispute as to the priority of use of the Public
Rights-of Way, the first priority shall be to the public generally, the second priority to the City in
the performance of its various functions, and thereafter, as between franchisees and other permit
holders, as determined by the City in the exercise of its powers, including the police power and
other powers reserved to and conferred on it by the State of Texas.
2.3.2. City reserves to itself the right and power at all times to exercise, in the interest of the
public and in accordance with state law, regulation and control of Company’s use of the Public
Rights of-Way to ensure the rendering of efficient public service and the maintenance of Compa-
ny’s System in good repair throughout the term of this Franchise.
2.3.3. City expressly reserves the right to own and operate its own system for the purpose of
transporting, delivering, distributing, or selling gas to and for the City and inhabitants thereof.
2.3.4. Nothing herein shall impair the right of City to fix, within constitutional and statutory
limits, a reasonable price to be charged for natural gas, or to provide and fix a scale of prices for
natural gas and other charges, to be charged by Company to residential consumers, commercial
consumers, industrial consumers or to other consumers, or any combination of such consumers,
within the territorial limits of the City as same now exists or as such limits may be extended from
time to time hereafter.
3.TERM
The term of this Franchise shall be for ten ( l 0) years and become effective on the Effective Date,
as established in the Franchise Ordinance, and shall expire at 11:59 P.M. CST ten (I 0) years from
the Effective Date (the “Term”). This Franchise and all rights of Company provided hereunder
shall automatically terminate upon the expiration of this Franchise. This Franchise Agreement
may be renewed for five (5) years upon mutual written consent of the City and Company, each
a “Renewal Term.” This Franchise Agreement may be renewed as many times as the City and
Company mutually agree.
4.FEES AND PAYMENTS TO CITY.
4.1 Franchise Fee.
Company shall pay the City throughout the term of this Franchise an amount equal to five percent
(5%) of Company’s Gross Receipts (“Franchise Fee”). If permitted by applicable law, following at
least thirty (30) days’ advance written notice to Company, the City may review and change the
amount of the Franchise Fee to the amount of the franchise fee applicable to all other Gas utilities
within the City by ordinance adopted by the City Council.
4.1.1.Confidential Information Regarding Transport Customers.
Company shall require each of its Transport Customers to disclose to Company on a quarterly
basis their aggregate purchase prices of Gas transported through Company’s Facilities. If Com-
pany submits any documents to the City that are related to disclosures made to Company by
any of its Transport Customers, Company may remove from such documents any information
that would disclose either the identity of the Transport Customer or other information deemed
confidential by Company, provided that any such removal does not prevent the City from its
determining any Transport Customer’s purchase prices of Gas transported through Company’s
Facilities. In order for the City to verify the accuracy of information provided by Company, Compa-
ny shall, at the City’s written request, give the City access to any information deemed confidential
by Company and that was removed by Company in documents provided to the City.
4.1.2.Due Date of Franchise Fee.
Except for Franchise Fee amounts that are based on CIAC, Company shall pay the Franchise
Fee to the City on a calendar quarterly basis. The Franchise Fee shall be due within forty-five
(45) days following the last day of each quarter. The Franchise Fee amounts based on CIAC
shall be calculated on an annual calendar year basis, i.e., from January 1 through December 31
of each calendar year. The Franchise Fee amounts that are due based on CIAC shall be paid at
least once annually, on or before April 30 of each year, based on the total CIAC recorded during
the preceding calendar year.
4.1.3.Effect of Other Municipalities’ Fees Accepted and Paid by Company.
Company agrees the percentage amount of the Franchise Fee provided for herein to the City
of Denton is equal to or is a greater percentage of the Franchise Fee agreed to by Company or
provided for in any other similar Gas municipal franchise, which includes any franchise ordinance
or agreement.
Company further agrees that where terms or provisions related to all fees, costs, pass-throughs,
taxes etc. (“Payment”) are not included in the Franchise Fee are provided to other municipalities
in similar Gas franchises and that are more favorable than those provided to the City, then the
Payment to be paid by Company to the City pursuant to this Franchise Agreement shall be in-
creased without any further action required or taken by the City so that the amount due and to
be paid hereunder is proportionally equal to the amount that would be due and payable to the
City were the franchise fee provisions of that other similar municipal franchise applied to the City.
If Company should at any time after the Effective Date hereof agree to a new similar municipal
franchise or renew a similar existing municipal franchise ordinance with another municipality and
the franchise fee owed to that municipality for the use of its public rights-of-way would, if applied
to the City, result in a Franchise Fee greater than the amount otherwise due the City under this
Franchise Agreement, then the Franchise Fee to be paid by Company to the City pursuant to this
Franchise Agreement shall be increased without any further action required or taken by the City
so that the amount due and to be paid hereunder is equal to the amount that would be due and
payable to the City were the franchise fee provisions of that other municipal franchise applied to
the City. The Company shall also notify the City of the change pursuant to the notification provi-
sions herein. The provisions of this Section 4.1.3 apply only to the amount of the Franchise Fee
to be paid to the City and do not apply to other payment provisions, including, without limitation,
the timing of such payments.
4.1.4.Accompanying Report.
Company shall submit with its Franchise Fee payment a written report in a form acceptable to
the City and verified by an officer of the Company that summarizes Company’s Gross Receipts,
including but not limited to, its gross revenues for the preceding calendar quarter upon which
franchise fees are calculated, including the amount of revenues received by Company for the
transportation of gas; (ii) the coded identity of Company’s Transport Customers during the pre-
ceding calendar quarter; and (iii) the cost, volume, and transport fee of Gas transported during
the preceding calendar quarter for such Transport Customers.
4.1.5.Audits.
The City may audit Company at any time to verify the accuracy of Franchise Fees paid to the City
for the prior four (4) years. Company shall pay any additional amounts due the City as reported
in any City audit within thirty (30) days following the City’s submission to Company of an invoice
for such sum, provided that the City Council shall afford Company a fair hearing with reference
to the audit and shall either approve or disapprove the results of the audit or make such order
as may be reasonable. The City and Company may compel the attendance of witnesses and the
production of books and other records in order to assist the City Council in its decisions relating
to the accuracy of the Franchise Fees paid to the City. If the additional amount due exceeds ten
percent (10%) of the Franchise Fee which the audit shows should have been paid to the City for
the period in which the audit covered, Company shall pay the City’s costs for the audit. Other-
wise, the City shall pay its own costs for the audit.
4.1.6.Other Obligations.
In addition to the Franchise Fee, Company shall pay the City all sums which may be due the City
for property taxes, license fees, permit fees, or other taxes, charges, or fees that the City may
from time to time impose on all other Gas utilities within the City. Company shall be responsible
for publication of this Franchise as required by the Denton City Charter. The City may require the
funds prior to publication, or may invoice the Company for reimbursement.
4.2.Interest.
All sums not paid when due shall bear interest at the rate of ten percent (10%) per annum or
the maximum amount allowed by law, whichever is less, computed monthly. If such outstanding
sums are paid with interest within thirty (30) days following their respective due dates, Compa-
ny’s failure to pay such sums by their respective due dates shall not, in and of itself, constitute an
Event of Default under Section 13 of this Franchise.
4.4.Tariff Recovery
City agrees (i) to the extent the City acts as regulatory authority, to adopt and approve that por-
tion of any tariff which provides for one hundred percent (100%) recovery of the franchise fee on
Discretionary Service Charges; (ii) in the event the City intervenes in any regulatory proceeding
before a federal or state agency in which the recovery of the franchise fees on such Discretionary
Service Charges is an issue, the City will take an affirmative position supporting the I 00% recov-
ery of such franchise fees by Company and; (iii) 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. City agrees that it
will take no action, nor cause any other person or entity to take any action, to prohibit the recov-
ery of such franchise fees by Company. The City is not required to intervene in any proceeding,
and is also not required to expend any funds in order to comply with this section.
5.REGULATORY AUTHORITY OF THE CITY.
5.1.Rates.
A. The City Council hereby expressly reserves the full right, power, and authority to regu-
late and establish the rates and charges for Company’s provision, distribution and transportation
of Gas and any other services of Company, as provided by and in accordance with Texas law and
the Denton City Charter. Company may from time to time propose changes in its general rates
by filing an application with the City Secretary for consideration by the City Council. Within a rea-
sonable time consistent with applicable law, the City Council shall afford Company a fair hearing
with reference to the application and shall either approve or disapprove the proposed changes
or make such order as may be reasonable. The City shall have the full power and authority to
inspect, or cause to be inspected, Company’s books and to inventory and appraise, or cause
to be inventoried and appraised, Company’s Facilities and other real and personal property. In
addition, the City may compel the attendance of witnesses and the production of Company’s
books and other records in order to assist the City Council in its decisions relating to the City’s
rate regulatory authority.
B. The Company agrees to initially establish the rates and charges as described in Exhibit
C. Future changes to these rates will be governed by Section 5.l(A) and (B).
C. The Grantee shall have the right to make and enforce such reasonable rules and regu-
lations as it may deem necessary for the extension of its facilities, the sale of its gas and the con-
duct of its business, provided that such rules and regulations comply with the laws of the State of
Texas, the ordinances and regulations of the Grantor, the provisions of this Franchise, and with
the applicable orders, rules or regulations of the Railroad Commission of Texas where such RRC
orders, rules and regulations are consistent with the three items first listed in this sentence.
5.2.Other Matters.
Company’s property and operations hereunder shall be subject to such regulation by the City
as may be reasonably necessary for the protection or benefit of the general public. In this con-
nection, Company shall be subject to, governed by and shall comply with all applicable federal,
state, and local laws, including all ordinances, rules, and regulations of the City, as same may be
adopted and amended from time to time.
5.3.Regulatory Expenses.
Company agrees that City may, at any time during the term of this Franchise, employ at the ex-
pense of Company expert assistance and advice in determining fair, just, and reasonable rates
to be charged by Company to its consumers in the City, and in determining the extent to which
Company is complying with the terms and conditions of this Franchise Ordinance. In the manner
requested by the City, Company agrees to pay reasonable expenses in connection therewith, or
reimburse City for the same.
6.RECORDKEEPING AND ACCOUNTING.
Company shall keep complete and accurate books of accounts and records of its business and
operations in the City pursuant to this Franchise as required by the Commission and in accor-
dance with state and federal law, of accounts and in a manner that will allow the City to determine
investment, cost of service and operating expenses related to Company’s provision of Gas to
Customers and transportation of Gas to Transport Customers. The City may require the keeping
of additional records or accounts which are reasonably necessary for purposes of identifying,
accounting for and reporting receipts, uncollectible accounts, and expenses or otherwise reason-
ably necessary for the administration of this Franchise. The City shall have the right to inspect at
reasonable times the plant, equipment and other property of Company and its Affiliates (but only
to the extent that the Affiliate’s plant, equipment or other property relates to Company’s provision
of Gas to Customers or transportation of Gas to Transport Customers) in accordance with appli-
cable law and to examine, audit and obtain copies of the papers, books, accounts, documents
and other business records of Company pertaining to its business and operations in the City.
7.USE OF PUBLIC RIGHTS-OF-WAY.
7.1.City’s Right-of-Way
7.1.1. Company acknowledges and agrees the City has the right to control and regulate the
use of the Public Rights-of-Way, public places and other City-owned property and the spaces
above and beneath them.
7.1.2. The City has and reserves the right to lay, and permit to be laid, storm, sewer, gas,
water, wastewater, and other pipe, lines, cables, and conduits, or other improvements and to do
and permit to be done any underground or overhead work that may be necessary or proper as
determined by the City in, across, along, over, or under Public Rights-of-Way occupied by Com-
pany. The City also reserves the right to change in any manner any curb, sidewalk, highway, alley,
public way, street, utility lines, storm sewers, drainage basins, ditches, and the like as necessary
or proper as determined by the City.
7.2 Permits: Right-of-Way Requirements.
7.2.1. This Franchise does not relieve Company of any obligation to obtain permits, licenses,
and other approvals from the City necessary for the construction, installation, maintenance or
repair of Company’s Facilities or the provision, distribution, or transportation of Gas through such
Facilities.
7.2.2. Company agrees it must comply with the City Denton Charter and City of Denton, Texas
Code of Ordinances, Chapter 25, Article II, Construction and Repair, Division 3. Right-of-Way
Construction Management, as amended (ROW Ordinance), except where the requirements on
Company in this Franchise Agreement are more stringent than those in the ROW Ordinance. A
violation of the ROW Ordinance constitutes a breach of this Franchise.
7.3.No Undue Burden.
Company’s Facilities shall not be erected, installed, constructed, repaired, replaced, or main-
tained in any manner that places an undue burden on the present or future use of the Public
Rights-of Way by the City and the public. If the City reasonably determines that any of Company’s
Facilities do place an undue burden on a portion of the Public Rights-of-Way, Company, at Com-
pany’s sole cost and expense and within a reasonable time period specified by the City, shall
modify the Facilities or take other actions determined by the City to be in the public interest to
remove or alleviate the burden.
7.4 Minimal Interference.
Company shall not unreasonably interfere with traffic over streets, alleys, and highways. Compa-
ny’s operations and activities within the Public Rights-of-Way in the City.
