Ordinance No. 13,795ORDINANCE NO. 13,795
AN ORDINANCE GRANTING TO CENTERPOINT ENERGY RESOURCES
CORP., DBA CENTERPOINT ENERGY TEXAS GAS OPERATIONS, THE
RIGHT, PRIVILEGE AND FRANCHISE TO CONSTRUCT, INSTALL,
EXTEND, REMOVE, REPLACE, ABANDON, OPERATE AND MAINTAIN
ITS FACILITIES WITHIN THE PUBLIC RIGHTS-OF-WAY OF THE CITY
OF BAYTOWN, TEXAS, FOR THE TRANSPORTATION, DELIVERY, SALE
AND DISTRIBUTION OF NATURAL GAS; CONTAINING OTHER
PROVISIONS RELATING TO THE FOREGOING SUBJECT; PROVIDING
FOR SEVERABILITY AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City Council of the City of Baytown, Texas, currently has a franchise
agreement with CenterPoint Energy Resources Corp., dba CenterPoint Energy Texas Gas
Operations ("Company") that expired on December 22, 2017; and
WHEREAS, such franchise agreement was extended on November 20, 2017, for an
additional six (6) months ending on June 30, 2018; and
WHEREAS, the City Council of the City of Baytown, Texas, finds it is in the best
interest of the City of Baytown (the "City") to enter into a new franchise agreement with
Company to furnish and supply natural gas to the general public in the City of Baytown; NOW
THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: Grant of Authority. Subject to the terms, conditions and provisions of this
ordinance, the right, privilege and franchise is hereby granted to CenterPoint Energy Resources
Corp., dba CenterPoint Energy Texas Gas Operations, hereinafter called "Company", to
construct, install, extend, remove, replace, abandon, operate and maintain its facilities within the
Public Rights -of -Way of the City of Baytown, Texas, for the transportation, delivery, sale and
distribution of natural gas within the corporate limits of the City of Baytown, as the same are
now and as the same may from time to time be extended. The right, privilege and franchise
granted hereunder is granted subject to the existing City of Baytown Charter and Ordinances.
Section 2: Definitions. The following words, terms and phrases, when used in this
ordinance, shall have the meanings ascribed to them in this section, except where the context
clearly indicates a different meaning:
A. "City" shall mean the City of Baytown, Texas, a home -rule municipal corporation.
B. "Company" shall mean CenterPoint Energy Resources Corp., dba CenterPoint Energy
Texas Gas Operations, a Delaware Corporation, and shall not mean any of its affiliates
and subsidiaries who shall have no right, privilege or franchise granted hereunder.
C. "Facilities" shall mean pipes, pipelines, natural gas mains, laterals, feeders, regulators,
meters, fixtures, connections and attachments and other instrumentalities and
appurtenances, used in or incident to providing transportation, distribution, supply and
sales of natural gas for heating, lighting, power and any other purposes for which natural
gas may now or hereafter be used.
D. "Public Rights -of -Way" shall mean the areas in, under, upon, over, across, and along any
and all of the present and future Streets or streams now or hereafter owned or controlled
by City.
E. "Street" shall mean the surface and the space above and below any public street, road,
highway, alley, bridge, sidewalk, or other public place or way.
Section 3: Term of Franchise. This Franchise shall become effective after the filing
with the City by the Company of the acceptance required herein and following the expiration of
sixty (60) days after final passage by the City Council and shall remain in full force and effect
through October 1, 2028, unless terminated in accordance with the terms hereof.
Section 4: Construction and Maintenance of Natural Gas Distribution System. All
Facilities installed by Company shall be of sound material and good quality, and shall be laid so
that they will not interfere with the artificial drainage of the City or its underground fixtures, or
with navigation in or the natural drainage of any stream. All Facilities shall be installed in
accordance with Section 23 and applicable federal and state, regulations and, in the absence of
such regulations, in accordance with accepted industry practice. Within the Public Rights -of -
Way, the location and route of the Facilities by the Company shall be subject to the reasonable
and proper regulation, direction and control of the City or the City official to whom such duties
have been delegated. Such regulation shall include, but not be limited to, the right to require in
writing to the extent provided in Section 14 the relocation of Company's Facilities at Company's
cost within the Public Rights -of -Way whenever such relocation shall be reasonably necessary to
accommodate public works improvement projects within the Public Rights -of -Way that are
being made by or for the benefit of the City, provided such benefit is evidenced by an executed
agreement by the City and the entity responsible for the project. Upon request of the City, the
Company shall make available at no cost to the City during working hours maps showing the
location of Company's Facilities within the corporate limits of the City.
