2001-484FILE REFERENCE FORM 2001-484
X Additional File Exists
Additional File Contains Records Not Public, According to the Public Records Act
Other
Date Initials
Amended by Ordinance No. 2002-202 ~ 06/18/02 ~ ) R
Amended by Ordinance No. 2002-288 ~ 09/03/02 ~ )R
Amended by Ordinance No. 2008-179 ~ 08/19/08 ~ )R
ORDINANCE NO.
TO GAS DISTmUTION,
D~ISION OF TXU GAS COMPAq, ITS SUCCESSORS ~ ASSIGNS,
A F~CHISE TO F~SH, T~NSPORT ~ S~PLY GAS TO THE
GENE~ P~LIC ~ THE CITY OF DENTON, DENTON CO~TY,
TE~S, FOR THE T~NSPORT~G, DELIVERY, SALE, A~
DIST~BUTION OF GAS ~, OUT OF, A~ THROUGH S~D
~CIP~ITY FOR ~L P~OSES, PROVID~G FOR THE
PA~ENT OF A FEE OR CH~GE FOR THE USE OF THE ST~ETS,
~LEYS, ~ P~LIC WAYS, ~PE~G ~L P~VIOUS GAS
F~C~SE O~CES A~ O~ANCES ~ CO~LICT
HE~TH, PROVID~G THAT IT SHALL BE ~ LIEU OF OTHER
FEES ~ CH~GES, EXCEPT~G ~ VALO~M T~ES,
P~SC~B~G THE TE~S, CO~ITIONS, OBLIGATIONS A~
L~ITATIONS ~ER ~ICH SUCH F~NCHISE SH~L BE
EXERCISED, PROVID~G A SAV~GS CLAUSE, A SEVE~ILITY
CLAUSE, ~ ~ EFFECTIVE DATE
~E~AS, T~ G~ Dm~butlon Comply, a dlwmon ofTXU G~ Comply,
hereinafter refe~ed m as "Comply," ~ough a merger w~th Lone St~ G~ Comply,
assmed the prewous ff~chlse m use ~d occupy the pubhc rights-of-way ~d pubhc
prope~ of the Cl~ for the p~ose oflay~ng, mmntmmng, constructing, protecting ~d
operatmg their system as grmted by Ordln~ce No 82-56, as mended by Ordln~ce
No 90-108, ~d
~E~AS, ~e previous ~chlse refe~ed to above expired on Au~st 19,
2001, ~d
~E~AS, the Comply ~d ~e C~ty desire to enter into a new ~ch~se
a~eement to au~onze ~e Comply, its successors ~d asm~s, ~e rights to use ~d
occupy ~e pubhc rights-of-way ~d o~er pubhc prope~y of~e City as set fo~h ~n the
body of ~xs ordmmce, NOW, THE~FORE,
THE CO~CIL OF THE CITY OF DENTON HE.BY O~A~S
SECTION 1 G~NT OF AUTHO~TY
(A) The City of Denton, Texas, hereto after called "City," hereby ~ts to T~ G~
Dmmbut~on, a dlwmon of TXU Gas Company, herema~er called "Comply," ~ts successom
md asm~s, pnwlege ~d hcense to use md occupy the present ~d ~t~e Pubhc ~ghts-of-
Way of the City for the pu~ose of la. rig, mmntmmng, constructing, protecting, operating,
and replacing the System and all other appurtenantequlpment needed and necessaryto dehver,
transport and distribute gas ~n, out of, and through smd C~ty and to sell gas to persons, firms,
and corporations, ~nclu&ng all the general pubhc, w~thln the City's corporate hm~ts
(B) Smd privilege and license being granted by th~s ordinance Is for a term from
August 19, 2001 through December 31,2011 Provided, however, the Company shall pay the
franchise fee set forth m Section 20 on gross revenues as defined ~n Section 8 of this ordinance
beglnmng with the effective date ofthls ordinance Untd that date Company shall continue to
pay revenues based on the franchise fee payment due under the previous franchise which
expired on August 19, 2001
(C) The provisions set forth ~n this ordinance represent the terms and con&t~ons under
whmh the Company shall construct, operate, and mmntatn the System w~thxn the C~ty In
granting thru franchise, the C~ty does not in any manner surrender or wmve its regulatory or other
rights and powers under and by wrtue of the Constitution and statutes of the State of Texas as the
same may be amended, nor any or,ts rights and powers under or by wrtue of present or future
or&nantes of the C~ty, and it is expressly provided that nothing here~n shall ~mpmr the right of
the C~ty to fix, w~th~n constitutional and statutory hmlts, 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 res~dentml customers, commercial customers, ~ndustrlal customers, or to any
combination of such customers, within the terntorml limits of the C~ty as same now ernst or as
such hmits may be extended from t~me to t~me hereinafter and to ~nsure the maintenance of
Company's property in good repmr throughout the term of th~s franchise Company, by its
acceptance of this franchise, agrees that all such lawful regulatory powers and rights as the same
may be from t~me to time vested in the C~ty shall be ~n full fome and effect and subject to the
exercise thereof by the C~ty at any t~me By entenng into th~s franchise neither Company nor
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C~ty waives any clmms or defenses they may have ~n the litigation styled Ctty of Denton, Texas,
et al vs TXUElectrtc Company, et al, currently pending ~n the 134~ Judicial District Court of
Dallas County, Texas ("TXU L~t~gat~on")
SECTION 2 ACCEPTANCE OF TERMS OF FRANCHISE
(A) The Company shall have thirty (30) days from and after the passage and approval
of the ordmance to file ~ts written acceptance thereof with the C~ty Secretary The effective date
shall be determmed ~n accordance w~th the reqmrements of Section 28 and Section 13 01 of the
City Charter
(B) If the Company, ~ts successors and assigns, shall ftuthfully comply with all the
terms, and fmthfully perform all the duties and obhgatmns, and fatthfully observe and recogmze
all the limitations and regulations contmned m th~s ordinance and in the vahd ordinances of the
City relatmg to the conduct of Company's business adopted hereunder or under the pohce
powers of the C~ty, then the rights, franchises and privileges herein granted shall extend from the
date of the acceptance ofth~s ordinance by Company through December 31,2011, otherwise, the
City, after any material breach of the terms of th~s franchise has been determined by the City
Council of the C~ty, may declare all rights granted hereunder to be abated, forfeited or terminated
in accordance w~th the termination procedures provided hereto
(C) At mldmght on December 31,2011, ALL rights, franchises and pnwleges herein
granted, unless they have already at that t~me ceased or been forfeited, shall at once cease and
terminate
SECTION 3 NO THIRD PARTY BENEFICIARIES
This franchise is made for the exclusive benefit of the C~ty and the Company, and
nothing here~n ~s mtended to, or shall confer any right, claim, or benefit in favor of any third
party
