Article XIII KANSAS GAS SERVICE

Article XIII
KANSAS GAS SERVICE

Sections:

Division 1. In General

Sec. 1. Definitions.

Sec. 2. Grant.

Sec. 3. Term.

Sec. 4. Compensation to the city.

Sec. 5. Payment and charges.

Sec. 6. Use of Right-of-Way.

Sec. 7. Indemnity and hold harmless.

Sec. 8. Right of assignment.

Sec. 9. Termination and forfeiture of franchise.

Sec. 10. Rights and duties of company upon expiration of franchise.

Sec. 11. Acceptance of terms by company.

Sec. 12. Conditions of franchise.

Sec. 13. Invalidity of ordinance.

Sec. 14. Effective date of ordinance.

Sec. 15. Repeal of conflicting ordinances.

Division 2. Transportation, Distribution and Sale of Natural Gas or Other Energy Through Pipelines or Distribution Systems

Sec. 1. Definitions.

Sec. 2. Application of ordinance.

Sec. 3. Franchise required.

Sec. 4. Calculation of fees.

Sec. 5. Adjustment of volumetric rate.

Sec. 6. Reporting and collection provisions.

Sec. 7. Times.

Sec. 8. Violations.

Sec. 9. Penalties.

Sec. 10. Savings clause.

Sec. 11. Effective date of ordinance.

Division 1. In General

Sec. 1. Definitions.

For purposes of this Franchise, the following words and phrases shall have the meanings given herein:

“City as the grantor” shall mean the City of Topeka, Kansas.

“Company as the Grantee” shall mean Kansas Gas Service, a division of ONEOK, Inc.

“Distributed” or “distribution” shall mean all sales, distribution, or transportation to any consumer for use within the City by the Company or by others through the Facilities of the Company in the Right-of-Way.

“Facilities” shall mean natural gas mains, pipes, boxes, reducing and regulating stations, laterals, conduits, and service extension, together with all necessary appurtenances thereto.

“Gross receipts” shall mean any and all compensation and other consideration derived directly or indirectly by the Company from any Distribution of natural gas to a consumer for any use, including domestic, commercial and industrial purposes, and including without limitation interruptible sales and single sales; and shall include revenues from any operation or use of any or all of the Facilities in the Right-of-Way by the Company or others including without limitation, charges as provided in tariffs filed and approved, and shall also include all fees or rentals received by the Company for the lease or use of pipeline capacity within the corporate limits of the City; but such term shall not include revenue from certain miscellaneous charges and accounts, including but not limited to delayed or late payment charges, connection and disconnection fees, reconnection fees, customer project contributions, returned check charges, and temporary service charges.

“MCF” shall mean a measurement of natural gas equal to one thousand (1,000) cubic feet. It is assumed for purposes of this Ordinance that one MCF equals one million (1,000,000) British Thermal Units.

“Public improvement” shall mean any existing or contemplated public facility, building, or capital improvement project, financed by the City, including without limitation, streets, alleys, sidewalks, sewer, water, drainage, Right-of-Way improvement, and Public Projects.

“Public project” shall mean any project planned or undertaken and financed by the City or any governmental entity for construction, reconstruction, maintenance, or repair of public facilities or improvements, or any other purposes of a public nature paid for with public funds.

“Public project for private development” shall mean a Public Project, or that portion thereof, arising solely from a request or requirement of a third (3rd) party primarily for the benefit and use of a third (3rd) party.

“Right-of-Way” shall mean present and future streets, alleys, rights-of-way, and public easements, including easements dedicated to the City in plats of the City for streets and alleys.

“Settlement prices” shall mean the settlement prices for natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX) on the fifteenth (15th) day of each month as published daily in the Wall Street Journal (WSJ) on the following business day (or the next day in which a Settlement Price is published).