7.5 Marking of Facilities.
Company’s Facilities shall be clearly marked in a manner to show conspicuously Company’s
name and a toll-free telephone number of Company that a Person may call for assistance. The
markings and their placement shall be in compliance with all applicable law regarding marking,
labeling and notice, and shall be placed in a manner to ensure public safety, and to prevent acci-
dental damage such as during construction, maintenance or operations activity.
7.6.Emergency Work by the City
The City shall have the right to sever, disrupt, remove, relocate, damage or destroy any of Com-
pany’s Facilities without any prior notice and at no liability to the City if such action is deemed
necessary by the City Manager, Mayor, Police Chief or Fire Chief or their authorized represen-
tatives due to a public emergency. For purposes of this Section 7.9.1, a public emergency shall
be any condition which, in the opinion of the officials specified herein, poses an immediate threat
to life, health or property and is caused by any natural or man-made disaster, including, but not
limited to, storms, floods, fires, accidents, explosion, water main breaks and hazardous materials
spills. Company, at Company’s sole cost and expense, shall be responsible for the repair, reloca-
tion or reconstruction of any of its Facilities that are affected by such action of the City.
7.7 Relocation.
In the event Company’s Facilities must be relocated for any reason, Company acknowledges
and agrees it is responsible for all costs for such relocation, and that Company must comply
with the applicable provisions related to relocation in Chapter 25 in the City of Denton Code of
Ordinances.
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8. CUSTOMER SERVICE AND CONSUMER PROTECTION.
8.1. General Standards.
Company shall comply with the more stringent of the Customer service and consumer protection
provisions of (i) this Franchise Agreement and any applicable ordinance of the City or (ii) Chap-
ters 182 and 183 of the Texas Utilities Code and Title 16, Chapter 7, Sub-chapter D of the Texas
Administrative Code, as such provisions exist or are amended or re-codified during the term of
this Franchise Agreement.
8.2 Dependable Service and Reasonable Rates.
Company shall take all reasonable and necessary steps to assure a dependable supply of Gas
to Customers at the lowest reasonable cost consistent with long-term reliable supplies and in
a manner that may be prescribed from time to time by appropriate state and local authorities.
8.3. New Service.
8.3.1. Extension of Facilities: Duty to Serve.
If a Customer requests Company t0 provide Customer with Gas to a property within the Fran-
chise Area, Company shall promptly comply with this request as provided by this Section 8.3. In
extending the provision of its services to a new Customer within the Franchise Area, Company
shall extend its mains and other Facilities in the Public Rights-of-Way necessary to provide Gas to
such Customer up to one hundred (100) feet without cost to that Customer. Otherwise, Company
shall have the right to contract with a Customer in regard to the installation of and payment for any
Facilities necessary to connect the Customer’s premises with Company’s Facilities in the Public
Rights-of-Way. Company shall not be required to extend its mains or other Facilities in the Public
Rights-of-Way more than one hundred (100) feet to serve any one Customer.
8.3.2 Extension of Facilities to City-owned Property.
As a condition of this Franchise Agreement, the Company agrees to extend services at the Com-
pany’s sole cost to a City-owned property identified by the Denton County Appraisal District
as property identification number 64578, known commonly as Southwest Park. The Company
agrees to extend these services to the Southwest Park and make these services available to the
City at the same time and in the same manner the services are available to the adjacent property
in Hunter Ranch Municipal Management District. The Parties agree Southwest Park is included
in the Franchise Area.
8.4 Ownership of Facilities.
Company shall own, operate, and maintain all supply lines extending from Company’s main in
the Public Right-of-Way to a Customer’s meter, including the meter itself. A Customer shall own,
operate, and maintain all underground supply lines extending from the point of connection with
the meter for that Customer to the point of connection with the piping for that Customer’s dwelling
or structure.
8.5 Customer Notifications
Company shall provide new Customers or any existing or potential Customer upon request with
written information on Company’s installation and service policies and billing and complaint pro-
cedures, which include a toll-free telephone number that a Customer may call for information,
assistance, or complaint resolution. In the event that the rules and regulations governing annual
notification are changed by statute or appropriate regulatory authority, Company reserves the
right to substitute such information for the information set forth in this paragraph.
8.6. Bills.
8.6.1. Format
Company’s bills to its Customers shall be issued monthly to each Customer with a balance due.
Bills shall be clear, concise, and understandable. Bills shall be fully itemized and clearly delineate
all activity during the billing period, including optional charges, rebates, credits, and late charges.
Each bill shall prominently display Company’s contact information, including messaging, and
local or toll-free telephone numbers available for use by Customers.
8.6.2. Complaints and Dispute
Company shall respond in writing to all written complaints from Customers regarding billing mat-
ters within thirty (30) days of receipt. Company shall not disconnect a Customer for failure to pay
contested charges during a billing dispute,
9. REPORTS TO CITY.
9.6. Annual Statement.
Company shall make available for inspection by the City all annual reports filed with the Commis-
sion or successor agency covering the operation of Company within the City. The City shall have
the right to require Company to submit reasonable information regarding Company’s properties
and expenses related to Company’s Facilities and operations in the City that may not be included
in such reports, including, but not limited to, a fiscal year-end balance sheet, an income statement
covering the results of operations for the respective fiscal year, a statement of retained earnings
for the year and a statement of cash flows, all of which the City may require to be audited by an
independent certified public accountant acceptable to the City and the Company and to include
a statement to that effect by the certified public accountant.
9.7. Construction-Related Reports.
Within fifteen (15) calendar days following the start of each calendar quarter, Company shall pro-
vide the City a written report in a form acceptable to the Director of Capital Projects that outlines
Company’s plans for construction in the Public Rights-of-Way for the forthcoming eight
(8) calendar quarters.
9.8. Other Reports.
Company shall report to the City such other information relating to Company as the City may rea-
sonably consider useful and shall comply with the City’s preference for the form of such reports,
the time for such reports and the frequency with which such reports are to be made.
10. LIABILITY AND INDEMNIFICATION.
I 0.1. Liability of Company.
COMPANY SHALL BE LIABLE AND RESPONSIBLE FOR ANY AND ALL PROPERTY LOSS,
PROPERTY DAMAGE OR PERSONAL INJURY INCLUDING DEATH, TO ANY AND ALL PER-
SONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING FROM
THE CONSTRUCTION, INSTALLATION, MAINTENANCE OR REPAIR OF COMPANY’S FACIL-
ITIES, THE PROVISION, DISTRIBUTION OR TRANSPORTATION OF GAS IN OR THROUGH
THE CITY OR ANY OTHER USE OF THE PUBLIC RIGHTS-OF-WAY BY COMPANY, ITS OFFI-
CERS, AGENTS, SERVANTS, EMPLOYEE CONTRACTORS AND SUBCONTRACTORS.
10.2. Disclaimer of Liability.
THE CITY SHALL NOT AT ANY TIME BE LIABLE FOR ANY INJURY OR DAMAGE OCCUR-
RING TO ANY PERSON OR PROPERTY FROM ANY CAUSE WHATSOEVER THAT ARISES
OUT OF THE CONSTRUCTION, MAINTENANCE, REPAIR, USE, OPERATION, CONDITION
OR DISMANTLING OF COMPANY’S FACILITIES OR COMPANY’S DISTRIBUTION, PROVI-
SION OR TRANSPORTATION OF GAS, EXCEPT TO THE EXTENT DIRECTLY CAUSED BY
THE NEGLIGENT ACT(S) OR OMISSION(S) OR INTENTIONAL MISCONDUCT OF THE CITY.
10.3. Indemnification.
COMPANY, AT COMPANY’S SOLE COST AND EXPENSE, SHALL INDEMNIFY AND HOLD
HARMLESS THE CITY, ITS OFFICERS, BOARDS, COMMISSIONS, AGENTS, EMPLOYEES
AND VOLUNTEERS (“INDEMNITEES’’), FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, DAMAGES, PENALTIES, CLAIMS, LIENS, COSTS, CHARGES, LOSSES
AND EXPENSES, WHETHER LEGAL OR EQUITABLE, WHICH MAY BE IMPOSED UPON, IN-
CURRED BY OR ASSERTED AGAINST ANY INDEMNITEES BY REASON OF ANY PERSONAL
INJURY OR PROPERTY DAMAGE OR ANY ACT OR OMISSION OF COMPANY, ITS PERSON-
NEL, EMPLOYEES, OFFICERS, AGENTS, CONTRACTORS OR SUBCONTRACTORS WHICH
MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH
(I) THE CONSTRUCTION, INSTALLATION, OPERATION, MAINTENANCE OR CONDITION
OF COMPANY’S FACILITIES; (II) THE PROVISION, DISTRIBUTION OR TRANSPORTATION
OF GAS THROUGH COMPANY’S FACILITIES; (Ill) ANY CLAIM OR LIEN ARISING OUT OF
WORK, LABOR, MATERIALS OR SUPPLIES PROVIDED OR SUPPLIED TO COMPANY, ITS
CONTRACTORS OR SUBCONTRACTORS; OR (IV) COMPANY’S FAILURE TO COMPLY WITH
ANY FEDERAL, STATE OR LOCAL LAW, ORDINANCE, FRANCHISE, RULE OR REGULATION
10.4. Assumption of Risk.
COMPANY HEREBY UNDERTAKES AND ASSUMES, FOR AND ON BEHALF OF COMPANY,
ITS OFFICERS, AGENTS, CONTRACTORS, SUBCONTRACTORS AND EMPLOYEES, ALL
RISK OF DANGEROUS CONDITIONS, IF ANY, ON OR ABOUT ANY CITY-OWNED OR CITY
CONTROLLED PROPERTY, INCLUDING, BUT NOT LIMITED TO, THE PUBLIC RIGHTS-OF
WAY. IN ADDITION, COMPANY HEREBY AGREES TO AND SHALL INDEMNIFY AND HOLD
HARMLESS ANY INDEMNITEE AGAINST AND FROM ANY CLAIM ASSERTED OR LIABILITY
IMPOSED UPON ANY INDEMNITEE FOR ANY PERSONAL INJURY OR PROPERTY DAM-
AGE INCURRED OR ASSERTED BY COMPANY OR ANY OF ITS PERSONNEL, EMPLOYEES,
OFFICERS AGENTS, SERVANTS, CONTRACTORS OR SUBCONTRACTORS, AND ARISING
FROM THE INSTALLATION, OPERATION, MAINTENANCE OR CONDITION OF FACILITIES,
EXCEPT TO THE EXTENT CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OR INTEN-
TIONAL MISCONDUCT OF THE CITY.
10.5. Defense of Indemnities.
IN THE EVENT ANY ACTION, LAWSUIT OR OTHER PROCEEDING IS BROUGHT AGAINST
ANY INDEMNITEE BY REASON OF ANY MATTER FOR WHICH THE INDEMNITEES ARE IN-
DEMNIFIED HEREUNDER, THE CITY SHALL GIVE COMPANY PROMPT WRITTEN NOTICE
OF THE MAKING OF ANY CLAIM OR COMMENCEMENT OF ANY SUCH ACTION, LAW-
SUIT OR OTHER PROCEEDING, AND COMPANY, AT COMPANY’S SOLE COST AND EX-
PENSE, SHALL RESIST AND DEFEND THE SAME WITH REASONABLE PARTICIPATION
BY THE CITY AND WITH LEGAL COUNSEL SELECTED BY COMPANY, AND SPECIFICALLY
APPROVED BY THE CITY. IN SUCH AN EVENT, COMPANY SHALL NOT ADMIT LIABILITY
IN ANY MATTER ON BEHALF OF ANY INDEMNITEE WITHOUT THE ADVANCE WRITTEN
CONSENT OF THE CITY.
COMPANY SHALL RETAIN COUNSEL SPECIFICALLY APPROVED BY THE CITY WITHIN 3
BUSINESS DAYS FROM THE DATE COMPANY IS AWARE AN ACTION, LAWSUIT OR OTHER
PROCEEDING IS BROUGHT AGAINST THE CITY, EXCEPT THAT CITY MAY CONSENT TO A
LONGER PERIOD TO RETAIN COUNSEL WHERE SUCH LONGER PERIOD DOES NOT JEOP-
ARDIZE THE CITY’S ABILITY TO ACT IN ITS INTEREST AS TO SUCH ACTION, LAWSUIT OR
OTHER PROCEEDING.
11. INSURANCE .
Company shall, at its sole cost and expense, procure and maintain at all times, in full force
and effect, throughout the term of this Franchise, a policy or policies of insurance to provide FRYHUDJHVDVVSHFLƂHGKHUHLQDQGLQDFFRUGDQFHZLWK6HFWLRQDVDPHQGHGRIWKH
City of Denton Code of Ordinances, naming the City as an additional insured to cover all
risks related to the use, occupancy, condition, maintenance, existence or location of the
Public Rights-of-Way and the construction, installation, operation, maintenance or condition
of its Facilities.
11.1. Primary Liability Insurance Coverage.
• Commercial General Liability:
$1,000,000 per occurrence for Bodily Injury and Property Damage Liability except Worker’s Com-
pensation, including coverage for the following where exposure exists and as directed by the
City’s Risk Manager: (i) Premises Liability; (ii) independent contractors; (iii) products/completed
operations; (iv) personal injury; (v) contractual liability; (vi) explosion, collapse, and underground
property damage.