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SECTION 4 SUCCESSORS AND ASSIGNS
No assignment or transfer of this franchise shall be made, in whole or in part, without
approval of the City Council of the City The City will grant such approval unless withheld for
good cause Upon approval, the rights, privileges, and franchise herein granted to the Company
shall extend to and include its successors and assigns The terms, conditions, provisions,
requirements and agreements contmned in this franchise shall be bln&ng upon the successors
and assigns of the Company
SECTION 5 COMPLIANCE WITH LAWS~ CHARTER AND ORDINANCES
This franchise is granted subject to the laws of the United States of America and its
regulatory agencies and commissions and the laws of the State of Texas, the Denton City Charter
of 1959, as amended, lnclu&ng Article XIII "Franchises" of said Charter, and all other applicable
ordinances of the City of Denton, not inconsistent herewith
SECTION 6 CONFLICTING ORDINANCES
All ordinances and parts of ordinances of the City of Denton, Texas, m conflict with the
provisions of this ordmance are hereby repealed, to the extent of that conflict only
SECTION 7 NOTICES
Any notices required or desired to be given from one party to the other party to this
ordinance shall be m writing and shall be given and shall be deemed to have been served and
received (whether actually received or not) if (0 delivered in person to the address set forth
below, (n) deposited in an official depository under the regular care and custody of the Umted
States Postal Service located within the confines of the United States of America and sent by
certified mml, return receipt requested, and addressed to such party at the address hereinafter
specified, or (m) delivered to such party by courier receipted delivery Either party may
designate another address within the confines of the continental United States of America for
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not~ce, but until wnttan notice of such change is actually received by the other party, the last
address of such party designated for not,ce shall remain such party's address for notice
CITY COMPANY
City Manager Town Manager
C~ty of Denton TXU Gas D~stnbut~on
215 E McKmney 100 W Mulberry
Denton, Texas 76201 Denton, Texas 76201
SECTION 8 DEFINITIOI~S
For the purposes of this ordinance, the following terms, phrases, words, and their
derivations shall have the meanings g~ven hereto When not ~ncons~stent with the context, words
~n the present tense ~nclude the future, words in the plural number include the singular number,
and words ~n the smgular number include the plural number The word "shall" is always
mandatory and not merely directory
(A) "City" shall mean the City of Denton, Texas
(B) "Company" shall mean TXU Gas Distribution, a d~vls~on of TXU Gas Company
(C) "Gross Revenues" shall mean all revenue derived or received, d~rectly or
indirectly, by the Company from or in connection with the operation of the System and for ~ts
services and related servmes provided by the Company to residential, commercial, ~ndustnal,
governmental, mtmmlpal and all other customers located within the corporate limits of the C~ty,
save and except sales to the Spencer Generating Station as ~ndmated in subsection 8(C)(5)(e)
The revenues included in Gross Revenues shall ~nclude w~thout hmltatlon
( 1 ) all revenues received by the Company from the sale of gas within the City
to all customers w~th~n the C~ty,
(2) all revenues received by the Company from the transportation of gas,
including third party natural gas, through the System of Company to residential,
commemml, ~ndustnal and transportation service customers and all other customers
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within the City,
(3) to the extent not included in paragraphs (1) and (2), above, the total value
of gas, ~ncludmg third party natural gas, whmh shall ~nclude all affiliate revenues,
transported ~n Denton through the System of Company to all customers w~thln the C~ty,
and
(4) other revenues of the Company derived from lawful charges (a) to
connect gas service within the City, (b) to d~sconnect gas serwce within the City, and (c)
to handle returned checks from customers within the C~ty and other such serwce charges
and charges as may, from time to time, be authorized ~n the rates and charges on file with
the City
(5) Gross revenues shall ~nclude, regardless of the outcome of the TXU
htlgatlon mentioned in Section I(C), all transportation service, ~ndustnal and
mlscellaneousrevenues Gross revenues shall not ~nclude (a) the revenue ofany person
including w~thout hmitat~on, a TXU affihate, to the extent such revenue is already
mcluded m Gross Revenues of the Company (b) taxes ~mposed by law on customers that
the Company is obhgated to collect and which the Company passes on, m full, to the
applicable tax authority or authorities other than sales taxes, (c) any ~nvestment ~ncome
earned by the Company (d) sales taxes, fee on fee revenues or monies received by
Company from customers as a contribution in aid of construction unless these revenues
are found by a finaljudgment of the Court or through a settlement of the TXU lltlgat~onto
be included within "Gross Revenues", (e) revenues derived from sales to the Spencer
Generating Station (f') the parties agree that at the exclusive option of the City, the
definition of "Gross Revenues" under th~s franchise will be amended to ~nclude all
addmonal revenues which are found by a final judgment of the court or through a
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settlement of the TXU ht~gatlon to be ~ncluded or ~ncludable within "Gross Revenues"
The parties further agree to amend thru fi'anchtse to adopt and approve rate ordinances
and tariffs as necessary m order to add any such add~tlonaI revenues
(D) "Person" shall mean any natural person, or any assoc~aUon, firm, parmershlp,
joint venture, corporation, or other legally recognized entity, whether for-profit or not-for-profit,