“Street Right-of-Way” shall mean the entire width between property lines of land, property, or an interest therein of every way publicly maintained where any part thereof is open to the use of the public for purposes of vehicular traffic, including street, avenue, boulevard, highway, expressway, alley, or any other public way for vehicular travel by whatever name.

“Transport gas” shall mean all natural gas transported by the Company or by others, but not sold by the Company, to any consumer or user within the City through the Facilities of the Company in the Right-of-Way.

“Volumetric rate” shall mean that sum measured in cents per MCF as determined by the City by ordinance or such amount as may be hereafter adjusted according to the provisions of this section. The Volumetric Rate calculation form incorporated herein as Attachment A shall be used for the recalculation of the Volumetric Rate. The recalculation shall be effective each January 1 and shall be based on Settlement Prices for the twelve (12) month period beginning in July of the second (2nd) preceding year and ending in June of the preceding year. For the fifteenth (15th) day of each month during said twelve (12) month period, the Settlement Prices for the next twelve (12) months will be summed and divided by twelve (12) to determine an average Settlement Price. The average Settlement Prices for each of the twelve (12) months shall then be summed and divided by twelve (12) and multiplied by the Volumetric Rate as defined in Ordinance No. 18296 to be effective on the date specified in said Ordinance and to be adjusted as specified in Section 5 of said Ordinance. The Volumetric Rate shall be calculated for the City in accordance with the procedures set out herein and filed with the City Clerk by July 31 of each year. (Ord. 18295 § 1, 7-20-04.)

Sec. 2. Grant.

a. There is hereby granted to Company, the non-exclusive right, privilege, and franchise to construct, maintain, extend, and operate its Facilities in, through, and along the Right-of-Way of the City for the purpose of supplying natural gas to the City and the inhabitants thereof for the full term of this Franchise; subject, however, to the terms and conditions herein set forth. Nothing in this grant shall be construed to franchise or authorize the use of the Company’s Facilities or the Right-of-Way by the Company or others, for any purpose other than the provision of natural gas. The Company may not allow a subsidiary, affiliate, or a third (3rd) party to acquire rights to occupy the Rights-of-Way under this Franchise; provided, that nothing in this section shall prevent Company from allowing the use of its Facilities by others when such use is compensated to the City under the provisions of this Franchise.

b. Company shall not enter into or continue any arrangement by which natural gas owned by any other than Company shall be transported, distributed, or sold through any portion of Company’s Facilities in the Right-of-Way for delivery to any person within the City unless the City is compensated for such use by the Company, transporter, consumer, or some other party in accordance with the provisions of Ordinance No. 18296 and any amendments thereto.

c. By this Franchise, the Company is granted the authority to collect on behalf of the City the compensation to be made to the City by other parties using the Company’s Facilities for Distribution of Transport Gas. The Company agrees to collect such sums for the City and to submit such payments in the manner provided in Section 4. Nothing in this section allowing the transportation of gas owned by others shall relieve the Company from the responsibility of complying with the franchise requirements to maintain its Facilities in the Right-of-Way. (Ord. 18295 § 2, 7-20-04.)

Sec. 3. Term.

a. The term of this Franchise shall be twenty (20) years from the effective date of this Ordinance.

b. Upon written request of either the City or the Company, the franchise may be reviewed after five (5) years from the effective date of this Ordinance and either the City or the Company may propose amendments to any provision of this Franchise by giving sixty (60) days written notice to the other of the amendment(s) desired. The City and the Company shall negotiate in good faith in an effort to agree upon mutually satisfactory amendment(s).

c. Upon written request of either the City or the Company, the franchise shall be reopened and renegotiated at any time upon any of the following events:

1. Change in federal, state, or local law, regulation, or order which materially affects any rights or obligations of either the City or the Company, including but not limited to the scope of the grant to the Company or the compensation to be received by the City; or

2. Change in the structure or operation of the natural gas industry which materially affects any rights or obligations of either the City or the Company, including but not limited to the scope of the grant to the Company or the compensation to be received by the City; or