Section 5: Streets to be Restored to Good Condition. The Company and its
contractors shall give the City reasonable notice of the dates, location and nature of all work to
be performed on its Facilities within the Public Rights -of -Way. Following completion of work
in the Public Rights -of -Way, Company shall repair the affected Public Rights -of -Way as soon as
possible, but in all cases, Company shall comply with all City ordinances governing time periods
and standards relating to excavating in the Public Rights -of -Way. No street, alley, highway or
public place shall be encumbered for a longer period than shall be necessary to execute the work.
Section 6: Permits. Company and its contractors shall obtain a permit in accordance
with Article IV, Chapter 21 of the Code of Ordinances, Baytown, Texas, as it currently exists or
as hereinafter amended. Company shall be exempt from any existing or future professional
engineering stamp or certification requirement of the City as well as any plan and/or profile
view requirement of any Facilities in the Right -of -Way in order to perform work. Company
expressly agrees that, irrespective of whether it provides a Professional Engineering stamp or a
plan, and/or a profile view, the City may rely on the information Company provides regarding
its own Facilities in its permit application and Company shall hold the City harmless and
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indemnify the City in accordance with Section 13 of this Agreement. All work shall be
preceded by an 811 call and be subject to the Texas One -Call Statute (Texas Utilities Code,
Chapter 251, and any successor statutes). Company shall give the City telephone notice of the
initiation of emergency repairs involving breaks in the paved surface of the Public Rights -of -
Way, including sidewalks and curbs, as soon as practicable under the circumstances and shall
submit a permit promptly following completion of the work. Company and contractors
performing work for the Company shall not be required to obtain any permits for relocations of
Facilities requested by the City, provided that the relocated Facilities are placed in the location
designated by the City and relocation is otherwise in accordance with the City's request to
relocate. This Franchise shall constitute a permit to park vehicles in the Streets and other Public
Rights -of -Way when necessary for the installation, replacement, abandonment, operation or
maintenance of Company's Facilities; provided that such parking does not impair or impede
traffic and Company pays for all damages to the Public Rights -of -Way. Company and
contractors performing work for Company shall not be required to pay any fee in addition to the
franchise fee in order to obtain a permit to perform work on Company's Facilities, or park
within the Streets and other Public Rights -of -Way.
Section 7: Quality of Service. The service furnished hereunder to the City and its
inhabitants shall be in accordance with the quality of service rules of the Railroad Commission
of Texas, state and federal regulations. Company shall furnish the grade of service to its
customers as provided by its rate schedules and shall maintain its system in reasonable operating
condition during the continuance of this Franchise. An exception to this requirement is
automatically in effect, but only for so long as is necessary, when caused by a shortage in
materials, supplies and equipment beyond the control of the Company as a result of fires, strikes,
riots, storms, floods and other casualties, governmental regulations, limitations and restrictions
as to the use and availability of materials, supplies and equipment and as to the use of the
services, and unforeseeable and unusual demands for service. In any of such events, the
Company shall do all things reasonably within its power to restore normal service as quickly as
practicable.
Section 8: Payment to the City. In consideration of the rights and privileges herein
granted, the administration of the Franchise by the City, the temporary interference with the use
of Public Rights -of -Way and cost and obligations undertaken by the City in relation thereto and
in lieu of any license, charge, fee, Street or alley rental or other character of charge for use and
occupancy of the Streets, alleys, and public places of the City, and in lieu of any inspection fee,
the Company agrees to pay to the City franchise fees in the amount and manner described herein.
Company agrees to pay to the City quarterly during the continuance of this Franchise a
sum of money equal to four (4%) of the Company's gross receipts for the preceding calendar
quarter received by the Company from the sale of gas within the corporate limits of the City plus
seven cents (7¢) per Mcf for natural gas transported by Company for its Transport Customers
during such quarter. "Transport Customer" means any person or entity for whom Company
transports gas through the distribution system of Company within the corporate limits of City for
consumption within the corporate limits of City. The franchise fees hereunder shall be
calculated for the calendar quarters ending March 31, June 30, September 30, and December 31
and shall be payable on or before the fifteenth day of May, August, November, and February
following the quarter for which payment is made, beginning with the first such date following
the Effective Date of this Franchise and each August 15th, November 15th, February 15th, and
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May 15th thereafter; provided, however, the first such payment shall be prorated as necessary to
reflect only those gross receipts received and transportation volumes delivered by Company after
the Effective Date of this Franchise. In no event shall the Company be required to remit to the
City franchise fee amounts that for any reason whatsoever are not fully recoverable from its
customers. Upon receipt of the above amount of money, the City shall deliver to the Company a
receipt for such amount. If any payment due date required herein falls on a weekend or bank
holiday, payment shall be made on or before the close of business of the first working day after
the payment due date.