but shall not, unless the context clearly intends otherwise, include the City or any employee,
agent, servant, representative or officml of the C~ty
(E) "Public Raght-of-Way" shall mean pubhc streets, alleys, highways, bridges,
easements, pubhc places, publtc thoroughfares, grounds, s~dewalks and all other public real
property of the City, as they now exmt or may be hereafter constructed, opened, lind out or
extended within the present limits of the City, or in such temtory as may hereafter be added to,
consohdated or annexed to the City
(F) "System" shall mean all of the Company's pipes, pxpehnes, gas roams, laterals,
feeders, regulators, meters, fixtures, connections, and any other equipment or ~nstmmentalmes
used xn or incident to provldmg dehvery, transportation, dxstnbuUon, supply and sales of natural
gas for heatmg, hghtmg, power, and any other purpose for whmh natural gas may now or
hereafter be used, located within the copporate hmlts of the C~ty
(G) "TXU Affihate" shall mean xn relation to the Company, a Person that controls, xs
controlled by, or is under common control w~th the Company As used ~n th~s defimtlon, the
term "control" means, w~th respect to a Person that ~s a corporation, the ownershap, d~rectly or
lndlrectly, of more than 50% of the votxng securities of such person or, with respect to a Person
that is not a corporation, the power to direct the management or pohcles of such Person, whether
by operation of law, by contract or otherwise
(H) Transportation Service Customer shall mean any person or entity for which
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Company transports gas through the pipehne system of Company within the City to customers for
delivery or consumption within the City
SECTION 9 PARAGRAPH FIEADINGS CONSTRUCTION
The paragraph headings contmned in this ordinance are for convenience only and shall m
no way enlarge or limit the scope or meaning of the various and several paragraphs hereof Both
parties have participated in the preparation of this ordinance and this ordinance shall not be
construed either more or less strongly agmnst or for either party
SECTION 10 CONDITIONS OF OCCUPANCY
(A) All construction and the work done by Company, and the operation of its
business, under and by virtue of this ordmance, shall be in conformance with the ordinances,
rules and regulations of City now m rome and that may hereafter be adopted by the City relating
to the use of its Public Rights-of-Way and grounds of the City
(B) Company shall lay, mmntmn, construct, operate, and replace its papes, mmns,
laterals and other eqmpment so as to interfere as little as possible with traffic The placement of
all mams, pipes, laterals, and other appurtenant equipment shall be subject to the approval of the
City Manager or his designee pnnr to construction which approval shall not unreasonably be
withheld Reproducible copras of all nraps showmg the location of all mains, pipes, laterals, and
other appurtenant equipment shall be furnished to the City Manager
(C) In determining the location of Company's pipeline within the City, Company
shall minimize interference with then-existing underground structures of City or other utility
franchisees Likewise, in deterunmng the location of the facilities of the City and other utility
franclusees w~thln the City, City shall mlmmize interference with existing facilities of Company
and shall request other utility franchisees to rmmmlze interference with existing facilities of
Company
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(D) When Company makes or causes to be made excavations or places or causes to be
placed obstructions m any Pubhc Right-of-Way or other pubhc place, the pubhc shall be
protected by barriers and hghts placed, erected, marked and mmntmned by Company m
accordance w~th apphcable state and federal reqmrements Company shall repmr, clean up, and
restore to as good a condmon as before commencement of work, all Pubhc R~ghts-of-Way or
other pubhe places disturbed dunng the construction and repair of~ts gas dlstnbutlng system In
the event the Company fails to restore the Pubhc Rights-of-Way or pubhc places to as good a
eondmon as before the commencement of the work and within a reasonable Ume, the City may
restore or mtuntam same, after g~wng the Company thirty (30) days' written not~ce, prowded
however that ff the Company ~s proceeding thhgently to restore the property, the tame for
restoration shall be extended for such t~me as ~s necessary for the Company to complete the
restoratmn If the Company fails to restore the Pubhc R~ghts~of-Way or pubhc places
appropriately, the Company will receive a bill for the cost of the C~ty repamng same The
Company shall, w~tinn thirty (30) days after rece~wng such bill, pay the actual cost for such
service
After the third such Instance of a fmlure, and in each Instance of failure thereafter, to
restore the Pubhc R~ght of Way or pubhc places appropriately m any calendar year, the City may
include a penalty ofup to ten percent (10%) ofthe C~ty's cost ofrepmrs Any penalty ofless than
One Hundred Dollars ($100 00) shall be wmved as de mtmmus
(E) If C~ty abandons any Pubhc Right-of-Way ~n whmh Company has facilities,
Company shall have the right to continue ~ts use of the former Pubhc Right-of-Way upon
reasonable conditions to be determined by the C~ty
(F) The Company will msure agatnst all the risks undertaken pursuant to thru franchtse
including general habfl~ty ~nsurance w~th a combined smgle hm~t of $1,000,000 per occurrence
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Such ansurance may be in the form of self-ansurance to the extent permatted by applicable law,
under a Company approved formal plan of self-msurance mmntaaned m accordance wath sound
accounting and risk-management praetaees Such msurance coverage or plan of self-insurance as
subject to the approval of the Rask Manager of the City, whose approval shall not be unreasonably