3. Any other material and unintended change or shift in the economic benefit to the City or a change the Company did not anticipate upon accepting the grant of this Franchise.

d. The compensation provision of this Franchise shall be reopened and renegotiated if energy consumers within the City have access to alternative natural gas suppliers or other suppliers of energy which use the Right-of-Way and/or easements granted on publicly owned property and do not pay a franchise fee or other payment substantially equivalent to this Franchise, which results in a material and unfair disadvantage to the Company. The use of the Right-of-Way provision of this Franchise shall be reopened and renegotiated if energy consumers within the City have access to alternative natural gas suppliers or other suppliers of energy which use the Right-of-Way and do not have requirements on the use of the Right-of-Way substantially equivalent to the requirements of this Franchise, which results in a material and unfair disadvantage to the Company. Upon any such event, the City shall have up to one hundred twenty (120) days after receiving written request from the Company in which to restore competitive neutrality, provided that any adjustment in compensation resulting from renegotiations under this Subsection (d) shall be effective no later than one hundred twenty (120) days after such notice.

e. Failure of the City and Company to successfully renegotiate the materially affected provisions of the franchise under subsection (c) or (d) shall give rise to dispute resolution as follows: At the expiration of one hundred twenty (120) days from the date of the written request (or sooner if requested by both the City and the Company) the City or the Company may then file suit either in the District Court of Shawnee County, Kansas, or in some other court of competent jurisdiction, and pursue all remedies available at law or in equity.

f. Amendments under this section, if any, shall be made by ordinance as prescribed by statute. The franchise shall remain in effect according to its terms pending completion of any review or renegotiation pursuant to subsections (b), (c), (d), or (e). (Ord. 18295 § 3, 7-20-04.)

Sec. 4. Compensation to the city.

In consideration of and as compensation for the franchise hereby granted to the Company by the City, the Company shall make an accounting to the City of all natural gas that has been Distributed on a monthly basis. The Company shall pay the City:

a. A sum equal to five percent (5%) of the Gross Receipts received from the Distribution of natural gas; and

b. A sum equal to the Volumetric Rate multiplied by the number of MCF of Transport Gas.

The sums in (a) and (b) above shall be adjusted for uncollectible receivables and for uncollectible receivables which are later collected.

Payments under (a) above shall be effective on the first cycle of the monthly billing cycle which begins no later than sixty (60) days after final passage and approval by the City and acceptance by the Company. Prior to that date, payments shall continue to be calculated and be paid in the manner previously provided in Ordinance 15667. Such payments shall be made to the City under procedures, which are mutually agreed to by the Company and the City within thirty (30) days of the last day of the month to which such accounting shall apply. Payments under (b) above shall be effective on the first cycle of the monthly billing cycle which begins no later than sixty (60) days after final passage and approval by the City and acceptance by the Company of this Ordinance and final passage and approval of Ordinance No. 18296.

In the event the accounting rendered to the City by the Company is found to be incorrect, then payment shall be made on the corrected amount, it being agreed that the City may accept any amount offered by the Company, but the acceptance thereof by the City shall not be deemed a settlement of such item if the amount is in dispute or later found to be incorrect. The Company agrees that all of its books, records, and documents and all of its contracts and agreements as may be reasonably necessary for an effective compliance review of this Ordinance shall at all reasonable times be opened to the inspection and examination of the officers of the City and its duly authorized agents, auditor, and employees for the purpose of verifying said accounting, or for any other lawful purpose. Notwithstanding the obligation herein, the Company shall have the right to request the reasonable protection of proprietary information of the Company so long as such request does not unreasonably frustrate the purposes of this subsection. The Company shall have no obligations, however, to make payment for Transport Gas for which the Company has not been paid. The Company shall provide notice to the City of such delinquent accounts within ninety (90) days of their required payment date, however the Company shall not be responsible for the cost or liability for the collection of franchise fees and/or late payment charges on such delinquent accounts.