• Property Damage Liability:
$1,000,000 per occurrence.
• Automobile Liability:
$1,000,000 per accident,
including, but not limited to, all owned, leased, hired or non-owned motor vehicles used m con-
junction with the rights granted under this Franchise.
• Worker’s Compensation:
As required by law; and, Employer’s Liability as follows:
$1,000,000 per accident.
• Pollution Liability.
Pollution liability insurance which provides coverage for sudden and accidental environmental
contamination with minimum limits of liability of five million dollars ($5,000,000)
11.2. Excess Liability Insurance Umbrella.
$25,000,000, including primary coverage, for each coverage listed in§ 11.1.
11.3. Underwriters and Certificates.
Company shall procure and maintain its insurance with underwriters authorized to do business in
the State of Texas and who are acceptable to the City in terms of solvency and financial strength.
Within thirty (30) days following adoption of this Franchise by the City Council, Company shall
furnish the City with certificates of insurance signed by the respective companies or agents there-
of as proof that it has obtained the types and amounts of insurance coverage required herein. In
addition, Company shall, on demand, provide the City with evidence that it has maintained such
coverage in full force and effect.
11.4. Deductibles.
Deductible or self-insured retention limits on any line of coverage required herein shall not exceed
$25,000 per occurrence.
11.5. No Limitation of Liability.
The insurance requirements set forth in this Section 11 and any recovery by the City of any sum
by reason of any insurance policy required under this Franchise shall in no way be construed or
effected to limit or in any way affect Company’s liability to the City or other Persons as provided
by this Franchise or law.
11.6 Adjustments During Term of Franchise
The City may adjust the limits required by this section at any time with sixty (60) days’ notice to
Company based on changes in statutes or in circumstances that necessitate increased limits in
order to protect the interests of the City and the public in the public right-of-way.
12. TRANSFERS, OWNERSHIP AND CONTROL.
12.1. Management of Company.
Company shall personally manage its Facilities and oversee the provision, distribution, and trans-
portation of Gas within the City. Company shall not, directly or indirectly, contract for, subcontract,
or assign, in whole or in part, the management of its Facilities or the provision, distribution, or
transportation of Gas within the City to any other Person unless the City provides advance written
consent, which consent shall not be unreasonably withheld.
12.2. Transfers.
This Franchise shall not be sold, Transferred, assigned, or otherwise encumbered without the
prior written consent of the City, which consent shall not be unreasonably withheld. For purposes
of this Franchise, if Company seeks to obtain the consent of the City for any kind of Transfer, sale,
assignment or other encumbrance, Company shall submit a request for such consent in writing to
the City and shall submit or cause to be submitted to the City all such documents and information
that the City may reasonably need for its consideration of the request.
13. DEFAULTS.
The occurrence at any time during the term of this Franchise of one or more of the following shall
constitute an “Event of Default” under this Franchise:
13.1 Failure to Pay Franchise Fees.
An Event of Default shall occur if Company fails to pay any Franchise Fee on or before the
respective due date.
13.2. Breach.
An Event of Default shall occur if Company materially breaches or violates any of the terms,
covenants, representations, warranties, or sections set forth in this Franchise or fails to perform
any obligation required by this Franchise.
13.3 Bankruptcy, Insolvency or Receivership.
An Event of Default shall occur if Company (i) files a voluntary petition in bankruptcy; (ii) is adju-
dicated insolvent; (iii) files any petition or fails to contest any petition filed against it seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief
for itself under any laws relating to bankruptcy, insolvency or other relief for debtors; (iv) seeks,
consents to or acquiesces in the appointment of any trustee, receiver, master, custodian or liq-
uidator of Company, any of Company’s property, franchises, or any receipts, issues, earnings or
profits thereof; (v) makes an assignment for the benefit of creditors; or (vi) fails to pay Company’s
debts generally as they become due.
13.4. Violations of the Law
An Event of Default shall occur if Company at any time violates any federal, state, or local laws
including the Denton City Charter and ordinances.
14. UNCURED DEFAULTS AND REMEDIES.
14.1. Notice of Default and Opportunity to Cure.
If an Event of Default occurs, the City shall provide Company with written notice and shall give
Company the opportunity to cure such Event of Default. For an Event of Default which can be
cured by the immediate payment of money to the City, Company shall have thirty (30) days
from the date it receives written notice from the City to cure the Event of Default. If any payment
amount is in dispute, the second paragraph of this Section 14.1 shall control. For any other
Event of Default, Company shall have sixty (60) days from the date it receives written notice
from the City to cure the Event of Default. Except as otherwise provided by this Section 14.1, if
any Event of Default is not cured within the time period specified herein, such Event of Default
shall, without further notice from the City, become an “Uncured Default” and the City immediate-
ly may exercise the remedies provided in Section 14.2.
In the event that Company disputes an amount of money owed by Company to City, Company
shall remit the disputed amount to the City. The City Manager or their designee shall review
the dispute and relevant documents. To the extent the City Manager agrees with Company’s
position, that portion of the disputed amount shall be returned.
14.2. Remedies for Uncured Defaults.
Upon the occurrence of an Uncured Default, the City shall be entitled to exercise, at the same
time or at different times, any of the following remedies, all of which shall be cumulative of and
without limitation to any other rights or remedies the City may have:
14.2.1 Termination of Franchise.
Upon the occurrence of an Uncured Default, the City may terminate this Franchise. Upon such
termination, Company shall forfeit all rights granted to it under this Franchise, and, except as
to Company’s unperformed obligations and existing liabilities as of the date of termination, this
Franchise shall automatically be deemed null and void and shall have no further force or effect.
Company shall remain obligated to pay and the City shall retain the right to receive Franchise
Fees, Payments, and any other amounts due up to the date of termination. In accordance with
and as provided by Chapter 25 of City of Denton’s Code of Ordinances, Company shall remove
its Facilities from and restore the Public Rights-of-Way as and when requested by the City.
The City’s right to terminate this Franchise under this Section 14.2.1 does not and shall not be
construed to constitute any kind of limitation on the City’s right to terminate this Franchise for
other reasons as provided by and in accordance with this Franchise; provided, however, that
Company may not abandon its Facilities or discontinue its Gas services in the City without the
approval of the Commission or successor agency or other regulatory authority with jurisdiction,
if such action without such approval is prohibited at the time by applicable federal or state law
or regulation.
14.2.2. Legal Action Against Company: Attorney Fees.
Upon the occurrence of an Uncured Default, the City may commence against Company an
action at law for monetary damages or in equity for injunctive relief or specific performance of
any of the provisions of this Franchise which, as a matter of equity, are specifically enforceable.
Company agrees that if City is granted any relief for an action of an Uncured Default, Company
is responsible for the City’s attorney fees and costs without any further action required by the
City other than providing documentation of such fees to the Company.
15. PROVISION OF INFORMATION.
15.1. Filings with the Commission.
Company shall provide copies to the City of all documents which Company files with or sends
to the Commission concerning or related to its provision of Gas to Customers or other opera-
tions in the City, including, but not limited to, filings related to (i) tariffs; (ii) rules, regulations and
policies requested, under consideration or approved by the Commission; and (iii) applications
and any supporting pre-filed testimony and exhibits filed by Company or third parties on behalf
of Company, on the same date as such filings are made with the Commission. In addition,
Company shall provide the City with copies of records, documents and other filings related to
its provision of Gas to Customers or other operations in the City that Company is required to
maintain or supply to the Commission under the Texas Utilities Code and any other applicable
state or federal law, rule, or regulation. Confidential information of Company shall be provided
to the City consistent with the Commission’s rules governing disclosure of such information to a
regulatory authority.
15.2. Lawsuits or Claims.
Company shall provide the City with copies of all pleadings in all lawsuits, claims or proceed-
ings to which Company is a party and that pertain to the granting of this Franchise or the
provision, distribution, or transportation of Gas to Customers or other operations in the City
within thirty (30) days of Company’s receipt of same.
16. COMPANY AS INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company shall operate as an independent contractor
as to all rights and privileges granted by this Franchise, and not as an agent, representative
or employee of the City. Company shall have the exclusive right to control the details of its
business and other operations necessary or appurtenant to the provision, distribution, or trans-
portation of Gas in accordance with the terms and conditions of this Franchise AND SHALL
BE SOLELY RESPONSIBLE FOR THE ACTS AND OMISSIONS OF COMPANY’S OFFICERS,
AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS, AND SUBCONTRACTORS. COM-
PANY ACKNOWLEDGES THAT THE DOCTRINE OF RESPONDEAT SUPERIOR SHALL NOT
APPLY AS BETWEEN THE CITY AND COMPANY, ITS OFFICERS, AGENTS, EMPLOYEES,
CONTRACTORS, AND SUBCONTRACTORS. Company further agrees that nothing herein
shall be construed as the creation of a partnership or joint enterprise between the City and
Company.
17. NOTICES.
Notices required pursuant to the provisions of this Franchise shall be conclusively determined to
have been delivered when (i) hand-delivered to the other party, its agents, employees, servants,
or representatives, or (ii) received by the other party by United States Mail, postage prepaid,
return receipt requested.
To the City of Denton: To Company:
City Manager Universal Natural Gas, LLC (d/b/a Universal
City of Denton Natural Gas, Inc.)
215 E. McKinney St. Attn: General Counsel
Denton, Texas 76201 9950 Woodloch Forest Drive 22nd Floor
City Attorney
City of Denton
215 E. McKinney St.
Denton, Texas 76201
18. NON-DISCRIMINATION COVENANT.
Company shall not discriminate against any Person on the basis of race, color, national origin
religion, handicap, sex, sexual orientation or familial status in the provision, distribution or trans-
portation of Gas; in the receipt of benefits from Company’s business operations in the City; in
opportunities for employment with Company that Company may offer; or in the construction or
installation of Company’s Facilities.
19. NO WAIVER
The failure of the City to insist upon the performance of any term or provision of this Franchise
or to exercise any rights that the City may have, either under this Franchise or the law, shall not
constitute a waiver of the City’s right to insist upon appropriate performance or to assert any such
right on any future occasion.
20. GOVERNING LAW AND VENUE.
This Franchise shall be construed pursuant to and in accordance with the laws of the United
States of America, the State of Texas, and the City of Denton Charter and Code of Ordinances.
Any action at law or in equity, related to this Franchise, Company’s provision, distribution or trans-
portation of Gas, or Company’s use of the Public Rights-of-Way, venue for such action shall be
exclusively in the state courts located in Denton County. Texas or the United States District Court
for the Eastern District of Texas. Sherman Division.
21. CONFERENCES
At the request of either the City or Company, the City and Company shall meet at reasonable
times and upon reasonable notice to discuss any aspect of this Franchise, Company’s Facilities,
Company’s operations in the City, Company’s provision, distribution and transportation of Gas, or
Company’s use of Public Rights-of-Way.
22. SEVERABILITY,
22.1. Except as provided in 22.2, if any provision of this Franchise is held to be invalid, illegal,
or unenforceable by a final order entered by a court of competent jurisdiction, or if any provisions
lawfully entered into on the Effective Date are later prohibited or invalidated by state or federal
law, the provisions of this Franchise shall be severable. The City and Company agree they shall
amend this Franchise to comply with such final order entered by a court of competent jurisdiction.
22.2 If Section 7.7 Relocation, which the City and Company agree is lawfully entered into on
the Effective Date of this Franchise, is held to be invalid, illegal, or unenforceable by a final order
entered by a court of competent jurisdiction, or if Section 7.7 Relocation is later prohibited or
invalidated by state or federal law, the City and Company agree this Franchise will terminate sixty
(60) days from such holding, finding, or effective date without any further action required by the
City or Company.
23. SURVIVAL.
The following provisions shall survive the termination of this Franchise Agreement: Section 11-
Insurance
Section 10.3- Indemnity Section 4- Fees and Payment
Section 7.2- Permits; Right-of-Way Requirements
24. FORCE MAJEURE.
In the event Company’s performance of any of the terms, conditions or obligations required by
this Franchise is prevented by a cause or event that is not within Company’s reasonable control,
Company’s non-performance shall be deemed excused for the period of such inability. Causes or
events that are not within the Company’s control shall include, but not be limited to, acts of God,
weather, action or inaction of regulatory bodies, strikes, sabotage, riots or civil disturbances,
failure or loss of utilities, explosions, and natural disasters.
25. HEADINGS NOT CONTROLLING.
Headings and titles that are used in this Franchise are for reference purposes only and shall not
be deemed a part of this Franchise.
26. ENTIRETY OF AGREEMENT.
This Franchise, including the schedule of exhibits attached hereto and any documents incorpo-
rated herein by reference, contains the entire understanding and agreement between the City
and Company as to the matters contained herein. Any prior or contemporaneous oral or written
agreement is hereby declared null and void to the extent in conflict with the terms and conditions
of this Agreement. This Franchise shall not be amended unless agreed to in writing by both par-
ties and approved by the City Council of the City.