withheld or delayed A certlf'lcate of msurance shall be provaded to the City annually, no later
than October 1sC for each year dunng the term of Company's fi:anchlse, evldencmg such coverage,
and addataonally wattun tharty (30) calendar days of any substantial changes m the nature of ats
coverage under thas Sectaun Should Company elect to self-insure, ars annual notice to the City
shall contain mformataon clearly adentafylng the process for filmg a claim agaanst such coverage
The Caty acknowledges that Company as self-insured or desares the abahty to be self-
insured Nothing herem prevants the C~ty from agreeing to substatute self-msurance coverage for
the prevaously hsted coverage requarements, upon proof of such self-insurance submatted to the
Caty, and such agreement shall not be unreasonably wathheld
SECTION 11 MAPPING OF DISTRIBUTION SYSTEM
The Company shall wlthm one (1) year after the grantmg ofthas franchise file wath the
City Manager or has desagnee a map or maps in eonvement book, atlas form, or digital format 0f
avaalable and requested by Caty) or shall correct and bnng up to date any map or maps now on
file (meluchng providing the map or maps in dagltal format, if avaalable and requested by the
City) The maps shall show with reasonable detail Company's entire gas dastnbutmg system m
the Caty, as same then exasts, which shall include the locanons and damenslons and depths, to the
extent reasonably possible, of all mmns, papes, manholes, connections wath premases and other
apparatus employed by Company, and whach map shall be corrected and brought up to date by
Company annually The mformanon provaded pursuant to thas paragraph shall be based on
Company' s original mstallataon speelficataons unless otherwase noted It as further agreed by
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City and Company that provision of this information does not relieve the Company, City or other
third parties from an obhgatlon to utilize all appropriate procedures to locate underground
facilities, aneludmg the obhgaUon to notify a notification center estabhshed pursuant to Tex
Utility Code Chapter 251, prior to conducting work an the right of way such as excavating,
dnlhng, underground bonng, jacking, or open cutting
SECTION 12 RELOCATION OF COMPANY EQUIPMENT
(A) If the City m constructing its sewers, streets, utlhtles or other public works should
require any mares, p~pes or other System faclhues or equipment to be sh~fied or relocated, such
mains, p~pes or other System equipment shall be timely shifted or relocated by Company at its
own expense as and when required by the City The City shall not reqmre Company to remove
the facllmes entirely from a street, sidewalk, curb, alley, highway, or public way unless suitable
alternatives are available for relocation of its facilities
(B) When the Company is required by the C~ty to remove or relocate ~ts mains,
laterals, and other System facilities or equipment to accommodate construction ofPubhc R~ghts-
of-Way or other public or City-owned faelhtles and the Company ~s ehgable for reimbursement or
surcharge under federal, state, county, local or other programs for reimbursement of costs and
expenses Incurred by the Company as a result of the ordered relocation, and the application for
reimbursement or surcharge ~s reqmred by statute, written governmental policies, or rules to be
filed and processed by the City, the C~ty shall make reasonable efforts to nmely and promptly
noUfy the Company of any apphcatlon deadlines of which it may be aware, and Company costs
and expenses shall be included in any application by City for reimbursement, If Company submits
its costs and expense documentation to the City prior to the filing of the application Nothing
herein shall be construed to prohibit, alter or modify in any way the right of the Company to seek
or recover a surcharge pursuant to Section 104 112 of the Texas Utilities Code
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SECTION 13 LAYING OF LINES IN ADVANCE OF PAVING
(A) Whenever the City shall conclude to pave any Public Right-of-Way in which
mains and pipes already exist or m which Company may propose to lay its mains or pipes, the
Company may be required, at no expense to the City, in advance of such paving, to renew such
mains or pipes, if defective or inadequate m size pipes and to lay service lines, or renew same, if
inadequate in size or defective, to the property lines where buildings are already located without
regard to the number of customers along the line
(B) The Company shall be given one hundred twenty (120) days' wnttan notice of the
lmentlon of the City to pave any such Pubhe Right-of-Way and specifying the new locations for
the lines Wlthm one hundred twenty (120) days fi.om receipt of such notice, the Company shall
untlate work and thereafter proceed m a workmanlike manner to completion of the necessary
work If the Company should fall to so proceed, and such street or alley is thereupon paved,
except in an emergency, the Company shall for two (2) years thereafter not be allowed to cut such
pavement or excavate in such paved street or alley for any purpose, except by written permission
of the City Manager under such terms and conditions as the City Manager may reasonably
subscribe
SECTION 14 CONFLICTING FRANCHISES
If the Company, in laying its pipes, shall come into conflict with the rights of any other
person or corporation having a franchise fi.om the City, the City Council shall decide all
questions eoneermng the conflicting rights of the respective parties, and shall determine the
location of the structures of the said parties and shall reconcile their differences The Company
records shall be available to City for review and inspection for compliance with this franchise at
reasonable t~mas and upon reasonable notice
SECTION 15 INSTALLATION OF METER
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Company shall ~nstall upon or ~mmedlately adjacent to the premises of each residential