For each and every month, or any part thereof, that the compensation provided for by this Franchise remains unpaid after the same becomes due and payable to the City, except as provided for Transport Gas above, there shall be added to such payment, as a late charge, a sum equivalent to the statutory rate of interest on the unpaid amount. Such late charge shall be applicable to sums that are delinquent as well as any sums due the City as a result of an audit of the Company’s records. (Ord. 18295 § 4, 7-20-04.)

Sec. 5. Payment and charges.

The payments and compensation herein provided shall be in lieu of all other licenses, taxes, charges, and fees, except that the usual general property taxes and special ad valorem property assessments, sales and excise taxes, or charges made for privileges which are not connected with the natural gas business, will be imposed on the Company and are not covered by the payments herein. From and after the date hereof, however, the permit fees required of the Company by any ordinance presently in effect or hereafter adopted for a permit to excavate in any unpaved street, alley, or other public place shall be deemed a part of the compensation paid in Section 4 and shall not be separately assessed or collected by the City; in no event, however, shall this provision be interpreted to waive the requirement of notice or application for and securing any required permits for excavation or other work in the City’s streets, alleys, or Rights-of-Way. (Ord. 18295 § 5, 7-20-04.)

Sec. 6. Use of Right-of-Way.

The use of the Right-of-Way under this Franchise by the Company shall be subject to all rules, regulations, policies, resolutions, and ordinances now or hereafter adopted or promulgated by the City in the reasonable exercise of its police power relating to use, placement, location, or management of utilities located in the City’s Right-of-Way. In addition, the Company shall be subject to all laws, rules, regulations, policies, resolutions, and ordinances now or hereafter adopted or promulgated by the City relating to permits, sidewalk and pavement cuts, utility location, construction coordination, screening, and other requirements on the use of the Right-of-Way; provided, however, that nothing contained herein shall constitute a waiver of or be construed as waiving the right of the Company to oppose, challenge, or seek judicial review of, in such manner as is now or may hereafter be provided by law, any such rules, regulation, policy, resolution, or ordinance proposed, adopted, or promulgated by the City and, further provided, other than the items enumerated in Section 5 herein, that such laws, rules, regulations, policies, resolutions, or ordinances shall not require the payment of additional fees or additional costs for the use of the Right-of-Way. In any event, the Company is granted an offset for such fees and costs against the franchise fees required to be paid hereunder. Further, the Company shall comply with the following:

a. The Company’s use of the Right-of-Way shall in all matters be subordinate to the City’s use of the Right-of-Way for any public purpose. The Company shall coordinate the installation of its Facilities in the Right-of-Way in a manner which minimizes adverse impact on Public Improvements, as reasonably determined by the City. Where installation is not otherwise regulated, the Facilities shall be placed with adequate clearance from such Public Improvements so as not to conflict with such Public Improvement.

b. All earth, materials, sidewalks, paving, crossings, utilities, Public Improvements, or improvements of any kind located within the Right-of-Way damaged or removed by the Company in its activities under this Franchise shall be fully repaired or replaced promptly by the Company without cost to the City, however, when such activity is a joint project of utilities or franchise holders, the expenses thereof shall be prorated among the participants, and to the reasonable satisfaction of the City in accordance with the ordinance and regulations of the City pertaining thereto.

c. The Company shall comply with all laws, rules, regulations, policies, resolutions, or ordinances now or hereinafter adopted or promulgated by the City relating to any construction, reconstruction, repair, or relocation of Facilities which would require any street closure which reduces traffic flow except in the event of an emergency, as reasonably determined by the City. In addition, all work performed in the traveled way or which in any way impacts vehicular or pedestrian traffic shall be properly signed, barricaded, and otherwise protected.