27. GUARANTEE OF PERFORMANCE.
Company hereby acknowledges that it carefully has read the terms and conditions of this Fran-
chise and accepts and agrees to perform the duties and obligations set forth in this Franchise.
28. ACCEPTANCE_OF FRANCHISE.
In order to accept this franchise, Company must file with the City Secretary its written statement
of acceptance of this franchise substantially in the form shown in Exhibit “B” within sixty (60) cal-
endar days after its final passage and approval by City. The right, privilege and franchise granted
hereby shall expire on December 31, 2035. Failure to return the acceptance as required by this
section allows the City, at its option to deem that the Company has accepted the Franchise as
stated or to revoke the Franchise and deny the Company its benefits hereunder.
EXECUTED this_ day of, ___________ 20__.
THE CITY OF DENTON, TEXAS: UNIVERSAL NATURAL GAS, LLC:
By ______________ By________________
Sara Hensley, City Manager Richard Bard,
SVP Engineering and Construction
EXHIBIT A
FRANCHISE AREA MAP
EXHIBIT B
ACKNOWLEDGEMENT OF SIGNATURE ON BEHALF OF UNIVERSAL NATURAL GAS, LLC
STATE OF TEXAS §
COUNTY OF DENTON §
BEFORE ME, the undersigned authority, on this day personally appeared Richard Bard, SVP
Engineering and Construction, known to me to be the person whose name is signed to this
Franchise Agreement. Richard Bard acknowledged that he is authorized to sign this Agreement,
that his signature is binding to Universal Natural Gas, LLC and that he did sign this Franchise
Agreement for the purposes and considerations expressed in the Franchise Agreement.
Given my hand and seal of office this_____day of _______________,2025.
Notary Public in and for the State of Texas
(Personalized Seal)
For Denton City Secretary Use:
Filed with the Office of City Secretary on: _
Received by: , _ [NAME and TITLE]
EXHIBIT C
Initial Rates
UNIVERSAL NATURAL GAS, LLC D/B/A UNIVERSAL NATURAL GAS, INC.
RESIDENTIAL SERVICE
RATE SCHEDULE RES
AVAILABILITY
This schedule is available to residential consumers in unincorporated areas and in all incor-
porated areas unless otherwise covered by a specific UNIGAS rate schedule for residential
consumers in incorporated areas receiving natural gas service from UNIGAS (hereinafter called
“Company”).
APPLICATION OF SCHEDULE
The Company will provide distribution service for the delivery of gas supply through the Com-
pany’s facilities to eligible residential customers residing in single family or multi-unit residential
dwellings in which each unit requires a separate connection and meter. Gas supplied hereunder
is for the individual use of the Consumer at one point of delivery and shall not be resold or
shared with others. If the Consumer has a written contract with Company, the terms and provi-
sions of such contract shall be controlling:.
BASE MONTHLY RATE
For bills rendered on and after the effective date of this rate schedule. the monthly hilling period
rate fur each customer receiving service under this rate schedule shall be the sum of the
following:
Monthly Customer Charge: $43.18
Base Charge: $18.00
Interim Rate Adjustments (IRA)1: $25.18
All Gas Consumed at: $3.14 per Mef
OTHER ADJUSTMENTS
Cost of Gas Component: The basic rates for cost of service set forth above shall be increased
by the amount of the Cost of Gas Component for the billing month computed in accordance
with the provisions of Rat.: Schedule COG.
Taxes: Plus applicable taxes and fees related too above in accordance with the provisions of
Rate Schedule TAXES.
Pipeline Safety Inspection Fee: The billing shall reflect adjustments in accordance with provi-
sions of the Pipeline Safety Inspection Fee. Rate Schedule PSFUG.
Weather Normalization Adjustment: The billing shall reflect adjustments in accordance with
the provisions of the Weather Normalization Adjustment Clause, Rate Schedule WNA.
Rate Case Expense Rider: Adjustments in accordance with provisions of the Rate Case
Expense Surcharge Rider, Rate Schedule RCE.
Miscellaneous Service Charges: The billing shall reflect adjustments in accordance with
provisions of the Miscellaneous Service Charges. Rate Schedule M.
UNIVERSAL NATURAL GAS, LLC D/B/A UNIVERSAL NATURAL GAS. INC. COMMERCIAL
SERVICE
RATE SCHEDULE COMM – DENTON
AVAILABILITY
This schedule is available to commen.:ial and other non-residential (hereinafter called
..Commercial”) customers within the municipal boundaries of the City of Denton, Texas receiv-
ing natural gas service from UNIGAS (hereinafter called “Company”).
APPLICATION OF SCHEDULE
The Company will provide distribution sen-ice for the delivery of gas supply through the
Company’s facilities to eligible Com1m:rcial customers in which each unit requires a separate
connection and meter. Gas supplied hereunder is for the individual use of the Customer at one
point of ddivery and shall not be resold or shared with others. If the Custom..:r has a writt..:n
contract with Company, the tem1s and prO\ isions of such contract shall be controlling.
BASE MONTHLY RATE
for bills rendered on and after the effective date of this rate schedule, the monthly billing period
rate for each customer receiving service under this rate schedule shall be the sum of the
following:
Monthly Customer Charge: $94.00
Base Charge: $94.00
Interim Rate Adjustments (IRA): $0.00
All Gas Consumed at: $2.2261 per Mef
OTHER ADJUSTMENTS
Cost of Gas Component: The basic rates for cost of service set forth above shall be increased
by the amount of the Cost of Gas Component for the billing month computed in accordance
with the provisions of Rate Schedule COG.
Pipeline Safety Inspection Fee: The billing shall reflect adjustments in accordance with provi-
sions of the Pipeline Safety Inspection Fee. Rate Schedule PSFUG.
Taxes: Plus applicable taxes and fees related to above in accordance with the provisions of
Rate Schedule TAXES.
Rate Case Expense Rider: Adjustments in accordance with provisions of the Rate Case
Expense Surcharge Rider, Rate Schedule RCE.
Miscellaneous Service Charges: The billing shall reflect adjustments in accordance with
provisions of the Miscellaneous Service Charges, Rate Schedule M.
dentonrc.com || Denton Record-Chronicle Saturday-Sunday, December 27-28, 2025 11B
ORDINANCE NO. 25-1546
AN ORDINANCE OF THE CITY OF DENTON BY THREE SEPARATE VOTES, EACH BEING
CONDUCTED ON SEPTEMBER 16, 2025, OCTOBER 21, 2025, AND DECEMBER 2, 2025,
GRANTING A NONEXCLUSIVE GAS FRANCHISE TO UNIVERSAL NATURAL GAS, LLC, FOR
USE OF PUBLIC RIGHTS-OF-WAY IN A DESIGNATED AREA IN THE CITY OF DENTON FOR
THE PURPOSE OF CONSTRUCTING, MAINTAINING AND OPERATING A SYSTEM OF PIPE-
LINES AND OTHER FACILITIES FOR THE PROVISION, TRANSPORTATION, DISTRIBUTION
AND CONVEYANCE OF GAS TO CUSTOMERS IN SUCH DESIGNATED AREA; AUTHORIZ-
ING EXECUTION OF A FRANCHISE AGREEMENT BETWEEN THE CITY OF DENTON AND
UNIVERSAL NATURAL GAS, LLC, PROVIDING FOR COMPENSATION TO THE CITY FOR
THE USE OF THE PUBLIC RIGHTS-OF-WAYS, PROVIDING TERMS, CONDITIONS AND RE-
QUIREMENTS RELATED TO THE USE OF PUBLIC RIGHTS-OF-WAY IN THE CITY OF DEN-
TON AND TO THE CONSTRUCTION, MAINTENANCE AND OPERATION OF PIPELINES AND
OTHER FACILITIES FOR THE PROVISION, DISTRIBUTION AND TRANSPORTATION OF GAS
TO CUSTOMERS IN THE DESIGNATED AREA OF THE CITY OF DENTON; PROVIDING FOR
PUBLICATION; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, Chapter 121 of the Texas Utilities Code authorizes municipalities to adopt
ordinances that establish conditions for mapping, inventorying, locating, or relocating pipelines
over, under, along, or across a public street or alley or private residential area within the bound-
aries of the municipality and establish conditions for mapping or taking an inventory in an area in
a municipality’s extraterritorial jurisdiction; and
WHEREAS, Chapter 121 of the Texas Utilities Code states that except as expressly
provided in Chapter 121, subchapter E. of that Chapter does not reduce, limit, or impair a power
vested by law in a municipality; and
WHEREAS, the Texas Railroad Commission (Commission) is the state agency with pri-
mary regulatory jurisdiction over the oil and natural gas industry, pipeline transporters, natural
gas and hazardous liquid pipeline industry, natural gas utilities, the LP-gas industry as well as
several other areas; and
WHEREAS, the Commission does not have jurisdiction over, and exercises no regula-
tory authority with respect to, private or public roads or road use. Permits issued by the Com-
mission for oil and gas exploration, production and waste disposal do not limit any independent
authority of a municipality, county, or other state agencies with respect to road use; and
WHEREAS, subject to Gas Utility Regulatory Act (Chapter 33 of the Texas Utilities
Code) limitations, a municipality has exclusive original jurisdiction over the rates, operations, and
services of a gas utility within the municipality in order to provide fair, just, and reasonable rates
and adequate and efficient services; and
WHEREAS, the Texas Transportation Code provides that a home rule city has exclusive
control over and under the public highways, streets, and alleys of the City, including the ability to
control, regulate, or remove an encroachment or obstruction on a street, open or change a public
street, and make improvements to a public highway, street, or alley of the municipality.
WHEREAS, Article XIII of the Denton City Charter entitled Franchises, provides the City
Council may by ordinance grant, renew and extend all franchises of all public utilities operating
within the City for a maximum term of 20 years; and
WHEREAS, the Denton City Charter requires an ordinance granting, amending, renew-
ing, or extending a public utility franchise be passed by a majority vote of the entire City Council
at three (3) regular meetings of the City Council; and
WHEREAS, a public utility franchise ordinance must be published once each week for
three (3) consecutive weeks in the official newspaper at the expense of the franchisee in order
to take effect thirty (30) days after its final passage, however, such ordinance shall be subject to
referendum as provided in Article IV of the Denton City Charter; and
WHEREAS, the Denton City Charter provides the City Council has the power and duty to
determine and regulate the charges, fares or rates of all public utilities operating within the City,
require franchise holders to reimburse the City for reasonable expenses related to advising the
council on requested rate increases, prescribe reasonable standards of service and quality fur-
nished by each utility, prevent unjust discrimination, require certain actions as may be necessary
to provide adequate and efficient service, collect from every public utility operating in the City its
fair and just proportion of certain expenses related to the occupation and use of the public rights
of-ways or compel such public utility to perform, at its own expense, its just share of those activi-
ties requiring the expenses, and such other prescriptions and regulations provided by the Denton
City Charter and that the City of Denton deems desirable or conducive to the safety, welfare and
accommodation of the public, or to enforce franchise agreement provisions; and
WHEREAS, the Denton City Charter provides the City of Denton shall have power to
prohibit certain uses of the public rights-of-way and that any public utility franchise hereafter
granted shall be held subject to all of the terms and conditions contained in the various sections
of Article XIII of the Denton City Charter whether or not such terms are specifically mentioned in
the franchise agreement; and
WHEREAS, the provisions of the Denton City Charter shall not limit in any way the dis-
cretion of the council in imposing such terms and conditions as may be reasonable in connection
with any franchise grant; and
WHEREAS, Universal Natural Gas, LLC, a Texas limited liability company, (“Company”)
wishes to construct a system of pipelines and other facilities for the distribution and provision of
gas and to distribute and provide gas to customers in a designated area within the City of Denton,
and Company has applied for a franchise from the City in order to carry out those purposes; and
WHEREAS, the Company has agreed to extend services to a City of Denton owned parcel
identified by the Denton County Appraisal District as Property ID 64578 and commonly referred
to as Southwest Park; and
WHEREAS, The City of Denton (“City”) has reviewed Company’s request to enter into a
franchise agreement and determined that the granting of a franchise on the terms and condi-
tions set forth in the Franchise Agreement attached hereto, will assist in meeting the needs of
gas by customers in the City.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DENTON,
TEXAS:
Section 1. The recitals set forth above are found to be true and correct legislative and factual
determinations of the City of Denton and are hereby approved and incorporated into the body of
this Ordinance and made a part hereof for all purposes as if fully set forth herein.
Section 2. The City hereby grants Company a franchise to construct, install, maintain and repair
a system of pipelines and other facilities for the provision, distribution and transportation of gas
in, over, under, along and across designated public rights-of-way of the City and to transact
business related to the provision of gas through that system of pipelines and facilities, subject to
the Franchise Agreement substantially in the form attached hereto as Exhibit I, which is hereby
incorporated and made a part of this Ordinance for all purposes.
Section 3. In accordance with and as required by Section 13.06 of the Denton City Charter, the
City Secretary shall compile and maintain a public record of all franchises heretofore or hereafter
granted by the City of Denton.
Section 4. 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.
Section 5. This ordinance shall be in full force and effect following (i) thirty days after final pas-
sage; and (ii) its publication for franchises in accordance with the Denton City Charter.
