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18-56 - OTOWN OF PROSPER ORDINANCE NO.18-56 AN ORDINANCE GRANTING TO ONCOR ELECTRIC DELIVERY COMPANY LLC, ITS SUCCESSORS AND ASSIGNS, AN ELECTRIC POWER FRANCHISE TO USE THE PRESENT AND FUTURE STREETS, ALLEYS, HIGHWAYS, PUBLIC UTILITY EASEMENTS, PUBLIC WAYS AND PUBLIC PROPERTY OF THE TOWN OF PROSPER, TEXAS, PROVIDING FOR COMPENSATION THEREFOR, PROVIDING FOR AN EFFECTIVE DATE AND A TERM OF SAID FRANCHISE, PROVIDING FOR WRITTEN ACCEPTANCE OF THIS FRANCHISE, PROVIDING FOR THE REPEAL OF ALL EXISTING FRANCHISE ORDINANCES TO ONCOR ELECTRIC DELIVERY COMPANY LLC, ITS PREDECESSORS AND ASSIGNS, AND FINDING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC. BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF PROSPER, TEXAS: SFr:T1nNl 1_ GRANT OF AUTHORITY: That there is hereby granted to Oncor Electric Delivery Company LLC, its successors and assigns (herein called "Company"), the right, privilege and franchise to construct, extend, maintain and operate in, along, under and across the present and future streets, alleys, highways, public utility easements, public ways and other public property (Public Rights -of -Way) of the Town of Prosper, Texas (herein called "Town") electric power lines, with all necessary or desirable appurtenances (including underground conduits, poles, towers, wires, transmission lines, telephone and communication lines, and other structures for Company's own use), (herein called "Facilities") for the purpose of delivering electricity to the Town, the inhabitants thereof, and persons, firms and corporations beyond the corporate limits thereof, for the term set out in Section 7. SFrTinm 2 Poles, towers and other structures shall be so erected as not to unreasonably interfere with traffic over streets, alleys and highways. The Company will use reasonable efforts to work with the Town to avoid installing its facilities in park or Town property other than utility easements or street, alley, or highway Right -of -Way. SECTION 3. The Town reserves the right to lay, and permit to be laid, storm, sewer, gas, water, wastewater and other pipe lines, cables, and conduits, or other improvements and to do and permit to be done any underground or overhead work that may be necessary or proper in, across, along, over, or under Public Rights -of -Way occupied by Company. The Town also reserves the right to change in any manner any curb, sidewalk, highway, alley, public way, street, utility lines, Oncor Electric Delivery Company LLCFrown of Prosper Electric Franchise Page 1 storm sewers, drainage basins, drainage ditches, and the like. Town shall provide Company with at least thirty (30) days' notice when requesting Company to relocate facilities and shall specify a new location for such facilities along the Public Rights -of -Way. Company shall, except in cases of emergency conditions or work incidental in nature, obtain a permit, if required by Town ordinance, prior to performing work in the Public Rights -of -Way, except in no instance shall Company be required to pay fees or bonds related to its use of the Public Rights -of -Way, despite the Town's enactment of any ordinance providing the contrary. Company shall construct its facilities in conformance with the applicable provisions of the National Electrical Safety Code. Town -requested relocations of Company facilities in the Public Rights -of -Way shall be at the Company's expense; provided however, if the Town is the end use Retail Customer (customer who purchases electric power or energy and ultimately consumes it) requesting the removal or relocation of Company Facilities for its own benefit, or the project requiring the relocation is solely aesthetic/beautification in nature, it will be at the total expense of the Town. Provided further, if the relocation request includes, or is for, the Company to relocate above -ground facilities to an underground location, Town shall be fully responsible for the additional cost of placing the facilities underground. If any other corporation or person (other than Town) requests Company to relocate Company facilities located in Town Rights -of -Ways, the Company shall not be bound to make such changes until such other corporation or person shall have undertaken, with good and sufficient bond, to reimburse the Company for any costs, loss, or expense which will be caused by, or arises out of such change, alteration, or relocation of Company's Facilities. Town may not request the Company to pay for any relocation which has already been requested, and paid for, by any entity other than Town. If Town abandons any Public Rights -of -Way in which Company has facilities, such abandonment shall be conditioned on Company's right to maintain its use of the former Public Rights -of -Way and on the obligation of the party to whom the Public Rights -of -Way is abandoned to reimburse Company for all removal or relocation expenses if Company agrees to the removal or relocation of its facilities following abandonment of the Public Rights -of -Way. If the party to whom the Public Rights -of -Way is abandoned requests the Company to remove or relocate its facilities and Company agrees to such removal or relocation, such removal or relocation shall be done within a reasonable time at the expense of the party requesting the removal or relocation. If relocation Oncor Electric Delivery Company LLC/Town of Prosper Electric Franchise Page 2 cannot practically be made to another Public Rights -of -Way, the