2002-202ORDINANCE NO. dFF -
AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING SETTLEMENT OF
LITIGATION STYLED CITY OF DENTON ld TEXAS UTILITIES COMPANy, ET AL., CAUSE
NO. 009383 CURRENTLY PENDING IN THE 134TM DISTRICT COURT OF DALLAS
COUNTY, TEXAS; AUTHORIZING THE CITY MANAGER AND THE CITY ATTORNEY TO
ACT ON THE CITY'S BEHALF IN EXECUTING ANY AND ALL DOCUMENTS
NECESSARY TO EFFECT SUCH SETTLEMENT UNDER THE TERMS SET FORTH IN THE
ATTACHED COMPROMISE SETTLEMENT AND RELEASE AGREEMENT, AND TO TAKE
SUCH OTHER ACTIONS DEEMED NECESSARY TO FINALIZE THE SETTLEMENT; AND
DECLARING AN EFFECTIVE DATE.
THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTIO~N 1~. The settlement of litigation styled City of Denton v. Texas Utilities Company,
et al., Cause No. 009383 pending in the 134th District Court of Dallas County, is hereby approved,
and the City Manager is hereby authorized to execute a Compromise Settlement and Release
Agreement and other related documents deemed by the City Manager and the City Attorney to be
necessary to conclude the settlement of said litigation as set forth substantially in accordance with
the attached Compromise Settlement and Release Agreement.
SECTION 2. The City Attomey is hereby authorized to provide TXU, through their
attorneys, a fully executed copy of this ordinance and a fully executed original of the Compromise
Settlement and Release Agreement.
SECTION 3.
approval.
PASSED AND APPROVED this the
This ordinance shall become effective immediately upon its passage and
. day of (/7,
2ff2/24.., ,2002.
HSd, ~'~~PROTEM
ATTEST:
JENNIFER WALTERS,1CITY SECRETARY
Ap~QTo~E; A/S TO~L-EGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
COMPROMISE, SETTLEMENT AND RELEASE AGREEMENT
This Compromise, Settlement, and Release Agreement (the "Agreement") is made and
entered into as of the date set forth below by and between the City of Denton (the "City") and TXU
Electric Company n/Wa TXU US Holdings Company ("TXU Electric"), TXqI Gas Company ("TXU
Gas") and TXU Corp. (collectively sometimes referred to as the "TXU Defendants"):
WHEREAS, there is currently pending in the 134~h Judicial District Court of Dallas County,
Texas, in Cause No. 00-9383, a suit styled City of Denton, Texas et al. vs. TXU Electric Company, et
al. (the "Litigation") which includes claims by the City against the TXU Defendants arising out of
the electric and gas franchise ordinances entered into by and between the City and TXU Electric and
TXU Gas and, specifically, a dispute with regard to the amount of franchise fees paid to the City by
TXU Electric and TXU Gas;
WHEREAS, the City and the TX-tJ Defendants have compromised and settled all claims
asserted in the Litigation;
NOW, THEREFORE, in order to settle and finally resolve the causes of action asserted in
the Litigation and to fully and finally resolve all disputes and claims arising out of the calculation
and payment of franchise fees to the City by TXU Electric and TXU Gas prior to and through
December 31,2001, for the mutual promises and covenants set forth in this Agreement, the adequacy
and sufficiency of which consideration is acknowledged, and, without the TXU Defendants having
admitted any of the validity of any allegations made in the Litigation, the City and the TXU
Defendants agree as follows:
1. AMENDMENTS TO THE ELECTRIC FRANCHISE ORDINANCE
As the result of electric industry restructuring, the electric franchise formerly held by
TXU Electric has been assigned to Oncor Electric Delivery Company ("Oncor"), accordingly,
effective January 1, 2002, the City agrees to enter into and TXU Electric agrees to cause Oncor to
COMPROMISE~ SETTLEMENT AND RELEASE AGREEMENT - Pane I
accept an amendment to the current electric franchise ordinance substantially in the form of the
amendment attached as Exhibit A which amendment shall, at the election of the City, provide that