Section 6. The Franchise Agreement shall be in full force and effect after Company files with
the City Secretary its written statement of acceptance of the Franchise Agreement within sixty
(60) calendar days after the passage and approval by City in accordance with the terms of the
Franchise Agreement, and the Parties execute the Franchise Agreement.
EXHIBIT 1
FRANCHISE AGREEMENT
A. The City Council of the City of Denton has adopted an ordinance that grants Universal
Natural Gas, LLC (Company) a franchise to construct, install, maintain and repair a system of
Facilities as that term is defined herein, for the provision, distribution and transportation of natural
Gas, as defined herein, in, over, under, along and across the public rights-of-way in the City of
Denton and to transact business related to the provision, distribution and transportation of Gas
through such Facilities (“Franchise Ordinance”) subject to the execution by Company.
B. In accordance with the Franchise Ordinance, Company desires to enter into this Fran-
chise, hereinafter referred to as Franchise or Franchise Agreement and guarantees unconditional
performance of its duties and obligations under this Franchise.
C. Ordinance Number 25-1546, adopted on December 2, 2025, is incorporated into this
Franchise Agreement and made a part hereof for all purposes as if fully set forth herein.
D. The effective date of this Franchise is the date of execution by the Parties (“Effective
Date”).
Agreement
The recitals above are true and correct and are hereby incorporated into this Franchise Agree-
ment as if fully set forth herein.
1.DEFINITIONS
Capitalized terms used in this Franchise and not otherwise defined within this Franchise shall
have the following meanings:
Affiliate shall have the meaning stated in the Texas Utilities Code§§ 101.003 and 101.004.
Company shall mean Universal Natural Gas, LLC.
City shall mean the area within the corporate limits of the City of Denton, Texas and the govern-
ing body of the City of Denton, Texas.
Commission shall mean the Raiload Commission of the State of Texas or other authority suc-
ceeding to the regulatory powers of the Commission.
Customer shall mean any Person located, in whole or in part, within the City and that is or may
be served by Company under the terms of this Franchise.
Director shall mean the Director of the City’s Finance Department. or their designee.
Facilities shall mean all of Company’s property, whether real or personal, which is reasonably
necessary to provide, distribute or transport Gas into, within and through the City, including, but
not limited to, transmission and distribution pipes, mains, Gas compressors and meters.
Franchise shall mean the authorization issued to Company by the City for (i) the construction,
installation, maintenance, and repair of Company’s Facilities in, over, under, along and across
the Public Rights-of-Way in the area designated in Exhibit A (Franchise Area); (ii) the operation of
such Facilities for the provision, distribution and transportation of Gas; and (iii) any other related
uses of the Public Rights-of-Way, pursuant to and in accordance with the Franchise Ordinance
and this Franchise Agreement.
Gas shall mean gaseous fuels such as natural gas.
Gross Receipts shall mean all revenue derived or received, directly or indirectly, by Company
from or in connection with the operation of the Facilities within the corporate limits of the City and
including, without limitation:
(1) all revenues received by Company from the sale of Gas to all classes of Custom-
ers within the City; and
(2) all revenues received by Company from the transportation of Gas through the Fa-
cilities of Company within the City to Customers located within the City regardless of the origina-
tion of the gas within the Company’s Facilities; and
(3) the value of Gas transported by Company for Transport Customers through the
Facilities of Company within the City, with the value of such Gas to be reported by each Transport
Customer to Company, provided, however, that should a Transport Customer refuse to furnish
Company its Gas purchase price, Company shall estimate same by utilizing Company’s monthly
industrial weighted average cost of Gas, as reasonably near the time that the transportation
service is performed.
(4) Gross Receipts shall specifically include the following:
(A) Other revenues derived from the following charges:
(i) charges to connect, disconnect, or reconnect Gas within the City; and
(ii) charges to handle return checks from consumers within the City; and
(iii) such other service charges and charges as may, from time to time, be
authorized in the rates and charges required to be on file with the City; and
(iv) contributions in aid of construction (“CIAC”), which shall be calculated
and paid in accordance with Section 4.1.2 of this Franchise Agreement; and
(B) Revenues billed but not ultimately collected or received by Company; and
(C) Gross receipts fees.
(5) Gross Receipts shall not include:
(A) Revenue of any Person including, without limitation, an affiliate, to the extent
that such revenue is also included in Gross Revenues of Company; and
(B) Sales taxes; and
(C) Any interest income earned by Company; and
(D) All monies received from the lease or sale of real or personal property; pro-
vided, however, that this exclusion does not apply to the lease of Facilities located within a Public
Right-of-Way in the City.
Person shall mean, without limitation, an individual, a corporation, a limited liability company, a
general or limited partnership, a sole proprietorship, a joint venture, a business trust or any other
form of business entity or association.
Public Right-of-Way shall mean all dedicated public streets, highways, alleys and rights-of-way
in the City, but shall not include any property of the City that is not a dedicated public street,
highway, alley or right-of-way.
Transfer or Transferred shall mean (i) any form of sale, conveyance, assignment, lease, or sub-
lease of all or substantially all of Company’s Facilities within the City, or merger involving Com-
pany as to this Franchise or Company’s Facilities or (ii) any change in the effective control of
Company. The term Transfer includes (i) any change in limited partnership interests, non-man-
aging limited liability company interests, or non-voting stock representing thirty percent (30%)
or more of the equity interests in the entity in question and (ii) any option, right of conversion or
similar right to acquire interests constituting control without substantial additional consideration.
Transport Customer shall mean a customer that consumes Gas transported but not sold by
Company within the corporate limits of the City.
2.GRANT OF RIGHTS.
2.1.General Use of Public Rights-of-Way for Provision of Gas.
Subject to the terms and conditions set forth in this Franchise and the Denton City Charter and
ordinances, the City hereby grants Company the right to (i) erect, construct, install maintain and
operate Facilities in, over, under, along and across the Public Rights-of-Way in the Franchise
Area and (ii) furnish, transport, sell and distribute Gas to Customers in the Franchise Area. Com-
pany hereby acknowledges and agrees that this Franchise does not allow Company to provide
any goods or services other than Gas in or through the City and does not allow Company to
provide Gas in or through any part of the City other than the Franchise Area. Notwithstanding
any other provision herein, Company agrees any rights or privileges granted to Company herein
apply only in the Franchise Area.
2.2 Changes to Territorial Limits.
Company agrees that the territorial limits of the City are subject to expansion or reduction by
annexation and contraction of municipal boundaries and that Company has no vested right in a
specific area. If the Company provides Gas service to an area at the time that area is annexed
to the City, such Gas service by Company shall be provided under the same terms and condi-
tions of this Franchise. The parties agree to amend Exhibit A in the event the geographic area
applicable to this Franchise Agreement changes pursuant to this section. Such expansion or
reduction of the Franchise Area shall occur without further action by the City or Company except
written approval by the City Manager and an individual duly authorized to bind the Company. The
Company must revise its payments due to any expansion or reduction no later than thirty (30)
days after such boundary change is effective.
2.3.Nonexclusive.
2.3.1. This Franchise and all rights granted to Company herein are strictly nonexclusive. The
City reserves the right to grant other and future Gas franchises to other Persons in accordance
with applicable law and as the City deems appropriate. This Franchise does not establish any
priority for the use of the Public Rights-of-Way by Company or by any present or future franchi-
sees or other permit holders. In the event of any dispute as to the priority of use of the Public
Rights-of Way, the first priority shall be to the public generally, the second priority to the City in
the performance of its various functions, and thereafter, as between franchisees and other permit
holders, as determined by the City in the exercise of its powers, including the police power and
other powers reserved to and conferred on it by the State of Texas.
2.3.2. City reserves to itself the right and power at all times to exercise, in the interest of the
public and in accordance with state law, regulation and control of Company’s use of the Public
Rights of-Way to ensure the rendering of efficient public service and the maintenance of Compa-
ny’s System in good repair throughout the term of this Franchise.
2.3.3. City expressly reserves the right to own and operate its own system for the purpose of
transporting, delivering, distributing, or selling gas to and for the City and inhabitants thereof.
2.3.4. Nothing herein shall impair the right of City to fix, within constitutional and statutory
limits, a reasonable price to be charged for natural gas, or to provide and fix a scale of prices for
natural gas and other charges, to be charged by Company to residential consumers, commercial
consumers, industrial consumers or to other consumers, or any combination of such consumers,
within the territorial limits of the City as same now exists or as such limits may be extended from
time to time hereafter.
3.TERM
The term of this Franchise shall be for ten ( l 0) years and become effective on the Effective Date,
as established in the Franchise Ordinance, and shall expire at 11:59 P.M. CST ten (I 0) years from
the Effective Date (the “Term”). This Franchise and all rights of Company provided hereunder
shall automatically terminate upon the expiration of this Franchise. This Franchise Agreement
may be renewed for five (5) years upon mutual written consent of the City and Company, each
a “Renewal Term.” This Franchise Agreement may be renewed as many times as the City and
Company mutually agree.
4.FEES AND PAYMENTS TO CITY.
4.1 Franchise Fee.
Company shall pay the City throughout the term of this Franchise an amount equal to five percent
(5%) of Company’s Gross Receipts (“Franchise Fee”). If permitted by applicable law, following at
least thirty (30) days’ advance written notice to Company, the City may review and change the
amount of the Franchise Fee to the amount of the franchise fee applicable to all other Gas utilities
within the City by ordinance adopted by the City Council.
4.1.1.Confidential Information Regarding Transport Customers.
Company shall require each of its Transport Customers to disclose to Company on a quarterly
basis their aggregate purchase prices of Gas transported through Company’s Facilities. If Com-
pany submits any documents to the City that are related to disclosures made to Company by
any of its Transport Customers, Company may remove from such documents any information
that would disclose either the identity of the Transport Customer or other information deemed
confidential by Company, provided that any such removal does not prevent the City from its
determining any Transport Customer’s purchase prices of Gas transported through Company’s
Facilities. In order for the City to verify the accuracy of information provided by Company, Compa-
ny shall, at the City’s written request, give the City access to any information deemed confidential
by Company and that was removed by Company in documents provided to the City.
4.1.2.Due Date of Franchise Fee.
Except for Franchise Fee amounts that are based on CIAC, Company shall pay the Franchise
Fee to the City on a calendar quarterly basis. The Franchise Fee shall be due within forty-five
(45) days following the last day of each quarter. The Franchise Fee amounts based on CIAC
shall be calculated on an annual calendar year basis, i.e., from January 1 through December 31
of each calendar year. The Franchise Fee amounts that are due based on CIAC shall be paid at
least once annually, on or before April 30 of each year, based on the total CIAC recorded during
the preceding calendar year.
4.1.3.Effect of Other Municipalities’ Fees Accepted and Paid by Company.
Company agrees the percentage amount of the Franchise Fee provided for herein to the City
of Denton is equal to or is a greater percentage of the Franchise Fee agreed to by Company or
provided for in any other similar Gas municipal franchise, which includes any franchise ordinance
or agreement.
Company further agrees that where terms or provisions related to all fees, costs, pass-throughs,
taxes etc. (“Payment”) are not included in the Franchise Fee are provided to other municipalities
in similar Gas franchises and that are more favorable than those provided to the City, then the
Payment to be paid by Company to the City pursuant to this Franchise Agreement shall be in-
creased without any further action required or taken by the City so that the amount due and to
be paid hereunder is proportionally equal to the amount that would be due and payable to the
City were the franchise fee provisions of that other similar municipal franchise applied to the City.
If Company should at any time after the Effective Date hereof agree to a new similar municipal
franchise or renew a similar existing municipal franchise ordinance with another municipality and
the franchise fee owed to that municipality for the use of its public rights-of-way would, if applied
to the City, result in a Franchise Fee greater than the amount otherwise due the City under this
Franchise Agreement, then the Franchise Fee to be paid by Company to the City pursuant to this
Franchise Agreement shall be increased without any further action required or taken by the City
so that the amount due and to be paid hereunder is equal to the amount that would be due and
payable to the City were the franchise fee provisions of that other municipal franchise applied to
the City. The Company shall also notify the City of the change pursuant to the notification provi-
sions herein. The provisions of this Section 4.1.3 apply only to the amount of the Franchise Fee
to be paid to the City and do not apply to other payment provisions, including, without limitation,
the timing of such payments.
4.1.4.Accompanying Report.
Company shall submit with its Franchise Fee payment a written report in a form acceptable to
the City and verified by an officer of the Company that summarizes Company’s Gross Receipts,
including but not limited to, its gross revenues for the preceding calendar quarter upon which
franchise fees are calculated, including the amount of revenues received by Company for the
transportation of gas; (ii) the coded identity of Company’s Transport Customers during the pre-
ceding calendar quarter; and (iii) the cost, volume, and transport fee of Gas transported during
the preceding calendar quarter for such Transport Customers.
4.1.5.Audits.