customer a meter of standard type for the purpose of accurately measunng the gas consumed by
such customer If a meter ~s installed m or near the Pubhc R~ghts of Way, Company agrees to
d~scuss w~th the C~ty Engineer or fus delegate the aesthetms ofthe meter placement Ifagreement
cannot be reached, the Company may mstall standard eqmpment
SECTION 16 EXTENSIONS FOR RESIDENTIAL CUSTOMERS
Company shall be required to extend d~stnbutmn mmns m any street up to one hundred
(100) feet for any one residential customer, ~n accordance with ~ts extension policy that has been
approved by the City, prowded, however, ~f the ant~mpated connected load is calculated to
profub~t Company a reasonable return on ~ts ~nvestment as may be allowed by statute, law, or
regulation and the provision of service ~s not econommally feasible, the cost of such extension
shall be borne by customer Company shall not be requtred to extend transmission mains ~n any
Public R~ghts-of-Way w~th~n City or to make a tap on any transmission mmn w~tfun C~ty unless
Company agrees to such extension by a written agreement between Company and a customer
SECTION 17 DUTY TO SERVE
The Company hereby agrees that it wall not arbitrarily refuse to prowde servme to any one
that it ~s economically feasible for the Company to serve In the event that a party ~s refused
service, smd party may request a heanng before the C~ty Counml of the C~ty, smd heanng to be
held w~thln forty-five (45) days from the date of the request for heanng The Councd may order
the Company to prowde service, amend the franchise or take any other actton necessary to bnng
the Company into compliance with the ~ntent of the Counml ~n granting thru franchise, ~ncludmg
termination or forfeiture of the franchise ~n accordance w~th Section 25 The Council shall render
~ts op~mon at its next regular meeting but m no event shall ~t be required to act In less than seven
(7) days
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SECTION 18 RATES
Company shall furnish reasonably adequate service to the pubhc at reasonable rates and
charges therefor and Company shall mmntmn ~ts System ~n good order and cond~taon Such rates
shall be estabhshed ~n accordance wath all apphcable statutes and ordinances Company shall
mmnta~n on file w~th the C~ty copaes of ~ts current tariffs, schedules or rates and charges,
customer serwce provaslons, and hne extensaon pohcles The rates and charges collected from ~ts
customers in the C~ty shall be subject to revision and change by e~ther the C~ty or Company ~n the
manner provided by law
SECTION 19 INSTAI,I,ATION CHARGES, DEPOSITS AND OTHER
COMPANY CHARGES
(A) In add~tmn to the rates charged for gas supphcd and transported, Company may
make and enforce reasonable charges, rules and regulations for servace rendered m the conduct of
1ts busaness m accordance wath ~ts tariffs, rate schedules, servme pohmes, and Quahty of Servtce
Rules as approved by the Caty and filed w~th the Texas Rmlroad Commass~on Company may
reqmre, before furmslung service, the executmn of a contract for such servme
(B) Company shall be entitled to reqmre each and every customer, before servme ~s
commenced or remstated, to satisfactorily estabhsh credit pursuant to the Company's Quahty of
Servme Rules as may be m effect dunng the term ofthas franchise Smd depomt shall be retmned
and refunded m accordance w~th such Quahty of Servme Rules and shall bear anterest, as
provaded an Sectaon 183 001 through 183 006 Tex Utd Code, (Vemon's 2001), anclud~ng any
and all future amendments to smd Amcle Upon termanatmn of service, Company shall be
entitled to apply said deposit, w~th accrued ~nterest, to any ~ndebtedness owed Company by the
customer makmg the deposat
(C) Company shall have the right to contract wlth each customer with reference to the
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installation of, and payment for, any and all of the gas piping from the connection thereo fwlth the
Company's main in the right-of-way to and throughout the customer's premises Company shall
own, operate and maintain all sennee lines, which are defined as the supply lines extenchng from
the Company's main to the customer's meter where gas is measured by Company The customer
shall own, operate, and maintain all yard lines and house piping, which are defined as supply lines
extendang fi.om the point of connection with the Company's customer meter where gas is
measured to the point of connection with customers house piping
SECTION 20 PAYMENTS TO THE CITY
(A) In consideration of the privilege and license granted by Caty to Company to use
and occupy the Public Rights-of-Way m the City for the conduct of as business, Company, its
successors and assigns, agrees to pay and City agrees to accept such franchise fees in the anaount
and manner described herein Such payments shall be made on a quarterly basis, on or before the
forty-fifth (45th) day following the end of each calendar quarter The franchise fee shall be a sum
of money that shall be equivalent to four percent (4%) of the quarterly Gross Revenues, as
defined an Section 8(C), received by the Company from the sale of gas to its customers, including
but not limited to residential, commercial, industrial, governmental, mumclpal and Iransportatlon
service customers wahm the corporate hmlts of Cay The first payment hereunder shall be due
and payable on or before Apnl l, 2002, and shall be based upon Company' s Gross Revenues
received during the calendar year ending December 3 l, 2001 and shall be payment for the rights
and privileges granted hereunder dunng the period of January 1, 2001 through December 31,
2001 Subsequent payments shall be due and payable quarterly thereafter on or before the fifteen
(15~) day of the second month following the end of the calendar quarter upon which the payment
is based and shall be payment for the rights and privileges granted hereunder dunng the calendar
quarter in which payment is made, that it, the quarterly payments shall be as follows