the Discretionary Services Charges identified in Section 6.1.2 of the Tariff for Retail Delivery
applicable to Oncor which are directly paid by the customer and which are those charges identified
as items DD 1 through and inclusive of DD24 in said tariff, shall be subject to an additional franchise
fee based on 4% of such charges which additional franchise fee shall be paid to the City pursuant to
the terms of the amendment attached as Exhibit A. The City acknowledges that Oncor may file with
the Texas Public Utility Commission and/or the City a tariff amendment in compliance.with the
terms of this agreement, which will provide that Oncor shall have the right to collect from the
customer the franchise fee on such Discretionary Service Charges such that the customer shall bear
100% of the franchise fee on such Discretionary Service Charges. The City acknowledges that
Oncor is an intended third-party beneficiary of this agreement and agrees to cooperate with Oncor in
order for Oncor to pass through to customers the entire fzanchise fee on such Discretiona~ Service
Charges by taking the following actions: (i) to the extent the City acts as regulatory authority, by
adopting and approving that portion of any tariff in compliance with the terms of this Agreement
which provides for 100% recovery of such franchise fees; (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 affmuative position supporting
the 100% recovery of such franchise fees by Oncor 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 Oncor. The City further
agrees not to take any action to prevent the recovery of the franchise fees on such Discretionary .
Service Charges by Oncor and to take other action which may be reasonably requested by Oncor to
provide for the 100% recovery of such franchise fees by Oncor.
COMPROMISE. SETTLEMENT AND RELEASE AGREEMENT - Pa~e 2
2. AMENDMENTS TO THE GAS FRANCHISE ORDINANCE
Effective January 1, 2002, the City agrees to enact and TXU Gas agrees to accept an
amendment to the current gas franchise ordinance substantially in the form of the amendment
attached as Exhibit B to provide that, at the election of the City, the franchise fee will increase to a
maximum of 4.00% of the applicable fi-anctfise fee payment base and, at the election of the City, the
franchise fee payment base shall be amended to include miscellaneous fees, contributions in aid.of
construction, bad debt expense, transportation revenues and third-party gas sales and gross receipts
fees as well as a favored nations clause with respect to franchise fee payments and franchise fee
calculations, substantially in the form of the provisions in Exhibit B. The City acknowledges that
TXU Gas has the right to recover from its ratepayers such additional franchise fee payments to the
City and the City agrees to cooperate with TXU Gas in order for TXU Gas to pass through to its
ratepayers the entire franchise fee payment, as amended, by taking the following actions: (i) as
regulatory authority, by adopting and approving the ordinance, rates or tariff which provide for
100% recovery of such franchise fees as part of TXU Gas~ rates; (ii) in the event the City intervenes
in any regulatory proceeding before a federal or state agency in which the recovery of TXU Gas'
franchise fees is an issue, the City will take an affirmative position supporting 100% recovery of
such franchise fees by TXU Gas and; (iii) in the event of an appeal of any such regulatory
proceeding in which a City has intervened, the City wilt take an affirmative position in any such
appeals in support of the 100% recovery of such franchise fees by TXU Gas. The City further agrees
not to take any action to prevent the recovery of such franchise fees by TXU Gas and to take other
action which may be reasonably requested by TXU Gas to provide for the 100% recovery of such
franchise fees from TXU Gas' ratepayers.