The City may audit Company at any time to verify the accuracy of Franchise Fees paid to the City
for the prior four (4) years. Company shall pay any additional amounts due the City as reported
in any City audit within thirty (30) days following the City’s submission to Company of an invoice
for such sum, provided that the City Council shall afford Company a fair hearing with reference
to the audit and shall either approve or disapprove the results of the audit or make such order
as may be reasonable. The City and Company may compel the attendance of witnesses and the
production of books and other records in order to assist the City Council in its decisions relating
to the accuracy of the Franchise Fees paid to the City. If the additional amount due exceeds ten
percent (10%) of the Franchise Fee which the audit shows should have been paid to the City for
the period in which the audit covered, Company shall pay the City’s costs for the audit. Other-
wise, the City shall pay its own costs for the audit.
4.1.6.Other Obligations.
In addition to the Franchise Fee, Company shall pay the City all sums which may be due the City
for property taxes, license fees, permit fees, or other taxes, charges, or fees that the City may
from time to time impose on all other Gas utilities within the City. Company shall be responsible
for publication of this Franchise as required by the Denton City Charter. The City may require the
funds prior to publication, or may invoice the Company for reimbursement.
4.2.Interest.
All sums not paid when due shall bear interest at the rate of ten percent (10%) per annum or
the maximum amount allowed by law, whichever is less, computed monthly. If such outstanding
sums are paid with interest within thirty (30) days following their respective due dates, Compa-
ny’s failure to pay such sums by their respective due dates shall not, in and of itself, constitute an
Event of Default under Section 13 of this Franchise.
4.4.Tariff Recovery
City agrees (i) to the extent the City acts as regulatory authority, to adopt and approve that por-
tion of any tariff which provides for one hundred percent (100%) recovery of the franchise fee on
Discretionary Service Charges; (ii) in the event the City intervenes in any regulatory proceeding
before a federal or state agency in which the recovery of the franchise fees on such Discretionary
Service Charges is an issue, the City will take an affirmative position supporting the I 00% recov-
ery of such franchise fees by Company and; (iii) 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. City agrees that it
will take no action, nor cause any other person or entity to take any action, to prohibit the recov-
ery of such franchise fees by Company. The City is not required to intervene in any proceeding,
and is also not required to expend any funds in order to comply with this section.
5.REGULATORY AUTHORITY OF THE CITY.
5.1.Rates.
A. The City Council hereby expressly reserves the full right, power, and authority to regu-
late and establish the rates and charges for Company’s provision, distribution and transportation
of Gas and any other services of Company, as provided by and in accordance with Texas law and
the Denton City Charter. Company may from time to time propose changes in its general rates
by filing an application with the City Secretary for consideration by the City Council. Within a rea-
sonable time consistent with applicable law, the City Council shall afford Company a fair hearing
with reference to the application and shall either approve or disapprove the proposed changes
or make such order as may be reasonable. The City shall have the full power and authority to
inspect, or cause to be inspected, Company’s books and to inventory and appraise, or cause
to be inventoried and appraised, Company’s Facilities and other real and personal property. In
addition, the City may compel the attendance of witnesses and the production of Company’s
books and other records in order to assist the City Council in its decisions relating to the City’s
rate regulatory authority.
B. The Company agrees to initially establish the rates and charges as described in Exhibit
C. Future changes to these rates will be governed by Section 5.l(A) and (B).
C. The Grantee shall have the right to make and enforce such reasonable rules and regu-
lations as it may deem necessary for the extension of its facilities, the sale of its gas and the con-
duct of its business, provided that such rules and regulations comply with the laws of the State of
Texas, the ordinances and regulations of the Grantor, the provisions of this Franchise, and with
the applicable orders, rules or regulations of the Railroad Commission of Texas where such RRC
orders, rules and regulations are consistent with the three items first listed in this sentence.
5.2.Other Matters.
Company’s property and operations hereunder shall be subject to such regulation by the City
as may be reasonably necessary for the protection or benefit of the general public. In this con-
nection, Company shall be subject to, governed by and shall comply with all applicable federal,
state, and local laws, including all ordinances, rules, and regulations of the City, as same may be
adopted and amended from time to time.
5.3.Regulatory Expenses.
Company agrees that City may, at any time during the term of this Franchise, employ at the ex-
pense of Company expert assistance and advice in determining fair, just, and reasonable rates
to be charged by Company to its consumers in the City, and in determining the extent to which
Company is complying with the terms and conditions of this Franchise Ordinance. In the manner
requested by the City, Company agrees to pay reasonable expenses in connection therewith, or
reimburse City for the same.
6.RECORDKEEPING AND ACCOUNTING.
Company shall keep complete and accurate books of accounts and records of its business and
operations in the City pursuant to this Franchise as required by the Commission and in accor-
dance with state and federal law, of accounts and in a manner that will allow the City to determine
investment, cost of service and operating expenses related to Company’s provision of Gas to
Customers and transportation of Gas to Transport Customers. The City may require the keeping
of additional records or accounts which are reasonably necessary for purposes of identifying,
accounting for and reporting receipts, uncollectible accounts, and expenses or otherwise reason-
ably necessary for the administration of this Franchise. The City shall have the right to inspect at
reasonable times the plant, equipment and other property of Company and its Affiliates (but only
to the extent that the Affiliate’s plant, equipment or other property relates to Company’s provision
of Gas to Customers or transportation of Gas to Transport Customers) in accordance with appli-
cable law and to examine, audit and obtain copies of the papers, books, accounts, documents
and other business records of Company pertaining to its business and operations in the City.
7.USE OF PUBLIC RIGHTS-OF-WAY.
7.1.City’s Right-of-Way
7.1.1. Company acknowledges and agrees the City has the right to control and regulate the
use of the Public Rights-of-Way, public places and other City-owned property and the spaces
above and beneath them.
7.1.2. The City has and reserves the right to lay, and permit to be laid, storm, sewer, gas,
water, wastewater, and other pipe, lines, cables, and conduits, or other improvements and to do
and permit to be done any underground or overhead work that may be necessary or proper as
determined by the City in, across, along, over, or under Public Rights-of-Way occupied by Com-
pany. The City also reserves the right to change in any manner any curb, sidewalk, highway, alley,
public way, street, utility lines, storm sewers, drainage basins, ditches, and the like as necessary
or proper as determined by the City.
7.2 Permits: Right-of-Way Requirements.
7.2.1. This Franchise does not relieve Company of any obligation to obtain permits, licenses,
and other approvals from the City necessary for the construction, installation, maintenance or
repair of Company’s Facilities or the provision, distribution, or transportation of Gas through such
Facilities.
7.2.2. Company agrees it must comply with the City Denton Charter and City of Denton, Texas
Code of Ordinances, Chapter 25, Article II, Construction and Repair, Division 3. Right-of-Way
Construction Management, as amended (ROW Ordinance), except where the requirements on
Company in this Franchise Agreement are more stringent than those in the ROW Ordinance. A
violation of the ROW Ordinance constitutes a breach of this Franchise.
7.3.No Undue Burden.
Company’s Facilities shall not be erected, installed, constructed, repaired, replaced, or main-
tained in any manner that places an undue burden on the present or future use of the Public
Rights-of Way by the City and the public. If the City reasonably determines that any of Company’s
Facilities do place an undue burden on a portion of the Public Rights-of-Way, Company, at Com-
pany’s sole cost and expense and within a reasonable time period specified by the City, shall
modify the Facilities or take other actions determined by the City to be in the public interest to
remove or alleviate the burden.
7.4 Minimal Interference.
Company shall not unreasonably interfere with traffic over streets, alleys, and highways. Compa-
ny’s operations and activities within the Public Rights-of-Way in the City.
7.5 Marking of Facilities.
Company’s Facilities shall be clearly marked in a manner to show conspicuously Company’s
name and a toll-free telephone number of Company that a Person may call for assistance. The
markings and their placement shall be in compliance with all applicable law regarding marking,
labeling and notice, and shall be placed in a manner to ensure public safety, and to prevent acci-
dental damage such as during construction, maintenance or operations activity.
7.6.Emergency Work by the City
The City shall have the right to sever, disrupt, remove, relocate, damage or destroy any of Com-
pany’s Facilities without any prior notice and at no liability to the City if such action is deemed
necessary by the City Manager, Mayor, Police Chief or Fire Chief or their authorized represen-
tatives due to a public emergency. For purposes of this Section 7.9.1, a public emergency shall
be any condition which, in the opinion of the officials specified herein, poses an immediate threat
to life, health or property and is caused by any natural or man-made disaster, including, but not
limited to, storms, floods, fires, accidents, explosion, water main breaks and hazardous materials
spills. Company, at Company’s sole cost and expense, shall be responsible for the repair, reloca-
tion or reconstruction of any of its Facilities that are affected by such action of the City.
7.7 Relocation.
In the event Company’s Facilities must be relocated for any reason, Company acknowledges
and agrees it is responsible for all costs for such relocation, and that Company must comply
with the applicable provisions related to relocation in Chapter 25 in the City of Denton Code of
Ordinances.
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8. CUSTOMER SERVICE AND CONSUMER PROTECTION.
8.1. General Standards.
Company shall comply with the more stringent of the Customer service and consumer protection
provisions of (i) this Franchise Agreement and any applicable ordinance of the City or (ii) Chap-
ters 182 and 183 of the Texas Utilities Code and Title 16, Chapter 7, Sub-chapter D of the Texas
Administrative Code, as such provisions exist or are amended or re-codified during the term of
this Franchise Agreement.
8.2 Dependable Service and Reasonable Rates.
Company shall take all reasonable and necessary steps to assure a dependable supply of Gas
to Customers at the lowest reasonable cost consistent with long-term reliable supplies and in
a manner that may be prescribed from time to time by appropriate state and local authorities.
8.3. New Service.
8.3.1. Extension of Facilities: Duty to Serve.
If a Customer requests Company t0 provide Customer with Gas to a property within the Fran-
chise Area, Company shall promptly comply with this request as provided by this Section 8.3. In
extending the provision of its services to a new Customer within the Franchise Area, Company
shall extend its mains and other Facilities in the Public Rights-of-Way necessary to provide Gas to
such Customer up to one hundred (100) feet without cost to that Customer. Otherwise, Company
shall have the right to contract with a Customer in regard to the installation of and payment for any
Facilities necessary to connect the Customer’s premises with Company’s Facilities in the Public
Rights-of-Way. Company shall not be required to extend its mains or other Facilities in the Public
Rights-of-Way more than one hundred (100) feet to serve any one Customer.
8.3.2 Extension of Facilities to City-owned Property.
As a condition of this Franchise Agreement, the Company agrees to extend services at the Com-
pany’s sole cost to a City-owned property identified by the Denton County Appraisal District
as property identification number 64578, known commonly as Southwest Park. The Company
agrees to extend these services to the Southwest Park and make these services available to the
City at the same time and in the same manner the services are available to the adjacent property
in Hunter Ranch Municipal Management District. The Parties agree Southwest Park is included
in the Franchise Area.
8.4 Ownership of Facilities.
Company shall own, operate, and maintain all supply lines extending from Company’s main in
the Public Right-of-Way to a Customer’s meter, including the meter itself. A Customer shall own,
operate, and maintain all underground supply lines extending from the point of connection with
the meter for that Customer to the point of connection with the piping for that Customer’s dwelling
or structure.
8.5 Customer Notifications
Company shall provide new Customers or any existing or potential Customer upon request with
written information on Company’s installation and service policies and billing and complaint pro-
cedures, which include a toll-free telephone number that a Customer may call for information,
assistance, or complaint resolution. In the event that the rules and regulations governing annual
notification are changed by statute or appropriate regulatory authority, Company reserves the
right to substitute such information for the information set forth in this paragraph.
8.6. Bills.
8.6.1. Format
Company’s bills to its Customers shall be issued monthly to each Customer with a balance due.
Bills shall be clear, concise, and understandable. Bills shall be fully itemized and clearly delineate
all activity during the billing period, including optional charges, rebates, credits, and late charges.
Each bill shall prominently display Company’s contact information, including messaging, and
local or toll-free telephone numbers available for use by Customers.
8.6.2. Complaints and Dispute
Company shall respond in writing to all written complaints from Customers regarding billing mat-
ters within thirty (30) days of receipt. Company shall not disconnect a Customer for failure to pay
contested charges during a billing dispute,
9. REPORTS TO CITY.
9.6. Annual Statement.
Company shall make available for inspection by the City all annual reports filed with the Commis-
sion or successor agency covering the operation of Company within the City. The City shall have
the right to require Company to submit reasonable information regarding Company’s properties
and expenses related to Company’s Facilities and operations in the City that may not be included
in such reports, including, but not limited to, a fiscal year-end balance sheet, an income statement
covering the results of operations for the respective fiscal year, a statement of retained earnings
for the year and a statement of cash flows, all of which the City may require to be audited by an
independent certified public accountant acceptable to the City and the Company and to include
a statement to that effect by the certified public accountant.
9.7. Construction-Related Reports.
Within fifteen (15) calendar days following the start of each calendar quarter, Company shall pro-
vide the City a written report in a form acceptable to the Director of Capital Projects that outlines
Company’s plans for construction in the Public Rights-of-Way for the forthcoming eight
(8) calendar quarters.
9.8. Other Reports.
Company shall report to the City such other information relating to Company as the City may rea-
sonably consider useful and shall comply with the City’s preference for the form of such reports,
the time for such reports and the frequency with which such reports are to be made.
10. LIABILITY AND INDEMNIFICATION.
I 0.1. Liability of Company.