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Payment Quarter Upon Which Quarter For Which
Due Date Payment Is Based Payment Is Made
Mayl5 Jan 1-Mar 31 Jan 1-Mar 31
Aug 15 Apr 1-June30 Apr 1-June30
Nov 15 July 1 - Sept 30 July 1 - Sept 30
Feb 15 Oct 1-Dec 31 Oct 1-Dec 31
Provided, however, ~f Company, prior to April 1, 2002, can prowde the City with sufficient
evidence to demonstrate that Company's predecessor--Lone Star Gas Company--had been
prepaying ats francluse fee under the franctuse entered mto by the part~es under Ordinance No 82-
56 so that each payment constituted a payment for the rights and pnwleges granted dunng the
calendar year ~n whmh the payment ns made, the part,es agree to amend this franchise to revise the
quarterly payment schedule to reflect and account for the prepayment
(B) The value of gas transported by Company for Transport Customers shall be
determined as set forth ~n th~s paragraph Should the transportation customer fml or refuse to
d~sclose or furnish such purchase price to Company, Company shall estabhsh same by ut~hz~ng
110% of the Houston Sh~p Channel ~ndex of prices for large packages of gas pubhshed each
month m Inside FERC's Gas Market Report (or a successor pubhcat~on or another pubhcatlon
agreed upon by the C~t¥ and Company) for the period of t~me the transportation service ~s
performed Company agrees to g~ve to C~ty, upon Request, access to confidential mformat~on so
removed m order for the C~ty to verify the accuracy of the ~nformat~on prowde to the C~ty under
the proms~ons o f th~s paragraph Failure or ~nabfi~ty of Company to collect the 4% franchise fee
from ~ts Transport Customers does not relieve ~t of ~ts respons~bthty and obhgatlons to remit
payment m the amount of 4% of value of such gas to the C~ty
(C) The aforesmd franchise fee shall be in heu of any and all other additional
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occupation taxes, municipal hcense, permit and inspection fees, street or alley rentals or charges,
and all other and additional charges, levies, fees, and rentals of whatsoever kind or character
which C~ty may now impose or hereafter levy and collect from Company or Company's agents,
save and except the Company's obhgatlon to reimburse the City for street repairs and regulatory
expenses in excess of $25,000 under Section 103 022 of the Gas Utility Regulatory Act (Tex
Utd Code Section 103 022) or any successor law, and the payment of ad valoremtaxes, sales and
use taxes, specml taxes, and assessments for public improvements, and any fees associated vath
the use of City-owned poles, which are not affected by Company's payment of franchise fees
hereunder Franchise fees are payable by Company to C~ty m addition to general or special ad
valorem taxes whmh City is authorized to levy and impose upon real and personal property, sales
and use taxes, and the spemal taxes and assessments and fees excepted above Should City not
have the legal power to agree that the payment of the foregoing sums of money shall be in lieu of
occupation taxes, licenses, fees, street or alley rentals or charges, easements or franchise taxes,
then City agrees that it will apply so much of smd sums of money paid as may be necessary to
satisfy Company's obhgatlons, if any, to pay such occupation taxes, hcenses, charges, fees or
rentals
(D) If the Company fails to pay when due any payment prowded for in th~s Section,
Company shall pay such amount plus interest at the current prime rate per annum, from such due
date until payment is received by City The reimbursement of the C~ty by Company for hmng
experts ~n connection wath the rate making process pursuant to state law for which the Company
may be legally liable shall not be deducted from the gross receipts payment
(E) Company shall not~fy the City of the identity of any customer of Company that
changes from a tariffed rate to a contract rate with forty-five (45) days of such change
SECTION 21 BOOKS AND RECORDS
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(A) Company agrees that at the time of each quarterly payment, Company shall also
submit to the C~ty a sworn statement showing 0) its Gross Revenues for the preceding calendar
quarter from the sale of gas to ~ts customers, including but not hm~ted to residential, commercial,
~ndustnal, governmental and mtm~clpal customers, within said corporate hm~ts, meludmg the
amount of revenues received by Company for the transportation of gas, (n) the coded identity of
Company's transportation service customers dunng the precedmg calendar quarter, and (Ill) the
value, volume, and transport fee of gas transported dunng the proceeding calendar quarter for
such transportation service customers, calculated m accordance w~th Section 20(B) above Upon
request, City shall have access at Company's office to the actual ~dent~ty of Company's Transport
Customexs and their supphers as long as such lnformatlun shall remain confidential, and no
copies of such reformation may be made
(B) City may, if it sees fit, have the books and records of Company examined by a
representative of said City to aseertam the correctness of the sworn reports agreed to be filed
herem If such an examination reveals the Company has underpaid the City, then C~ty shall
provide Company wntten notification from City regarding the existence of such underpayment,
Company shall remit the amount of underpayment to City w~thm 10 days
SECTION 22 RESERVATION OF RIGHTS: GENERAL
(A) The City reserves to itself the right and power at all times to exercise, in the
mterest of the pubhc and m accordance w~th state law, regulation and control of Company's rates
and serwees to insure the rendenng of efficient pubhc service at reasonable rates, and the
maintenance of Company's System m good repar throughout the terms of this franchise
(B) The rights, privileges, and franchises granted by th~s ordinance are not to be
considered exaluslve, and C~ty hereby expressly reserves the right to grant, at any time, like