COMPROMISE. SETTLEMENT AND RELEASE AGREEMENT - Pa~e 3
3. PAYMENTS TO THE CITY
Upon execution and delivery of a fully executed and notarized original of this
Agreement and conditioned upon the dismissal of the Litigation with prejudice as provided by
Paragraph 5:
A. TXU Gas agrees to pay to the City by payment to its attorneys, Strasburger & Price,
the sum of $100,677.00 the same being City's share of an aggregate sum of exactly
$2,000,000.00 which TXU Gas agreed to pay to the Plaintiffs in the Litigation, which
$2,000,000.00 amount is calculated by multiplying the general business revenues
received by TXU Gas in the calendar year 2000 in the City in which TXU Gas did
business in the aggregate amount of $165,591',132.80 by a factor equal to
0.0120779414. The City acknowledges that TXU Gas has the right to and shall
recover the portion of the $2,000,000.00 amount actually paid to the Plaintiffs in
connection with the settlement of the Litigation from its ratepayers pursuant to the
tax adjustment clause applicable to TXU Gas, by applying a surcharge to the monthly
bills rendered to its ratepayers, provided that the recovery of such surcharge shall be
limited as follows: (1) the surcharge shall be amortized over a period not less than
three years, and (2) the accrual balance will not be subject to interest. TXU Gas
agrees that the franchise fee paid to the City and recovered from ratepayers under this
Agreement will not include any amounts collected in the past from ratepayers.
B. TXU Electric agrees to pay or cause Oncor to pay the City, by payment to its
attomeys, Strasburger & Price, the sum of $3,405 the same being City's share of an
aggregate sum of exactly $1,000,000.00 which TXU Electric agreed to pay to the
Plaintiffs in settlement of the Litigation, which $1,000,000.00 is calculated by
multiplying the general business revenues received by TXU Electric in the calendar
COMPROM1SE~ SETTLEMENT AND RELEASE AGREEMENT - Pa~e 4
year 2000 in the City in which TXU Electric did business in the aggregate amount of
$1,149,561,767.63 by a factor equal to 0.000869897.
C. The TXU Defendants agree and expressly represent that none of the mounts set
forth in paragraphs 3(B) and 4 shall be recovered from ratepayers pursuant to a tax
adjustment clause or by applying a surcharge to the monthly bills rendered to
ratepayers, or otherwise "passed thru" to ratepayer(s).
4. FEES AND EXPENSE REIMBURSEMENT
Upon execution and delivepJ of a fully executed and notarized original of this
' Agreement and conditioned upon the dismissal of the Litigation with prejudice as provided by
Paragraph 5, the TXU Defendants agree to pay and/or cause Oncor to pay the City, by payment to its
attorneys, Strasburger & Price, the sum of $328,028.00 the same being City's share of an aggregate
sum of exactly $915,000 which the TXU Defendants agreed to pay to the Plaintiffs to reimburse the
Plaintiffs for attorneys' fees and expenses incurred in the Litigation.
5. DISMISSAL OF THE LITIGATION
The parties recogn/ze and agree that this settlement is a full settlement of all claims
asserted or which could have been asserted by the City against TXU Electric, TXU Gas and TXU
Corp. in the Litigation related to the calculation or payment of f~anchise fees prior to and through
December 31,2001 and the parties agree that, in connection with such settlement, they will jointly
file with the Court having jurisdiction of the Litigation appropriate pleadings in order to dismiss the
Litigation with prejudice as to the City, with the order of dismissal to provide that costs of court will
be taxed against the party incurring the same and be substantially in the form of the Agreed Order
attached as Exhibit C.