Section 9: Annexations by City. This Franchise shall extend to and include any and
all territory that is annexed by the City during the term of this Franchise. Within sixty (60) days
from the receipt of notice from the City of any such annexation, the Company shall assure that
any and all customers within such annexed territory are included and shown on its accounting
system as being within the corporate limits of the City of Baytown. After such sixty (60) day
period, the payment provisions specified in Section 8 of this Franchise shall apply to gross
receipts and transport fees received by the Company from customers located within such
annexed territory. Company shall true -up its map of City boundaries to the City's map on an
annual basis.
Section 10: Non -Exclusive Franchise. Nothing contained in this Franchise shall ever
be construed as conferring upon the Company any exclusive rights or privileges of any nature
whatsoever.
Section 11: Compliance and Remedies.
(a) In the event the Company by act or omission violates any material term, condition or
provision of this Franchise, the City shall notify the Company in writing of such violation.
Should the Company fail or refuse to correct any such violation within thirty (30) days from the
date of City's notice, the City shall, upon written notification to the Company, have the right to
terminate this agreement. Any such termination and cancellation shall be by ordinance adopted
by City Council; provided, however, before any such ordinance is adopted, the Company must
be given at least sixty (60) days' advance written notice. Such notice shall set forth the causes
and reasons for the proposed termination and cancellation, shall advise the Company that it will
be provided an opportunity to be heard by City Council regarding such proposed action before
any such action is taken and shall set forth the time, date and place of the hearing.
(b) Other than its failure, refusal or inability to pay its debts and obligations, including,
specifically, the payments to the City required by this Franchise, the Company shall not be
declared in default or be subject to any sanction under any provision of this Franchise in those
cases in which performance of such provision is prevented by reasons beyond its control.
(c) The rights and remedies of City and Company set forth herein shall be in addition to,
and not in limitation of, any other rights and remedies provided at law or in equity; and City's
exercise of any particular remedy shall not constitute a waiver of its rights to exercise any other
remedy.
Section 12: Reserve of Powers. The City by the granting of this Franchise does not
surrender or to any extent lose, waive, impair or lessen the lawful powers, claims and rights, now
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or hereafter vested in the City under the Constitution and statutes of the State of Texas and under
the Charter and Ordinances of the City of Baytown or other applicable law, to regulate public
utilities within the City, to regulate rates of public utilities within the City, and to regulate the use
of the Public Rights -of -Way by the Company; and the Company, by its acceptance of this
Franchise, agrees that all lawful powers and rights, whether regulatory or otherwise, as are or as
may be from time to time vested in or reserved to the City, shall be in full force and effect and
subject to the exercise thereof by the City at any time and from time to time.
SECTION 13: INDEMNITY. THE COMPANY, ITS SUCCESSORS
AND ASSIGNS, SHALL PROTECT AND HOLD THE CITY AND ITS
OFFICERS, AGENTS, AND EMPLOYEES (COLLECTIVELY REFERRED
TO IN THIS SECTION AS "THE CITY") HARMLESS AGAINST ANY
AND ALL CLAIMS OR DEMANDS FOR DAMAGES TO ANY PERSON
OR PROPERTY BY REASON OF THE CONSTRUCTION AND
MAINTENANCE OF THE COMPANY'S NATURAL GAS DISTRIBUTION
SYSTEM, OR IN ANY WAY GROWING OUT OF THE RIGHTS
GRANTED BY THIS FRANCHISE, EITHER DIRECTLY OR
INDIRECTLY, OR BY REASON OF ANY ACT, NEGLIGENCE OR
NONFEASANCE OF THE COMPANY OR THE CONTRACTORS,
AGENTS OR EMPLOYEES OF THE COMPANY OR ITS SUCCESSORS
AND ASSIGNS, AND SHALL REFUND TO THE CITY ALL SUMS
WHICH THE CITY MAY BE ADJUDGED TO PAY ON ANY SUCH
CLAIM, OR WHICH MAY ARISE OR GROW OUT OF THE EXERCISE
OF THE RIGHTS AND PRIVILEGES HEREBY GRANTED OR BY THE
ABUSE THEREOF, AND THE COMPANY OR ITS SUCCESSORS AND
ASSIGNS SHALL INDEMNIFY, DEFEND, AND HOLD THE CITY
HARMLESS FROM AND ON ACCOUNT OF ALL DAMAGES, COSTS,
EXPENSES, ACTIONS, AND CAUSES OF ACTION THAT MAY ACCRUE
TO OR BE BROUGHT BY, A PERSON, PERSONS, COMPANY OR
COMPANIES AT ANY TIME HEREAFTER BY REASON OF THE
EXERCISE OF THE RIGHTS AND PRIVILEGES HEREBY GRANTED,
OR OF THE ABUSE THEREOF.