COMPANY SHALL BE LIABLE AND RESPONSIBLE FOR ANY AND ALL PROPERTY LOSS,
PROPERTY DAMAGE OR PERSONAL INJURY INCLUDING DEATH, TO ANY AND ALL PER-
SONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING FROM
THE CONSTRUCTION, INSTALLATION, MAINTENANCE OR REPAIR OF COMPANY’S FACIL-
ITIES, THE PROVISION, DISTRIBUTION OR TRANSPORTATION OF GAS IN OR THROUGH
THE CITY OR ANY OTHER USE OF THE PUBLIC RIGHTS-OF-WAY BY COMPANY, ITS OFFI-
CERS, AGENTS, SERVANTS, EMPLOYEE CONTRACTORS AND SUBCONTRACTORS.
10.2. Disclaimer of Liability.
THE CITY SHALL NOT AT ANY TIME BE LIABLE FOR ANY INJURY OR DAMAGE OCCUR-
RING TO ANY PERSON OR PROPERTY FROM ANY CAUSE WHATSOEVER THAT ARISES
OUT OF THE CONSTRUCTION, MAINTENANCE, REPAIR, USE, OPERATION, CONDITION
OR DISMANTLING OF COMPANY’S FACILITIES OR COMPANY’S DISTRIBUTION, PROVI-
SION OR TRANSPORTATION OF GAS, EXCEPT TO THE EXTENT DIRECTLY CAUSED BY
THE NEGLIGENT ACT(S) OR OMISSION(S) OR INTENTIONAL MISCONDUCT OF THE CITY.
10.3. Indemnification.
COMPANY, AT COMPANY’S SOLE COST AND EXPENSE, SHALL INDEMNIFY AND HOLD
HARMLESS THE CITY, ITS OFFICERS, BOARDS, COMMISSIONS, AGENTS, EMPLOYEES
AND VOLUNTEERS (“INDEMNITEES’’), FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, DAMAGES, PENALTIES, CLAIMS, LIENS, COSTS, CHARGES, LOSSES
AND EXPENSES, WHETHER LEGAL OR EQUITABLE, WHICH MAY BE IMPOSED UPON, IN-
CURRED BY OR ASSERTED AGAINST ANY INDEMNITEES BY REASON OF ANY PERSONAL
INJURY OR PROPERTY DAMAGE OR ANY ACT OR OMISSION OF COMPANY, ITS PERSON-
NEL, EMPLOYEES, OFFICERS, AGENTS, CONTRACTORS OR SUBCONTRACTORS WHICH
MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH
(I) THE CONSTRUCTION, INSTALLATION, OPERATION, MAINTENANCE OR CONDITION
OF COMPANY’S FACILITIES; (II) THE PROVISION, DISTRIBUTION OR TRANSPORTATION
OF GAS THROUGH COMPANY’S FACILITIES; (Ill) ANY CLAIM OR LIEN ARISING OUT OF
WORK, LABOR, MATERIALS OR SUPPLIES PROVIDED OR SUPPLIED TO COMPANY, ITS
CONTRACTORS OR SUBCONTRACTORS; OR (IV) COMPANY’S FAILURE TO COMPLY WITH
ANY FEDERAL, STATE OR LOCAL LAW, ORDINANCE, FRANCHISE, RULE OR REGULATION
10.4. Assumption of Risk.
COMPANY HEREBY UNDERTAKES AND ASSUMES, FOR AND ON BEHALF OF COMPANY,
ITS OFFICERS, AGENTS, CONTRACTORS, SUBCONTRACTORS AND EMPLOYEES, ALL
RISK OF DANGEROUS CONDITIONS, IF ANY, ON OR ABOUT ANY CITY-OWNED OR CITY
CONTROLLED PROPERTY, INCLUDING, BUT NOT LIMITED TO, THE PUBLIC RIGHTS-OF
WAY. IN ADDITION, COMPANY HEREBY AGREES TO AND SHALL INDEMNIFY AND HOLD
HARMLESS ANY INDEMNITEE AGAINST AND FROM ANY CLAIM ASSERTED OR LIABILITY
IMPOSED UPON ANY INDEMNITEE FOR ANY PERSONAL INJURY OR PROPERTY DAM-
AGE INCURRED OR ASSERTED BY COMPANY OR ANY OF ITS PERSONNEL, EMPLOYEES,
OFFICERS AGENTS, SERVANTS, CONTRACTORS OR SUBCONTRACTORS, AND ARISING
FROM THE INSTALLATION, OPERATION, MAINTENANCE OR CONDITION OF FACILITIES,
EXCEPT TO THE EXTENT CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OR INTEN-
TIONAL MISCONDUCT OF THE CITY.
10.5. Defense of Indemnities.
IN THE EVENT ANY ACTION, LAWSUIT OR OTHER PROCEEDING IS BROUGHT AGAINST
ANY INDEMNITEE BY REASON OF ANY MATTER FOR WHICH THE INDEMNITEES ARE IN-
DEMNIFIED HEREUNDER, THE CITY SHALL GIVE COMPANY PROMPT WRITTEN NOTICE
OF THE MAKING OF ANY CLAIM OR COMMENCEMENT OF ANY SUCH ACTION, LAW-
SUIT OR OTHER PROCEEDING, AND COMPANY, AT COMPANY’S SOLE COST AND EX-
PENSE, SHALL RESIST AND DEFEND THE SAME WITH REASONABLE PARTICIPATION
BY THE CITY AND WITH LEGAL COUNSEL SELECTED BY COMPANY, AND SPECIFICALLY
APPROVED BY THE CITY. IN SUCH AN EVENT, COMPANY SHALL NOT ADMIT LIABILITY
IN ANY MATTER ON BEHALF OF ANY INDEMNITEE WITHOUT THE ADVANCE WRITTEN
CONSENT OF THE CITY.
COMPANY SHALL RETAIN COUNSEL SPECIFICALLY APPROVED BY THE CITY WITHIN 3
BUSINESS DAYS FROM THE DATE COMPANY IS AWARE AN ACTION, LAWSUIT OR OTHER
PROCEEDING IS BROUGHT AGAINST THE CITY, EXCEPT THAT CITY MAY CONSENT TO A
LONGER PERIOD TO RETAIN COUNSEL WHERE SUCH LONGER PERIOD DOES NOT JEOP-
ARDIZE THE CITY’S ABILITY TO ACT IN ITS INTEREST AS TO SUCH ACTION, LAWSUIT OR
OTHER PROCEEDING.
11. INSURANCE .
Company shall, at its sole cost and expense, procure and maintain at all times, in full force
and effect, throughout the term of this Franchise, a policy or policies of insurance to provide FRYHUDJHVDVVSHFLƂHGKHUHLQDQGLQDFFRUGDQFHZLWK6HFWLRQDVDPHQGHGRIWKH
City of Denton Code of Ordinances, naming the City as an additional insured to cover all
risks related to the use, occupancy, condition, maintenance, existence or location of the
Public Rights-of-Way and the construction, installation, operation, maintenance or condition
of its Facilities.
11.1. Primary Liability Insurance Coverage.
• Commercial General Liability:
$1,000,000 per occurrence for Bodily Injury and Property Damage Liability except Worker’s Com-
pensation, including coverage for the following where exposure exists and as directed by the
City’s Risk Manager: (i) Premises Liability; (ii) independent contractors; (iii) products/completed
operations; (iv) personal injury; (v) contractual liability; (vi) explosion, collapse, and underground
property damage.
• Property Damage Liability:
$1,000,000 per occurrence.
• Automobile Liability:
$1,000,000 per accident,
including, but not limited to, all owned, leased, hired or non-owned motor vehicles used m con-
junction with the rights granted under this Franchise.
• Worker’s Compensation:
As required by law; and, Employer’s Liability as follows:
$1,000,000 per accident.
• Pollution Liability.
Pollution liability insurance which provides coverage for sudden and accidental environmental
contamination with minimum limits of liability of five million dollars ($5,000,000)
11.2. Excess Liability Insurance Umbrella.
$25,000,000, including primary coverage, for each coverage listed in§ 11.1.
11.3. Underwriters and Certificates.
Company shall procure and maintain its insurance with underwriters authorized to do business in
the State of Texas and who are acceptable to the City in terms of solvency and financial strength.
Within thirty (30) days following adoption of this Franchise by the City Council, Company shall
furnish the City with certificates of insurance signed by the respective companies or agents there-
of as proof that it has obtained the types and amounts of insurance coverage required herein. In
addition, Company shall, on demand, provide the City with evidence that it has maintained such
coverage in full force and effect.
11.4. Deductibles.
Deductible or self-insured retention limits on any line of coverage required herein shall not exceed
$25,000 per occurrence.
11.5. No Limitation of Liability.
The insurance requirements set forth in this Section 11 and any recovery by the City of any sum
by reason of any insurance policy required under this Franchise shall in no way be construed or
effected to limit or in any way affect Company’s liability to the City or other Persons as provided
by this Franchise or law.
11.6 Adjustments During Term of Franchise
The City may adjust the limits required by this section at any time with sixty (60) days’ notice to
Company based on changes in statutes or in circumstances that necessitate increased limits in
order to protect the interests of the City and the public in the public right-of-way.
12. TRANSFERS, OWNERSHIP AND CONTROL.
12.1. Management of Company.
Company shall personally manage its Facilities and oversee the provision, distribution, and trans-
portation of Gas within the City. Company shall not, directly or indirectly, contract for, subcontract,
or assign, in whole or in part, the management of its Facilities or the provision, distribution, or
transportation of Gas within the City to any other Person unless the City provides advance written
consent, which consent shall not be unreasonably withheld.
12.2. Transfers.
This Franchise shall not be sold, Transferred, assigned, or otherwise encumbered without the
prior written consent of the City, which consent shall not be unreasonably withheld. For purposes
of this Franchise, if Company seeks to obtain the consent of the City for any kind of Transfer, sale,
assignment or other encumbrance, Company shall submit a request for such consent in writing to
the City and shall submit or cause to be submitted to the City all such documents and information
that the City may reasonably need for its consideration of the request.
13. DEFAULTS.
The occurrence at any time during the term of this Franchise of one or more of the following shall
constitute an “Event of Default” under this Franchise:
13.1 Failure to Pay Franchise Fees.
An Event of Default shall occur if Company fails to pay any Franchise Fee on or before the
respective due date.
13.2. Breach.
An Event of Default shall occur if Company materially breaches or violates any of the terms,
covenants, representations, warranties, or sections set forth in this Franchise or fails to perform
any obligation required by this Franchise.
13.3 Bankruptcy, Insolvency or Receivership.
An Event of Default shall occur if Company (i) files a voluntary petition in bankruptcy; (ii) is adju-
dicated insolvent; (iii) files any petition or fails to contest any petition filed against it seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief
for itself under any laws relating to bankruptcy, insolvency or other relief for debtors; (iv) seeks,
consents to or acquiesces in the appointment of any trustee, receiver, master, custodian or liq-
uidator of Company, any of Company’s property, franchises, or any receipts, issues, earnings or
profits thereof; (v) makes an assignment for the benefit of creditors; or (vi) fails to pay Company’s
debts generally as they become due.
13.4. Violations of the Law
An Event of Default shall occur if Company at any time violates any federal, state, or local laws
including the Denton City Charter and ordinances.
14. UNCURED DEFAULTS AND REMEDIES.
14.1. Notice of Default and Opportunity to Cure.
If an Event of Default occurs, the City shall provide Company with written notice and shall give
Company the opportunity to cure such Event of Default. For an Event of Default which can be
cured by the immediate payment of money to the City, Company shall have thirty (30) days
from the date it receives written notice from the City to cure the Event of Default. If any payment
amount is in dispute, the second paragraph of this Section 14.1 shall control. For any other
Event of Default, Company shall have sixty (60) days from the date it receives written notice
from the City to cure the Event of Default. Except as otherwise provided by this Section 14.1, if
any Event of Default is not cured within the time period specified herein, such Event of Default
shall, without further notice from the City, become an “Uncured Default” and the City immediate-
ly may exercise the remedies provided in Section 14.2.
In the event that Company disputes an amount of money owed by Company to City, Company
shall remit the disputed amount to the City. The City Manager or their designee shall review
the dispute and relevant documents. To the extent the City Manager agrees with Company’s
position, that portion of the disputed amount shall be returned.
14.2. Remedies for Uncured Defaults.
Upon the occurrence of an Uncured Default, the City shall be entitled to exercise, at the same
time or at different times, any of the following remedies, all of which shall be cumulative of and
without limitation to any other rights or remedies the City may have:
14.2.1 Termination of Franchise.
Upon the occurrence of an Uncured Default, the City may terminate this Franchise. Upon such
termination, Company shall forfeit all rights granted to it under this Franchise, and, except as
to Company’s unperformed obligations and existing liabilities as of the date of termination, this
Franchise shall automatically be deemed null and void and shall have no further force or effect.
Company shall remain obligated to pay and the City shall retain the right to receive Franchise
Fees, Payments, and any other amounts due up to the date of termination. In accordance with
and as provided by Chapter 25 of City of Denton’s Code of Ordinances, Company shall remove
its Facilities from and restore the Public Rights-of-Way as and when requested by the City.