COMPROMISE. SETTLEMENT AND RELEASE AGREEMENT - Page 5
6. RELEASE OF THE TXU DEFENDANTS BY THE CITY
Except for claims arising out ora breach of this Agreement, the City of Denton, on
behalf of itself and its successors and assigns and any and all persons, entities or municipalities
claiming by, through or under them, hereby RELEASES, DISCHARGES AND ACQUITS,
forever and for all purposes, TXU Electhc Company (now known as TXU US Holdings Company),
its successor Oncor Electric Delivery Company, TXU Gas Company, including its division TXU
Gas Distribution, TXU Corp. and each of their respective agents, employees, officers, directors,
shareholders, partners, insurers, attorneys, legal representatives, successors and assigns as well as
their affiliated corporations, including TXU Business Services Company and TXU Energy Company
LLC and its subsidiaries, from and against any and ali liability which they now have, have had or
may have, and all past, present and future actions, causes of action, claims, demands, damages, costs,
expenses, compensation, losses and attorneys' fees of any kind or nature whatsoever, or however
described, whether known or unknown, fixed or contingent, in law or in equity, whether asserted or
unasserted, whether in tort or contract, whether now existing or accruing in the future arising out of
or related to the payment, calculation or rendition of franchise fees to the City on or before
December 31,2001 and all claims which were asserted against the TXU Defendants in the Litigation
or which could have been alleged against the TXU Defendants in the in the Litigation in any way
related to the payment, calculation or rendition of franchise fees by the TXU Defendants on or before
December 31, 2001. This release is intended to only release claims related to the payment,
calculation or rendition of franchise fees by the TXU Defendants on or before December 31, 2001
and is not intended to release any other claim or cause of action that any party to this Agreement has,
known or unknown, or which accrues in the future.
COMPROMISE. SETTLEMENT AND RELEASE AGREEMENT - Pate 6
7. WARRANTY AS TO OWNERSHIP OF CLAIMS AND AUTHORITY
A. The City warrants and represents that it is the owner of the claims being
compromised, settled, discharged and released pursuant to this Agreement and each
further warrants and represents that it has not previously assigned ali or any part of
such claims to another entity or person. The City warrants and represents that there
are no liens of any nature, assignments or subrogation interests in or to the money
paid to the City under the terms of this Agreement.
B. The TXU Defendants warrant that the person(s) executing this Agreement on their
behalf has authority to bind the entity for whom such person signs this Agreement.
8. NO ADMISSION OF LIABILITY
This Agreement is made to compromise, terminate and to constitute an accord and
satisfaction of all of the claims released by this Agreement and the TXU Defendants admit no
liability, fault or wrongdoing of any nature or kind whatsoever and expressly deny and disclaim any
liability, fault or wrongdoing alleged or which could have been alleged with regard to the claims
asserted in the Litigation.
9. RECOVERY OF DAMAGES DUE TO BREACH
In the event of breach by any party of the terms and conditions of this Agreement, a
non-breaching party shall be entitled to recover all expenses as a result of such broach, includ'mg, but
not limited to, reasonable attorneys' fees and costs.
10. MISCELLANEOUS PROVISIONS
It is understood and agreed that all agreements and understandings by and between
the parties to this Agreement with respect to the Litigation, the settlement of the Litigation and the
payment of franchise fees are expressly embodied in this Agreement and that this Agreement
supersedes any and all prior agreements, arrangements or understandings between the parties relat'mg
COMPROMISE~ SETTLEMENT AND RELEASE AGREEMENT - Pa~e 7
to the claims released pursuant to this Agreement or any matters related thereto executed by the
parties, including the Memorandum of Understanding dated January 31,2002 signed by counsel for
the Plaintiffs and the TXU Defendants.
11. The parties acknowledge and agree that the terms of this Agreement are all contractual and
not mere recitals.
12. The parties acknowledge that they have read this Agreement, understand its terms, and that
this Agreement is entered into voluntarily, without duress, and with full knowledge of its legal
significance.
13. This Agreement may not be modified in any manner, nor may any rights provided for herein
be waived, except by an instrument in writing signed by each party.
14. This Agreement shall be binding upon and shall inure to the benefit of the parties and their
respective successors and assigns.
15. Should any term or any provision of this Agreement be declared invalid by a court of
competent jurisdiction, the parties agree that all other terms of this Agreement are binding and have
full force and effect as if the invalid portion had not been included.
16. The parties represent and warrant that n° party has been induced to enter this Agreement by a
statement, action or representation of any kind or character made by the persons or entities released
under this Agreement or any person or persons representing them, other than those expressly made in
this Agreement.
17. It is understood and agreed that this Agreement may be executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes.
18. The headings contained herein are for convenience and reference only and are agreed, in no
way, to define, describe, extend or limit the scope or intent of this Agreement or its provisions.