Section 14: Relocation of Facilities. The Company shall, upon written request of the
City, relocate its Facilities within Public Rights -of -Way at Company's own expense, exclusive of
Facilities installed for service directly to City, to accommodate public works or improvement
projects that are being made by or for the benefit of the City, provided such benefit is evidenced
by an executed agreement by the City and the entity responsible for the project. Public works or
improvement projects may include, but are not limited to, street widening, changes of grade,
water, sewer, or drainage upgrades, construction or reconstruction projects and relocation of
traffic lanes. City shall bear the costs of all relocations of Facilities requested by the City for
reasons other than the aforementioned public works improvement projects.
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Section 15: Governmental Function. All of the regulations and activities required by
this Franchise are hereby declared to be governmental and for the health, safety and welfare of
the general public.
Section 16: Records and Reports.
(a) Books of Account. The Company shall keep complete and accurate books of
accounts and records of its business and operations under and in connection with this Franchise.
All such books of accounts and records shall be kept at the Company's principal office in
Houston, Texas.
(b) Access by Ci . The City may conduct an audit or other inquiry or may pursue a
cause of action in relation to the payment of the franchise fee only if such audit, inquiry, or
pursuit of a cause of action concerns a payment made less than three (3) years before the
commencement of such audit, inquiry, or pursuit of a cause of action. Each party shall bear its
own costs of any such audit or inquiry. Upon receipt of a written request from the City, all
books and records related to Company's operations under this Franchise shall be made available
for inspection and copying no later than thirty (30) days from receipt of such request.
(c) Interest on Underpayments and Overpayments.
(1) Amounts due to City for late payments shall include interest, compounded
daily equal to the return on equity plus three percent (3%) granted to the Company in its
most recent proceeding fixing rates applicable to customers within the corporate limits of
the City.
(2) If the City identifies, as a result of a franchise fee compliance review, amounts
owed by the Company from prior periods or prior underpayments, then the Company
shall pay simple interest on such amounts equal to the return on equity granted to the
Company in its most recent proceeding fixing rates applicable to customers within the
corporate limits of the City. Said interest shall be payable on such sums from the date the
initial payment was due until it is paid and shall not be billed to customers.
(3) Amounts due Company for past overpayments shall include simple interest
equal to the return on equity granted to the Company in its most recent proceeding fixing
rates applicable to customers within the corporate limits of the City; provided, however,
if there is a change in the approved return on equity during the time period subject to the
City's audit or inquiry, then for each time period during which there was an overpayment,
the approved return on equity in effect during such time period shall be used in
calculating interest under this subparagraph (c). Interest payable on such sums shall be
credited to customers.
Section 17: Easement. In consideration for the compensation set forth in Section 8,
City agrees that if City sells, conveys, or surrenders possession of any portion of the Public
Right -of -Way that is being used by Company pursuant to this Franchise, City, to the maximum
extent of its right to do so, shall first grant Company an easement for such use and the sale,
conveyance, or surrender of possession of the Public Right -of -Way shall be subject to the right
and continued use of Company.
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Section 18: Acceptance. The Company shall, within thirty (30) days following the final
passage and approval of this Franchise, file with the City Clerk of the City of Baytown a written
statement signed in its name and behalf in the following form:
"To the Honorable Mayor: and City Council of the City of Baytown:
CenterPoint Energy Resources Corp., dba CenterPoint Energy Texas Gas Operations, its
successors and assigns, hereby accepts the attached Franchise Ordinance and agrees to be
bound by all of its terms and provisions."