The City’s right to terminate this Franchise under this Section 14.2.1 does not and shall not be
construed to constitute any kind of limitation on the City’s right to terminate this Franchise for
other reasons as provided by and in accordance with this Franchise; provided, however, that
Company may not abandon its Facilities or discontinue its Gas services in the City without the
approval of the Commission or successor agency or other regulatory authority with jurisdiction,
if such action without such approval is prohibited at the time by applicable federal or state law
or regulation.
14.2.2. Legal Action Against Company: Attorney Fees.
Upon the occurrence of an Uncured Default, the City may commence against Company an
action at law for monetary damages or in equity for injunctive relief or specific performance of
any of the provisions of this Franchise which, as a matter of equity, are specifically enforceable.
Company agrees that if City is granted any relief for an action of an Uncured Default, Company
is responsible for the City’s attorney fees and costs without any further action required by the
City other than providing documentation of such fees to the Company.
15. PROVISION OF INFORMATION.
15.1. Filings with the Commission.
Company shall provide copies to the City of all documents which Company files with or sends
to the Commission concerning or related to its provision of Gas to Customers or other opera-
tions in the City, including, but not limited to, filings related to (i) tariffs; (ii) rules, regulations and
policies requested, under consideration or approved by the Commission; and (iii) applications
and any supporting pre-filed testimony and exhibits filed by Company or third parties on behalf
of Company, on the same date as such filings are made with the Commission. In addition,
Company shall provide the City with copies of records, documents and other filings related to
its provision of Gas to Customers or other operations in the City that Company is required to
maintain or supply to the Commission under the Texas Utilities Code and any other applicable
state or federal law, rule, or regulation. Confidential information of Company shall be provided
to the City consistent with the Commission’s rules governing disclosure of such information to a
regulatory authority.
15.2. Lawsuits or Claims.
Company shall provide the City with copies of all pleadings in all lawsuits, claims or proceed-
ings to which Company is a party and that pertain to the granting of this Franchise or the
provision, distribution, or transportation of Gas to Customers or other operations in the City
within thirty (30) days of Company’s receipt of same.
16. COMPANY AS INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company shall operate as an independent contractor
as to all rights and privileges granted by this Franchise, and not as an agent, representative
or employee of the City. Company shall have the exclusive right to control the details of its
business and other operations necessary or appurtenant to the provision, distribution, or trans-
portation of Gas in accordance with the terms and conditions of this Franchise AND SHALL
BE SOLELY RESPONSIBLE FOR THE ACTS AND OMISSIONS OF COMPANY’S OFFICERS,
AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS, AND SUBCONTRACTORS. COM-
PANY ACKNOWLEDGES THAT THE DOCTRINE OF RESPONDEAT SUPERIOR SHALL NOT
APPLY AS BETWEEN THE CITY AND COMPANY, ITS OFFICERS, AGENTS, EMPLOYEES,
CONTRACTORS, AND SUBCONTRACTORS. Company further agrees that nothing herein
shall be construed as the creation of a partnership or joint enterprise between the City and
Company.
17. NOTICES.
Notices required pursuant to the provisions of this Franchise shall be conclusively determined to
have been delivered when (i) hand-delivered to the other party, its agents, employees, servants,
or representatives, or (ii) received by the other party by United States Mail, postage prepaid,
return receipt requested.
To the City of Denton:To Company:
City Manager Universal Natural Gas, LLC (d/b/a Universal
City of Denton Natural Gas, Inc.)
215 E. McKinney St.Attn: General Counsel
Denton, Texas 76201 9950 Woodloch Forest Drive 22nd Floor
City Attorney
City of Denton
215 E. McKinney St.
Denton, Texas 76201
18. NON-DISCRIMINATION COVENANT.
Company shall not discriminate against any Person on the basis of race, color, national origin
religion, handicap, sex, sexual orientation or familial status in the provision, distribution or trans-
portation of Gas; in the receipt of benefits from Company’s business operations in the City; in
opportunities for employment with Company that Company may offer; or in the construction or
installation of Company’s Facilities.
19. NO WAIVER
The failure of the City to insist upon the performance of any term or provision of this Franchise
or to exercise any rights that the City may have, either under this Franchise or the law, shall not
constitute a waiver of the City’s right to insist upon appropriate performance or to assert any such
right on any future occasion.
20. GOVERNING LAW AND VENUE.
This Franchise shall be construed pursuant to and in accordance with the laws of the United
States of America, the State of Texas, and the City of Denton Charter and Code of Ordinances.
Any action at law or in equity, related to this Franchise, Company’s provision, distribution or trans-
portation of Gas, or Company’s use of the Public Rights-of-Way, venue for such action shall be
exclusively in the state courts located in Denton County. Texas or the United States District Court
for the Eastern District of Texas. Sherman Division.
21. CONFERENCES
At the request of either the City or Company, the City and Company shall meet at reasonable
times and upon reasonable notice to discuss any aspect of this Franchise, Company’s Facilities,
Company’s operations in the City, Company’s provision, distribution and transportation of Gas, or
Company’s use of Public Rights-of-Way.
22. SEVERABILITY,
22.1. Except as provided in 22.2, if any provision of this Franchise is held to be invalid, illegal,
or unenforceable by a final order entered by a court of competent jurisdiction, or if any provisions
lawfully entered into on the Effective Date are later prohibited or invalidated by state or federal
law, the provisions of this Franchise shall be severable. The City and Company agree they shall
amend this Franchise to comply with such final order entered by a court of competent jurisdiction.
22.2 If Section 7.7 Relocation, which the City and Company agree is lawfully entered into on
the Effective Date of this Franchise, is held to be invalid, illegal, or unenforceable by a final order
entered by a court of competent jurisdiction, or if Section 7.7 Relocation is later prohibited or
invalidated by state or federal law, the City and Company agree this Franchise will terminate sixty
(60) days from such holding, finding, or effective date without any further action required by the
City or Company.
23. SURVIVAL.
The following provisions shall survive the termination of this Franchise Agreement: Section 11-
Insurance
Section 10.3- Indemnity Section 4- Fees and Payment
Section 7.2- Permits; Right-of-Way Requirements
24. FORCE MAJEURE.
In the event Company’s performance of any of the terms, conditions or obligations required by
this Franchise is prevented by a cause or event that is not within Company’s reasonable control,
Company’s non-performance shall be deemed excused for the period of such inability. Causes or
events that are not within the Company’s control shall include, but not be limited to, acts of God,
weather, action or inaction of regulatory bodies, strikes, sabotage, riots or civil disturbances,
failure or loss of utilities, explosions, and natural disasters.
25. HEADINGS NOT CONTROLLING.
Headings and titles that are used in this Franchise are for reference purposes only and shall not
be deemed a part of this Franchise.
26. ENTIRETY OF AGREEMENT.
This Franchise, including the schedule of exhibits attached hereto and any documents incorpo-
rated herein by reference, contains the entire understanding and agreement between the City
and Company as to the matters contained herein. Any prior or contemporaneous oral or written
agreement is hereby declared null and void to the extent in conflict with the terms and conditions
of this Agreement. This Franchise shall not be amended unless agreed to in writing by both par-
ties and approved by the City Council of the City.
27. GUARANTEE OF PERFORMANCE.
Company hereby acknowledges that it carefully has read the terms and conditions of this Fran-
chise and accepts and agrees to perform the duties and obligations set forth in this Franchise.
28. ACCEPTANCE_OF FRANCHISE.
In order to accept this franchise, Company must file with the City Secretary its written statement
of acceptance of this franchise substantially in the form shown in Exhibit “B” within sixty (60) cal-
endar days after its final passage and approval by City. The right, privilege and franchise granted
hereby shall expire on December 31, 2035. Failure to return the acceptance as required by this
section allows the City, at its option to deem that the Company has accepted the Franchise as
stated or to revoke the Franchise and deny the Company its benefits hereunder.
EXECUTED this_ day of, ___________ 20__.
THE CITY OF DENTON, TEXAS:UNIVERSAL NATURAL GAS, LLC:
By ______________By________________
Sara Hensley, City Manager Richard Bard,
SVP Engineering and Construction
EXHIBIT A
FRANCHISE AREA MAP
EXHIBIT B
ACKNOWLEDGEMENT OF SIGNATURE ON BEHALF OF UNIVERSAL NATURAL GAS, LLC
STATE OF TEXAS §
COUNTY OF DENTON §
BEFORE ME, the undersigned authority, on this day personally appeared Richard Bard, SVP
Engineering and Construction, known to me to be the person whose name is signed to this
Franchise Agreement. Richard Bard acknowledged that he is authorized to sign this Agreement,
that his signature is binding to Universal Natural Gas, LLC and that he did sign this Franchise
Agreement for the purposes and considerations expressed in the Franchise Agreement.
Given my hand and seal of office this_____day of _______________,2025.
Notary Public in and for the State of Texas
(Personalized Seal)
For Denton City Secretary Use:
Filed with the Office of City Secretary on: _
Received by: , _ [NAME and TITLE]
EXHIBIT C
Initial Rates
UNIVERSAL NATURAL GAS, LLC D/B/A UNIVERSAL NATURAL GAS, INC.
RESIDENTIAL SERVICE
RATE SCHEDULE RES
AVAILABILITY
This schedule is available to residential consumers in unincorporated areas and in all incor-
porated areas unless otherwise covered by a specific UNIGAS rate schedule for residential
consumers in incorporated areas receiving natural gas service from UNIGAS (hereinafter called
“Company”).
APPLICATION OF SCHEDULE
The Company will provide distribution service for the delivery of gas supply through the Com-
pany’s facilities to eligible residential customers residing in single family or multi-unit residential
dwellings in which each unit requires a separate connection and meter. Gas supplied hereunder
is for the individual use of the Consumer at one point of delivery and shall not be resold or
shared with others. If the Consumer has a written contract with Company, the terms and provi-
sions of such contract shall be controlling:.
BASE MONTHLY RATE
For bills rendered on and after the effective date of this rate schedule. the monthly hilling period
rate fur each customer receiving service under this rate schedule shall be the sum of the
following:
Monthly Customer Charge: $43.18
Base Charge: $18.00
Interim Rate Adjustments (IRA)1: $25.18
All Gas Consumed at:$3.14 per Mef
OTHER ADJUSTMENTS
Cost of Gas Component: The basic rates for cost of service set forth above shall be increased
by the amount of the Cost of Gas Component for the billing month computed in accordance
with the provisions of Rat.: Schedule COG.
Taxes: Plus applicable taxes and fees related too above in accordance with the provisions of
Rate Schedule TAXES.
Pipeline Safety Inspection Fee: The billing shall reflect adjustments in accordance with provi-
sions of the Pipeline Safety Inspection Fee. Rate Schedule PSFUG.
Weather Normalization Adjustment: The billing shall reflect adjustments in accordance with
the provisions of the Weather Normalization Adjustment Clause, Rate Schedule WNA.
Rate Case Expense Rider: Adjustments in accordance with provisions of the Rate Case
Expense Surcharge Rider, Rate Schedule RCE.
Miscellaneous Service Charges: The billing shall reflect adjustments in accordance with
provisions of the Miscellaneous Service Charges. Rate Schedule M.
UNIVERSAL NATURAL GAS, LLC D/B/A UNIVERSAL NATURAL GAS. INC. COMMERCIAL
SERVICE
RATE SCHEDULE COMM – DENTON
AVAILABILITY
This schedule is available to commen.:ial and other non-residential (hereinafter called
..Commercial”) customers within the municipal boundaries of the City of Denton, Texas receiv-
ing natural gas service from UNIGAS (hereinafter called “Company”).
APPLICATION OF SCHEDULE
The Company will provide distribution sen-ice for the delivery of gas supply through the
Company’s facilities to eligible Com1m:rcial customers in which each unit requires a separate
connection and meter. Gas supplied hereunder is for the individual use of the Customer at one
point of ddivery and shall not be resold or shared with others. If the Custom..:r has a writt..:n
contract with Company, the tem1s and prO\ isions of such contract shall be controlling.
BASE MONTHLY RATE
for bills rendered on and after the effective date of this rate schedule, the monthly billing period
rate for each customer receiving service under this rate schedule shall be the sum of the
following:
Monthly Customer Charge: $94.00
Base Charge: $94.00
Interim Rate Adjustments (IRA): $0.00
All Gas Consumed at:$2.2261 per Mef
OTHER ADJUSTMENTS
Cost of Gas Component: The basic rates for cost of service set forth above shall be increased
by the amount of the Cost of Gas Component for the billing month computed in accordance
with the provisions of Rate Schedule COG.
Pipeline Safety Inspection Fee: The billing shall reflect adjustments in accordance with provi-
sions of the Pipeline Safety Inspection Fee. Rate Schedule PSFUG.
Taxes: Plus applicable taxes and fees related to above in accordance with the provisions of
Rate Schedule TAXES.
Rate Case Expense Rider: Adjustments in accordance with provisions of the Rate Case
Expense Surcharge Rider, Rate Schedule RCE.
Miscellaneous Service Charges: The billing shall reflect adjustments in accordance with
provisions of the Miscellaneous Service Charges, Rate Schedule M.