19. This Agreement shall be construed in accordance with the laws of the State of Texas.
COMPROMISE~ SETTLEMENT AND RELEASE AGREEMENT - Pa~e 8
IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the date
set forth below.
THE CITtY OF DENTONrTEXAS ~ I Ye") ~,~','~
Mich'~l,A. Co, nduf~Cit~ Manago~ J '
Date: ~)~ / / ¢/OZv
t
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
BY:
TXU ELECTRIC COMPANY n/k]a TXU
US HOLDINGS COMPANY
By:
Its:
Date:
TXU GAS COMPANY
Its: kl~:r ~-9 ~a~
Date: '-I ( I q ( ~ ~-
TXU CORP.
Date: - ~,/, 7,j,/~
COMPROMISE~ SETTLEMENT AND RELEASE AGREEMENT ~ Pace 9
STATE OF TEXAS §
COUNTY OF DENTON § ~ 7~P/-d~r-'d/]~/7~/
This instrument was acknowledged before me on the .2~O'-:'day o f June 2002, by-M4eh-ae~.
.~:ota41v~, a~ City Manager on behalf of the City of Denton, Texas.
,,,t;*~.~.~',, JANE E. RICHARDSON
~-"'~'?' '"'?';~ Notary Public State of Texas II
}~.~ My Commission Expires ~[
%.~7~ ~,k~'".,;~.'.,,.: %~... June 27, 2005 ~
STATE OF TEXAS §
COUNTY OF DALLAS §
Notary Public, State of Texas
This instrument was acknowledged before me on the ~ day of~/2002,
b y(J-fi{'/J ~. ~T61a//£N~,O-~., of TXU Electric Company n/kid TXU U8 Holdings Company, on behalf
of said~ ~. ~~//~,//
~ota~ P~blic, State ~¥"Texas I
STATE OF TEXAS §
COUNTY OF DALLAS §
This instrument was acknowledged before me on the day of 4-erie-2002,
by~/~[o~te~J ~,/~o ct [e_ , of TXU Gas Company, on behalf of said corporation.
~(Owen T. Dnnkard t '
Notary Public, State of Texas
] [....:.,..',~r).} ,otaryl~ubll~,Stmofl,~ [
STATE OF TEXAS §
COUNTY OF DALLAS §
This instrument was acknowledged before me on the __
by
COMPR(
/7~43'day of ounc 2002,
behalf of said co.oration.
EXHIBIT A
ORDINANCE NO.
AN ORDINANCE AMENDING THE EXISTING ELECTRIC
FRANCHISE BETWEEN THE CITY AND ONCOR
ELECTRIC DELIVERY COMPANY, TO PROVIDE FOR A
DIFFERENT CONSIDERATION; PROVIDING AN
EFFECTIVE DATE; PROVIDING FOR ACCEPTANCE BY
ONCOR ELECTRIC DELIVERY COMPANY; FINDING
AND DETERMINING THAT THE MEETING AT WHICH
THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC
AS REQUIRED BY LAW.
WHEREAS, Oncor Electric Delivery Company, successor in interest to TXU Electric
Company (hereinafter called "Oncor") is engaged in the business of providing electric utility
service within the City and is using the public streets, alleys, grounds and fights-of-ways within
the City for that purpose under the terms of a franchise ordinance heretofore duly passed by the
governing body of the City and duly accepted by Oncor; and
WHEREAS, the City and Oncor desire to amend said franchise ordinance to provide for a
different consideration;
OF
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COLrNCIL OF THE CITY
, TEXAS: that
SECTION 1: The existing electric franchise ordinance between the City and Oncor
Electric Delivery Company is amended as follows:
mo
Effective January 1, 2002, the franchise fee due from Oncor shall be a sum
comprised of the following:
(1)
a charge, as authorized by Section 33.008(b) of PURA, based on each
kilowatt hour of electricity delivered by Oncor to each retail customer
whose consuming facility's point of delivery is located within the City's
municipal boundaries and as specified by Oncor to the City by letter dated
January 21, 2002.