privileges, rights, and franchises as it may see fit to any other person or corporation for the
18
purpose of fum~slung gas for light, heat, and power and for City and the ~nhabitants thereof
(C) C~ty expressly reserves the right to own and/or operate its own system for the
purpose of transporting, delivering, chstnbutlng, or selling gas to and for the City and inhabitants
thereof and may, in accordance with apphcable state law and the Denton C~ty Charter, purchase
this franchrse from the Company
SECTION 23 RIGHT TO INDEMNIFICATION AND TO BE HELD HARMLESS
The Company shall ~ndemmfy, defend and hold harmless the City and all of its present,
future and former agents, employees, officials and representatives in their officml, inchvidual and
representative capac~t~as from and agmnst any and all habihty created by, arising from or an any
manner relating to the construction, operataon, maintenance, repair or replacement of the
Company's System and facilities or the use of the Public Rights-of-Way or in any way growing
out of the granting of th~s franchise, e~ther directly or lnd~rectly, or by reason of any act,
neghgence, or nonfeasance of the contractors, agents or employees of the Company As used
here~n, the term "habfllty" includes, but is not hm~ted to, any and all claims, demands, causes of
action, judgments, hens, and expenses 0ncluchng attorney's fees, whether contractual or
statutory), costs and damages (whether common law or statutory, and whether actual, punitive,
consequential or incidental) of any conceivable character, due to or arising from ~njunes to
persons 0nelud~ng death) or to property (both real and personal) The indemmty provided hereto
expressly includes any habfllty arising through the doctnnes of strict or products habfl~ty and any
habfllty arising trader the constitutions of the Umted States or Texas Upon the commencement
of any suit or proceeding at law agmnst the C~ty relating to or covenng any matter covered by this
~ndemmty, the Caty shall tender the defense of said suat or proceeding at law to the Company, and
the Company shall thereupon at its own cost and expense defend, compromise, or settle the same
Any settlement revolving a clmm or cause of action against the C~ty shall, unless otherwise
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agreed to by the C~ty, release the C~ty from any and all hablhty as a result of sa~d clatm or cause
of action. Tbas mdenm~ty and hold harmless agreement shall not apply to any s~tuatlon to the
extent the e~ty ~s solely hable for the actions, su~ts or claims of injury or damage by reason of
City's sole neghgence
SECTION 24 RENEGOTIATION
If either C~ty or Company requests renegot~atlon of any term of th~s franchise ordinance,
Company and C~ty agree to renegot~ate m good fatth rews~ons to any and all terms of th~s
franchise ordinance If the part, es cannot come to agreement upon any prows~ons being
renegot~ated, then the ex~st~ng prows~ons of the franchise ordinance w~ll continue in effect for the
rema~mng term of the franchise
SECTION 25 TERMINATION
(A) In addition to any rights set out elsewhere ~n this orthnance, the C~ty reserves the
right to terminate the franchise and all rights and privileges pertalmng thereto, m the event that
the Company wolates any mater~al prows~on of the franchise or the Company becomes ~nsolvent,
or ~s adjudged bankrupt
(B) Procedures for Termination
(1) The C~ty may, at any t~me, terminate th~s franchise for a contmumg
mater~al violation by the Company of any of the substantial terms hereof In such event,
the City shall g~ve to Company written not~ce, specifying all grounds on which
termination or forfeiture ~s cla~med, by registered ma~l, addressed and dehvered to the
Company at the address set forth in Section 7 hereof The Company shall have s~xty (60)
days after the receipt o f such not,ce w~thm which to cease such wolat~on and comply v~th
the terms and provisions hereof In the event Company fatls to cease such wolat~on or
otherwise comply w~th the terms hereof, then Company's franchise ~s subject to
20
termination under the following provisions Provided, however, that, if the Company
commences work or other efforts to cure such violations within thirty (30) days after
receipt of written notice and shall thereafter prosecute such curative work with reasonable
diligence until such curative work is completed, then such violations shall cease to exist,
and the franchise will not be terminated
(2) Termination shall be declared only by written decision of the City Council
after an appropriate pubhe proceeding whereby the Company is afforded the full
opportunity to be heard and to respond to any such notice of violation or failure to
comply The Company shall be provided at least ten (10) days prior written notice ofanY
public heanng eoncermng the termination of the franchise In addition, ten (10) days
notice by publication shall be given of the date, time and place of any pubhe heanng to
interested members of the public, which notice shall be paid for by the Company
(3) The City, after full public heanng, and upon finding material violation or
£allure to comply, may terminate the franchise or excuse the violation or failure to
comply, upon a showing by the Company of mitigating circumstances or upon a showing
of good cause of said violation or failure to comply as may be determined by the City
Council
(4) Nothing herein stated shall prevent the City from seeking to compel
eomphance by suit in any court of competent jurisdiction if the Company fails to comply
with the terms of flus franchise after due notice and the providing of adequate time for
Company to comply with said terms
SECTION 26 SEVERABILITY
Tbas ordinance and every provision hereof, shall be considered severable, and the
invalidity or unconstitutionality of any section, clause, provision, or portion of this ordmanee
21
shall not affect the vah&ty or constltut~onahty of any other portion of this ordinance If any term