CENTERPOINT ENERGY RESOURCES CORP.,
DBA CENTERPOINT ENERGY TEXAS GAS
OPERATIONS
LIM
Randal M. Pryor, Division Vice President,
Regional Operations
Dated this day of 2018.
Section 19: Severability. If any provision, section, subsection, sentence, clause or
phrase of this Franchise is for any reason held to be unconstitutional, void, or invalid or for any
reason unenforceable, the validity of the remaining portions of this Franchise shall not be
affected thereby, it being the intent the City of Baytown in adopting this Franchise that no
portion hereof or provision hereof shall become inoperative or fail by reason of any
unconstitutionality or invalidity of any other portion, provision or regulation and, to this end, all
provisions of this ordinance are declared to be severable.
Section 20: Notices. Every notice, order, petition, document, or other direction or
communication to be served upon the City or the Company shall be deemed sufficiently given if
sent by registered or certified mail, return receipt requested. Every such communication to the
Company shall be sent to:
CenterPoint Energy Resources Corp.
Vice President Regulatory Relations
PO Box 4567
Houston, TX 77210-4567
With a copy to:
General Counsel, Gas Division
PO Box 2628
Houston, TX 77252-2628
Every such communication to the City or the City Council shall be sent to the:
City of Baytown
Attn: City Manager
P.O. Box 424
Baytown, TX 77522-0424
With a Copy to:
City of Baytown
Attn: City Attorney
P.O. Box 424
Baytown, TX 77522-0424
Section 21: Publication, Passage and Effective Date. This Franchise, having been
published in accordance with Section 117 of the City's Charter, shall take effect and be in force
from and after the first day of the month following sixty (60) days after this ordinance's final
passage; provided that within such sixty- (60) day period the City receives the Company's
acceptance filed pursuant to Section 18 ("Effective Date"). The Company shall pay the cost of
those publications.
Section 22: Repeal of Previous Ordinances. This ordinance extends the previous
Franchise Agreement with the Company, dated December 22, 1977, granted by City of Baytown,
Texas, via Ordinance No. 2359, and extended via Ordinance No. 13,641 (collectively the
"Previous Franchise Agreement") upon its first reading from July 1, 2018, until the Effective
Date. On and after the Effective Date, this Franchise replaces the Previous Franchise agreement
with the Company, which Previous Franchise Agreement shall be hereby repealed as of the
Effective Date of this Franchise.
Section 23: Compliance with Charter and Ordinances. This Franchise, the rights
granted hereby and the operations and activities performed by Company pursuant hereto shall be
subject to applicable provisions of the Charter of the City of Baytown, Texas. The Franchise and
rights granted hereby and the operations and activities performed by Company pursuant hereto,
shall be subject to all valid ordinances and regulations of the City insofar as such ordinances and
regulation (a) do not shorten the term hereof or terminate, abrogate, or materially and adversely
affect the Franchise and right granted to Company hereby, (b) do not conflict with or are not
inconsistent with the terms and provisions contained in this ordinance, (c) or prevent or interfere
with Company's Federal and State regulatory obligations. All such conflicting or inconsistent
ordinances are hereby repealed to the extent of such conflict or inconsistency.
[Remainder of page intentionally left blank.]
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INTRODUCED, READ, and PASSED by the affirmativeto of the City Council of the
City of Baytown on the FIRST READING, this the 28th day of J e, 2018.
.DONCARLOS,
ATTEST: '
LETICIA BRYSCH, City tArk
-
APPROVED AS TO FORM:
L
NACIO RAMIREZ , City Attorney
INTRODUCED, READ, and PASSED by the affirmative vo of the City Council of the
City of Baytown on the SECOND READING, this the 12th day o y, 2018.
INTRODUCED, READ, and PASSED by the affirmativyvote of the City Council of the
City of Baytown on the THIRD AND FINAL READING, thi a 26th day of July, 2018.
S DONCARLOA Mayor
ST N H"DONCARLC
ATTEST:
e
6A
LETICIA BRYSCH City Clerk
'
tl A'
APPROVED AS TO FORM:
ACIO RAMIREZ, S ., ity Attorney
INTRODUCED, READ, and PASSED by the affirmativyvote of the City Council of the
City of Baytown on the THIRD AND FINAL READING, thi a 26th day of July, 2018.
S DONCARLOA Mayor
ATTEST:
LETICIA BRYSCH, City Cle
APPROVED AS TO FORM:
f
IE&ACIO RAMIREZ, SR , ty Attorney
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