(a)
The franchise fee due pursuant to Section 33.008(b) of PURA shall
be payable in accordance with the existing electric franchise; and
(2)
a sum equal to four percent (4%) of gross revenues received by Oncor
from services identified in its "Tariff for Retail Delivery Service", Section
6.1.2, "Discretionary Service Charges," items DD 1 through DD24, that are for
the account or benefit of an end-use retail electric consumer.
(a)
The franchise fee amounts based on "Discretionary Service
Charges" shall be calculated on an annual calendar year basis, i.e.,
from January 1 through December 31 of each calendar year.
(b)
The franchise fee amounts that are due based on "Discretionary
Service Charges" shall be paid at least once annually on or before
April 30 each year based on the total "Discretiona~ Service
Charges" received during the preceding calendar year.
B. Oncor Franchise Fee Recovery Tariff
(1)
Oncor may file a tariff amendment(s) to provide for the recovery of the
franchise fee on Discretionary Service Charges.
(2)
City agrees (i) to the extent the City acts as regulatory authority, to adopt
and approve that portion of any tariff which provides for 100% recovery
of the franchise fee on Discretionary Service Charges; (ii) in the event the
City intervenes in any regulatory proceed'rog 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 affn-mative position
supporting the 100% recovery of such franchise fees by Oncor 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 Oncor.
(3)
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
Oncor.
SECTION 2: In ali respects, except as specifically and expressly amended by this
ordinance, the existing effective franchise ordinance heretofore duly passed by the governing
body of the City and duly accepted by Oncor shall remain in full force and effect according to its
terms until said franchise ordinance terminates as provided therein.
SECTION3: This ordinance shall take effect upon its £mal passage and Oncor's
acceptance. Oncor shall, within thirty (30) days from the passage of this ordinance, file its
written acceptance of this ordinance with the Office of the City Secretary in substantially the
following form:
To the Honorable Mayor and City Council:
Oncor Electric Delivery Company, acting by and through the undersigned
authorized officer, hereby accepts in all respects, on this the __ day of
Page 2 of 3
., 20 , Ordinance No. amending the
current electric franchise between the City and Oncor and the same shall
constitute and be a binding contractual obligation of Oncor and the City:
Oncor Electric Delivery Company
By
Vice President
SECTION 4. It is hereby officially found and determined that the meeting at which this
Ordinance is passed is open to the public as required by law and that public notice of the time,
place and purpose of said meeting was given as required.
PASSED AND APPROVED
, TEXAS, this the
a quorum was present and voting.
BY THE CITY COUNCIL OF THE CITY OF
day of ., 2002, at which meeting
ATTEST:
Mayor
City Secretary
APPROVED AS TO FORM:
City Attorney
Page 3 of 3
EXHIBIT B
ORDINANCE NO.
AN ORDINANCE AMENDING THE EXISTING GAS
FRANCHISE BETWEEN THE CITY AND TXU GAS
COMPANY, TO PROVIDE FOR A DIFFERENT
CONSIDERATION AND TO AUTHORIZE THE LEASE OF
FACILITIES WITHIN THE CITY'S RIGHTS-OF-WAY;
PROVIDING AN EFFECTIVE DATE; PROVIDING FOR
ACCEPTANCE BY TXU GAS COMPANY; FINDING AND
DETERMINING THAT THE MEETING AT WHICH THIS
ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS
REQUIRED BY LAW.