expense of any right-of-way acquisition shall be considered a relocation expense to be reimbursed by the party requesting the relocation. SECTION 4. A. In consideration of the granting of this Franchise, Company shall, at its sole cost and expense, indemnify and hold the Town, and its past and present officers, agents and employees harmless against any and all liability arising from suits, actions or claims regarding injury or death to any person or persons, or damages to any property arising out of or occasioned by the intentional and/or negligent acts or omissions of Company or any of its officers, agents, or employees in connection with Company's construction, maintenance and operation of Company's system in the Town Public Rights -of -Way, including any court costs, reasonable expenses and reasonable defenses thereof. B. This indemnity shall only apply to the extent that the loss, damage or injury is attributable to the negligence or wrongful act or omission of the Company or its officers, agents or employees, and does not apply to the extent such loss, damage or injury is attributable to the negligence or wrongful act or omission of the Town or the Town's officers, agents, or employees or any other person or entity. This provision is not intended to create a cause of action or liability for the benefit of third parties but is solely for the benefit of Company and the Town. C. In the event of joint and concurrent negligence or fault of both Company and the Town, responsibility and indemnity, if any, shall be apportioned comparatively between the Town and Company in accordance with the laws of the state of Texas without, however, waiving any governmental immunity available to the Town under Texas law and without waiving any of the defenses of the parties under Texas law. Further, in the event of joint and concurrent negligence or fault of both Company and the Town, responsibility for all costs of defense shall be apportioned between the Town and Company based upon the comparative fault of each. D. In fulfilling its obligation to defend and indemnify Town, Company shall have the right to select defense counsel, subject to Town's approval, which will not be unreasonably withheld. Company shall retain defense counsel within seven (7) business days of Town's written notice that Town is invoking its right to indemnification under this franchise. If Company fails to retain counsel within such time period, Town shall have the right to retain defense counsel on its own behalf, and Company shall be liable for all reasonable defense costs incurred by Town, except as otherwise provided in section 4.13 and 4.C. Oncor Electric Delivery Company LLC/Town of Prosper Electric Franchise Page 3 SFrTI()N A This franchise is not exclusive, and nothing herein contained shall be construed so as to prevent the Town from granting other like or similar rights, privileges and franchises to any other person, firm, or corporation. Any Franchise granted by the Town to any other person, firm, or corporation shall not unreasonably interfere with this Franchise. SECTION 6. In consideration of the grant of said right, privilege and franchise by the Town and as full payment for the right, privilege and franchise of using and occupying the said Public Rights -of - Way, and in lieu of any and all occupation taxes, assessments, municipal charges, fees, easement taxes, franchise taxes, license, permit and inspection fees or charges, street taxes, bonds, street or alley rentals, and all other taxes, charges, levies, fees and rentals of whatsoever kind and character which the Town may impose or hereafter be authorized or empowered to levy and collect, excepting only the usual general or special ad valorem taxes which the Town is authorized to levy and impose upon real and personal property, sales and use taxes, and special assessments for public improvements, Company shall pay to the Town the following: A. A final annual payment was made on or before June 5, 2018 for the basis period of April 1, 2017 through March 31, 2018 and the privilege period of June 1, 2017 through May 31, 2018 in accordance with the provisions in the previous franchise. B. As authorized by Section 33.008(b) of PURA, the original franchise fee factor calculated for the Town in 2002 was 0.003310 (the "Base Factor"), multiplied by each kilowatt hour of electricity delivered by Company to each retail customer whose consuming facility's point of delivery is located within the Town's municipal boundaries for determining franchise payments going forward. Due to a 2006 agreement between Company and Town the franchise fee factor was increased to a franchise fee factor of 0.003476 (the "Current Factor"), multiplied by each kilowatt hour of electricity delivered by Company to each retail customer whose consuming facility's point of delivery is located within the Town's municipal boundaries on an quarterly basis. Oncor Electric Delivery Company LLC/Town of Prosper Electric Franchise Page 4 However, consistent with the 2006 agreement, should the Public Utility Commission of Texas at any time disallow Company's recovery through rates of the higher franchise payments made under the Current Factor as compared to the Base Factor, then the franchise fee factor shall immediately revert to the Base Factor of 0.003310 and all future payments, irrespective of the time period that is covered by the payment, will be made using the Base Factor. Company shall make quarterly payments as follows. Pavment Due