or prows~on of this or&nance is held to be illegal, invalid or unenforceable, the legahty, val~&ty
or unenforceab~hty of the remmmng terms or prows~ons of th~s ordinance shall not be affected
thereby
SECTION 27 NO WAIVER
E~ther C~ty or the Company shall have the nght to waive any requirement contained m th~s
ordinance, which ~s ~ntended for the Wmvlng party's benefit, but, except as otherwise provided
here~n, such waiver shall be effective only ~f ~n writing executed by the party for whose benefit
such reqmrement is intended No waiver of any breach or violation of any term ofth~s or&nance
shall be deemed or construed to constitute a wmver of any other breach or violation, whether
concurrent or subsequent, and whether of the same or a different type of hreach or violation
SECTION 28 EFFECTIVE BATE
This franchise shall be effective only after (a) its final passage by the City Council, (b)
receipt by the C~ty of Company's acceptance as provided by Section 2 here~n, and (c) final
pubhcat~on as required by law
The ordinance shall be passed by a malonty vote of the entire C~ty Council at three regular
meetings of Council The City Secretary shall pubhsh, at the Company's expense, the complete
text ofth~s or&nance in a newspaper of general circulation Pubhcatlonshalltake place once each
week for three consecutive weeks ~n the official newspaper pubhshed in the Cny of Denton The
ordinance shall not become effective until thirty days after its final passage in accordance with the
City Charter
The above-referenced actions having taken place, the effective date ofth~s ord~nancewfll
be January 17, 2002
PRESENTED, AND GIVEN first rea&ng on the 18 day of September , 2001, at a
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regular meeting of the City Council of the City of Denton, Texas, and given second reading,
passed and approved on the 1.8 dayof December 2001., by a vote of 5 .ayesand ~
noes at a regular meeting of thc City Council of the City of Denton, Texas
RONI BEASLEY,z~,~Y'OR ~t~O TEM
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
BY
The City of Denton, Texas, acting hereto by its duly constituted authorities, hereby
declares the foregoing Or&nance passed on first reading on the 18th day of September, 2001, and
passed on second reading on the 16day of October ., 2001, and passed on third
r adln o . .y n ,,y
17 day of January ,
/s/ Abstmned /s/
Eullne Brock, Mayor M~k-~ough'~, ~Mem~r
Rom Behsley, Council ~;~inber
Isl ~t,
Jan~(~u,!~t'll~-, Council Menjkler// l~lke l~hflhps, Co"~illed-~l~mber
Ra~ond ~on, Council Member
23
The above and foregoing ordinance read, adopted on first reading and passed to second reading
by the following votes, this the 18th day of September, 2001, at a regular session of the C~ty
Council
Euhne Brock, Mayor, abstained from voting
Mark Burroughs, Councd Member, voting aye
Rom Beasley, Council Member, voting aye
Perry McNe~ll, Councd Member, voting aye
Jane Fulton, Council Member, voting aye
M~ke Phillips, Council Member, voting aye
Raymond Redmon, Council Member, voting aye
The above and foregoing ordinance read, adopted on second reading and passed to third reading
by the following votes, th~s the 16th day of October, 2001, at a regular session of the C~ty Councd
Euhne Brock, Mayor, abstained from voting
Mark Burroughs, Council Member, absent
Rom Beasley, Cotmcfl Member, voting aye
Perry McNefll, Council Member, voting aye
Jane Fulton, Council Member, voting aye
M~ke Phllhps, Council Member, voting aye
Raymond Redmon, Council Member, voting aye
The above and foregoing ordinance read, adopted on third reading and passed by the following
votes, this the 18th day of December, 2001, at a regular session of the C~ty Council
Euhne Brock, Mayor, abstained from voting
Mark Burroughs, Council Member, voting aye
Rom Beasley, Council Member, voting aye
Perry McNelll, Council Member, voting aye
24
Jane Fulton, Council Member, voting aye
Mike Phflhps, Council Member, voting aye
Raymond Redmon, Council Member, absent
25
ACCEPTANCE
WHEREAS, the C~ty Council of the C~ty of Denton, Texas, &d on the 18th day of
De c emb er ,2001, enact an Or&nance entitled
AN ORDINANCE GRANTING TO TXU GAS DISTRIBUTION, A DIVISION OF TXU GAS
COMPANY, ITS SUCCESSORS AND ASSIGNS, A FRANCHISE TO FURNISH,
TRANSPORT AND SUPPLY GAS TO THE GENERAL PUBLIC 1N THE CITY OF DENTON,
DENTON COUNTY, TEXAS, FOR THE TRANSPORTiNG, DELIVERY, SALE, AND
DISTRIBUTION OF GAS IN, OUT OF, AND THROUGH SAID MUNICIPALITY FOR ALL
PURPOSES, PROVIDiNG FOR THE PAYMENT OF A FEE OR CHARGE FOR THE USE OF
THE STREETS, ALLEYS, AND PUBLIC WAYS, REPEALING ALL PREVIOUS GAS
FRANCHISE ORDiNANCES AND ORDINANCES IN CONFLICT HEREWITH, PROVIDING
THAT IT SHALL BE IN LIEU OF OTHER FEES AND CHARGES, EXCEPTING AD
VALOREM TAXES, PRESCRIBING THE TERMS, CONDITIONS, OBLIGATIONS AND
LIMITATIONS UNDER WHICH SUCH FRANCHISE SHALL BE EXERCISED, PROVIDING
A SAVINGS CLAUSE, A SEVERABILITY CLAUSE, AND AN EFFECTIVE DATE
WHEREAS, smd Or&nance was on the 18th. day of December ,2001, duly
approved and subscribed by the Mayor Pro Tem of said C~ty, and the seal of smd C~ty was thereto
affixed and attested to by the C~ty Secretary,
NOW, THEREFORE, TXU Gas Dlsmbut~on, a dlwslon of TXU Gas Company, hereby m
all respects ACCEPTS, APPROVES AND AGREES TO smd Ordinance, and the same shall
constitute and be a binding contractual obhgat~on of TXU Gas D~stnbuOon, a division of TXU
Gas Company, and of the C~ty, without wmver of any other remedy by TXU Gas Dlsmbutlon, a
thvmon of TXU Gas Company, or the C~ty, and TXU Gas Dlsmbutlon, a &ws~on of TXU Gas
Company does hereby file this, its written acceptance, with the C~ty Secretary of the C~ty of
Denton, Texas, m her office.
DATED th~s the 1 ~*~3'day of f~d},/tt~O,A-O1/ ,200~,
TXf~j GAS 0
DISTRIBUTION, a division of
TXU GAS COMPANY
ATTEST ~ ~
~ 26
TANCFILED xn the Office ofthe~C~ty Secretary of the Cxty of Denton, Texas, th~s the
ay of ~_(--~. 1~ ('A~ ,20~I'
e~f[~' ~lters, C~ty Secretary
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