WHEREAS, TXU Gas Company (herei.nafter called "TXU Gas") is, through its TXU
Gas Distribution division, engaged in the business of furnishing and supplying gas to the general
public in the City, including the transportation, delivery, sale, and distribution of gas in, out of,
and through the City for all purposes, and is using the public streets, alleys, grounds and rights-
of-ways within the City for that purpose under the terms ora franchise ordinance heretofore duly
passed by the goverrfing body of the City and duly accepted by TXU Gas; and
WHEREAS, the City and TXU Gas desire to amend said franchise ordinance to provide
for a different consideration and to authorize the lease of facilities within the City's rights-of-
way;
OF
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
, TEXAS: that
SECTION 1: The existing gas franchise ordinance between the City and TX!J Gas
Company is amended as follows:
Effective January 1, 2002, the consideration payable by TXU Gas for the rights
and privileges granted to TXU Gas by the franchise ordinance heretofore duly
passed by the governing body of this City and duly accepted by TXU Gas is
hereby changed to be four percent (4%) of the Gross Revenues, as defined in
Section 1.B. below, received by TXU Gas.
"Gross Revenues" shall mean all revenue derived or received, directly or
indirectly, by the Company from or in connection with the operation of the
System within the corporate limits of the City and including, without limitation:
(1) all revenues received by the Company from the sale of gas to all classes of
customers within the City;
(4)
(5)
all revenues received by the Company from the transportation of gas
through the pipeline system of Company within the City to customers
located within the City;
the value of gas transported by Company for Transport Customers through
the System of Company within the City ("Third Party Sales"), with the
value of such gas to be reported by each Transport Customer to the
Company, provided, however, that should a Transport Customer refuse to
furnish Company its gas purchase price, Company shall estimate same by
utilizing TXU Gas Distribution's monthly industrial Weighted Average
Cost of Gas, as reasonably near the time as the transportation service is
performed; and
"Gross revenues" shall include:
(a) other revenues derived from the following 'miscellaneous
charges':
charges to connect, disconnect, or reconnect gas within the
City;
ii.
charges to handle returned checks from consumers within
the City;
iii.
such other service charges and charges as may, from time
to time, be authorized in the rates and charges on file with
the City; and
iv. contributions in aid of construction" ("CIAC");
(b) revenues billed but not ultimately collected or received by the
Company; and,
(c) gross receipts fees.
"Gross revenues" shall not include:
(a)
the revenue of any Person including, without limitation, an
affiliate, to the extent that such revenue is also included in Gross
Revenues of the Company;
(b) sales taxes; and
(c) any interest income earned by the Company; and
Page 2 of 5
(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 within the City's right of way unless the
lessee is also an entity that pays franchise fees to the City.
Calculation and Payment of Franchise Fees Based on CIAC
O)
The franchise fee amounts based on "Contributions in aid of Construction"
("CIAC") shall be calculated on an annual calendar year basis, i.e., from
January 1 through December 31 of each calendar year.
(2)
Effect
Gas
The franchise fee amounts that are due based on CIAC shall be paid at
least once annually on or before April 30 each year based on the total
CIAC recorded during the preceding calendar year.
of Other Municipal Franchise Ordinance Fees Accepted and Paid by TXU
O)
If TXU Gas should at any time after the effective date of this Ordinance
agree to a new municipal franchise ordinance, or renew an existing
municipal franchise ordinance, with another municipality, which
municipal franchise ordinance determines the franchise fee owed to that
municipality for the use of its public rights-of-way in a manner that, if
applied to the City, would result in a franchise fee greater than the amount
otherwise due City under this Ordinance, then the franchise fee to be paid
by TXU Gas to City pursuant to this Ordinance shall be increased so that
the amount due and to be paid is equal to the amount that would be due
and payable to City were the franchise fee provisions of that other
franchise ordinance applied to City.
(2)
The provisions of this Subsection D apply only to the amount of the
franchise fee to be paid and do not apply to other franchise fee payment
provisions, including without limitation the timing of such payments.
TXU Gas Franchise Fee Recovery Tariff
(1)
TXU Gas may file with the City a tariff amendment(s) to provide for the
recovery of the franchise fees under this amendment.