date September 5 December 5 March 5 June 5 Basis Period Apr. 1 - Jun. 30 Jul.1 - Sept. 30 Oct. 1 - Dec. 31 Jan. 1 - Mar. 31 Privilege Period (Following Year) Jun. 1 -Aug. 31 Sept.1 - Nov. 30 Dec. 1 — Feb. 28(29) Mar. 1 - May. 31 1. The first payment hereunder shall be due and payable on or before September 5, 2018 and will cover the basis period of April 1, 2018 through June 30, 2018 and the privilege period of June 1, 2018 through August 31, 2018. If this franchise is not effective prior to the first quarterly payment date, Company will pay any payments due within 30 days of the effective date of this agreement. The final payment under this franchise is due on or before June 5, 2037 and covers the basis period of January 1, 2037 through March 31, 2037 and the privilege period of March 1, 2037 through May 31, 2037; and 2. After the final payment date of June 5, 2037, Company may continue to make additional quarterly payments in accordance with the above schedule. Town acknowledges that such continued payments will correspond to privilege periods that extend beyond the term of this Franchise and that such continued payments will be recognized in any subsequent franchise as full payment for the relevant quarterly periods. C. A sum equal to four percent (4%) of gross revenues received by Company from services identified as DD1 through DD24 in Section 6.1.2 "Discretionary Service Charges," in Oncor's Tariff for Retail Delivery Service (Tariff), effective 1/1/2002, that are for the account and benefit of an end-use retail electric consumer. Company will, upon request by Town, provide a cross reference to Discretionary Service Charge numbering changes Oncor Electric Delivery Company LLC/Town of Prosper Electric Franchise Page 5 that are contained in Company's current approved Tariff. 1. 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. 2. 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 "Discretionary Service Charges", as set out in Section 6C, received during the preceding calendar year. The initial Discretionary Service Charge franchise fee amount will be paid on or before April, 30 2019 and will be based on the calendar year January 1 through December 31, 2018. The final Discretionary Service Charge franchise fee amount will be paid on or before April 30, 2038 and will be based on the calendar months of January 1, 2037 through May 31, 2037. 3. Company may file a tariff or tariff amendment(s) to provide for the recovery of the franchise fee on Discretionary Service Charges. 4. Town agrees (i) to the extent the Town 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 Town 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 Town will take an affirmative position supporting the 100% recovery of such franchise fees by Company and; (iii) in the event of an appeal of any such regulatory proceeding in which the Town has intervened, the Town will take an affirmative position in any such appeals in support of the 100% recovery of such franchise fees by Company. 5. Town agrees that it will take no action, nor cause any other person or entity to take any action, to prohibit the recovery of such franchise fees by Company. 6. In the event of a regulatory disallowance of the recovery of the franchise fees on the Discretionary Service Charges, Company will not be required to continue payment of such franchise fees. SECTION 7. This Ordinance shall become effective upon Company's written acceptance hereof by Town, said written acceptance to be filed by Company with the Town within sixty (60) days after final passage and approval hereof. The right, privilege and franchise granted hereby shall expire Oncor Electric Delivery Company LLC/Town of Prosper Electric Franchise Page 6 on May 31, 2037; provided that, unless written notice of cancelation is given by either party hereto to the other not less than sixty (60) days before the expiration of this franchise agreement, it shall be automatically renewed for an additional period of six (6) months from such expiration date and shall be automatically renewed thereafter for like periods until canceled by written notice given not less than sixty (60) days before the expiration of any such renewal period. SECTION 8_ This Ordinance shall supersede any and all other franchises granted by the Town to Company, its predecessors and assigns. SECTION 9. The sections, paragraphs, sentences, clauses and phrases of this Ordinance are severable. If any portion of this Ordinance is declared illegal or unconstitutional by the valid final non -appealable judgment or decree of any court of competent jurisdiction, such illegality or unconstitutionality shall not affect the legality and enforceability of any of the remaining portions of this Ordinance. SECTION 10. In order to accept this franchise, Company must file with the Town Secretary its written acceptance of this franchise ordinance within sixty (60) days after its final passage and approval by Town. SECTION 11. It is hereby officially found that the meeting at which this Ordinance is passed is open to the public and that due notice of this meeting was posted by Town, all as required by law. DULY PASSED AND APPROVED at a regular meeting of the Town Council of Prosper, Texas, on this the 10th day of July, 2018. C Ray Smith, 7 ayor Oncor Electric Delivery Company LLC/Town of Prosper Electric Franchise Page 7 APPROVED AS TO FORM AND LEGALITY: (22 Terrence S. Welch, Town Attorney Oncor Electric Delivery Company LLC/Town of Prosper Electric Franchise Page 8