(2)
City agrees that (i) as regulatory authority, it will adopt and approve the
ordinance, rates or tariff which provide for 100% recovery of such
franchise fees as part of TXU Gas' rates; (ii) if the City intervenes in any
regulatory proceeding before a federal or state agency in which the
Page 3 of 5
recovery of TXU Gas~ franchise fees is an issue, the City will take an
affirmative position supporting 100% recovery of such franchise fees by
TXU Gas 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 TXU Gas.
(3)
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 TXU
Gas.
Lease of Facilities Within City's Rights-of-Way. TXU Gas shall have the fight to
lease, license or otherwise grant to a party other than TXU Gas the use of its
facilities within the City's public rights-of-way provided: (i) TXU Gas first
notifies the City of the name of the lessee, licensee or user; the type of service(s)
intended to be provided through the facilities; and the name and telephone number
of a contact person associated with such lessee, licensee or user and (ii) TXU Gas
makes the franchise fee payment due on the revenues from such lease pursuant to
Sections I.A. and I.B. of this Ordinance. This authority to Lease Facilities Within
City's Rights-of-Way shall not affect any such lessee, licensee or user's obligation,
if any, to pay franchise fees.
SECTION 2: In all respects, except as specifically and expressly amended by this
ordinance, the existing effective franchise ordinance heretofore duly passed by the governing
body of the City and duly accepted by TXU Gas shall remain in full rome and effect according to
its terms until said franchise ordinance terminates as provided therein.
SECTION 3: This ordinance shall take effect upon its final passage and TXU Gas'
acceptance. TXU Gas shall, within thirty (30) days from the passage of this ordinance, file its
written acceptance of this ordinance with the Office of the City Secretary in substantially the
following form:
To the Honorable Mayor and City Council:
TXU Gas Distribution, a division of TXU Gas Company, acting by and through
the undersigned authorized officer, hereby accepts in all respects, on this the __
day of , 20 ., Ordinance No. amending the
current gas franchise between the City and TXU Gas and the same shall constitute
and be a binding contractual obligation of TXU Gas and the City.
Page 4 of 5
TXU Gas Distribution
A division of TXU Gas Company
By
Vice President
SECTION 4. It is hereby officially found and determined that the meeting at which this
Ordinance is passed is open to the public as required by law and that public notice of the time,
place and purpose of said meeting was given as required.
PASSED AND APPROVED BY THE
, TEXAS, tkis the day of
a quorum was present and voting..
CITY COUNCIL OF THE CITY OF
,2002, at which meeting
Mayor
ATTEST:
City Secretary
APPROVED AS TO FORM:
City Attorney
Page 5 of 5
CITY OF DENTON, TEXAS,
et al.,
Plaintiffs,
VS.
TXU ELECTRIC COMPANY,
et al.,
NO. 009383
Defendants.
IN THE DISTRICT COURT
DALLAS COUNTY, TEXAS
134XHJUDICIALDISTRICT
AGREED ORDER OF DISMISSAL WITH PREJUDICE
AS TO THE CITY OF DENTON
On this day, came on to be considered the above-referenced cause and Plaintiff, the City
of Denton, and Defendants, by and through their respective attorneys of record, announced that
the parties have compromised and settled their disputes and moved that this action be dismissed
with prejudice as to the City of Denton;
IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED that the above-styled
and numbered cause of action is dismissed with prejudice to the refiling of same as to the City of
Denton, that ali costs hncurred are taxed against the party incurring same, and that any and all
relief requested by the City of Denton not expressly granted herein is denied.
SIGNED this day of 2002.
JUDGE PRESIDING
APPROVED AND AGREED AS TO FORM AND CONTENT:
STRASBURGER & PRICE, L.L.P.
By:
Kevin J. Maguire
State Bar No. 12827900
ATTORNEY FOR PLAINTIFF
HUNTON & WILLIAMS
By:
David P. Poole
State Bar No. 16123750
ATTORNEY FOR DEFENDANTS
TXU ELECTRIC COMPANY
TXU GAS COMPANY AND
TXU CORP.
AGREED ORDER OF DISMISSAL- Page 2