d. The Company shall cooperate promptly and fully with the City and take all reasonable measures necessary to provide accurate and complete information regarding the location of its Facilities located within the Right-of-Way when requested by the City or its authorized agents for Public Project. Such location, if any, and identification shall be promptly communicated to the City in writing or shall be identified through physical markings of the location without cost to the City, its employees, agents, or authorized contractors. The Company shall designate and maintain an agent, familiar with the Facilities, who is responsible for providing timely information needed by the City for the design and replacement of Facilities in the Right-of-Way during and for the design of Public Improvements. At the request of the Company, the City may include design for Facilities in the design of Public Projects. Also at the request of the Company, the City and/or its contractor(s) or agent(s) shall provide accurate and timely field locations of proposed Public Projects in the event the Company is required to install new and/or relocate its Facilities.

e. The Company shall promptly locate, remove, relocate, or adjust any Facilities located in the Right-of-Way, City’s easements, platted utility easements which contain City utilities or facilities, or other City property or facilities if reasonably necessary and requested by the City for a Public Project. Such location, removal, relocation, or adjustment for a particular Public Project shall be performed by the Company without expense to the City, its employees, agents, or authorized contractors, and shall be specifically subject to rules and regulations of the City pertaining to such; provided, that if the Company demonstrates to the satisfaction of the City that the facility was originally established in a private easement that thereafter became part of the Right-of-Way for which no compensation was paid to the Company by the City, the removal, relocation, or adjustment shall be without expense to the Company unless such private easement had been acquired by the City from the Company. If additional location, removal, relocation, or adjustment is the result of the inaccurate or mistaken information of the Company, the Company shall be responsible for costs associated with such without expense to the City. Likewise, if additional location, removal, relocations, or adjustment is the result of inaccurate or mistaken information of the City and/or its contractor(s), the City or its agent shall reimburse the Company for any additional expense necessarily incurred by the Company directly due to such inaccurate or mistaken information. The Company shall only be responsible for removal, relocation, or adjustment of Facilities located in the Right-of-Way, the City’s easements, platted utility easements which contain City utilities or facilities, or other City property or facilities at the Company’s sole cost once each seven (7) years for that particular facility. The City shall reimburse the Company for the removal, relocation, or adjustment of the Company’s facilities located in the Right-of-Way or the City’s easements if required before the expiration of seven (7) years from the date of the last relocation, removal, or adjustment of that particular facility.

The Company shall not be responsible for the expenses of relocation to accommodate any new Public Project for Private Development initiated after the effective date of this Ordinance. The expenses attributable to such a project shall be the responsibility of the third (3rd) party upon the request and appropriate documentation of such expense by the Company. Before such expenses may be billed to the third (3rd) party, the Company shall be required to coordinate with the third (3rd) party and the City on the design and construction to ensure that the work required is necessary and done in a cost effective manner.

The City shall continue to provide a location in the Right-of-Way for the Company’s existing Facilities as part of a Public Project.

f. It shall be the responsibility of the Company to take adequate measures to protect and defend its Facilities in the Right-of-Way from harm or damage. If the Company fails to accurately locate Facilities when requested, it shall have no claim for costs or damages against the City and its authorized contractors except to the extent the City or its authorized contractors are responsible for the harm or damage by their negligence or intentional conduct. The Company shall be responsible to the City and its agents, representatives, and authorized contractors for all damages including, but not limited to, repair costs, penalties or other expenses arising out of the failure of the Company to perform any of its obligations under this Ordinance, except to the extent another party is responsible for the harm or damage by its negligence or intentionally caused harm, provided, that if the responsibility of the City and its agents, representatives, and authorized contractors does not arise as a contractual obligation, the Company shall have the right at its option to step in and defend such claim in its own right. The above general provisions notwithstanding, the City and its authorized contractors shall take reasonable precautionary measures including calling for utility locations through Kansas One Call and exercising due caution when working near the Company’s Facilities. The Company shall have the right to collect for damages to its Facilities resulting from negligence or intentional misconduct by the City and its duly authorized agents, representatives and its contractors.

g. All technical standards governing construction, reconstruction, installation, operation, testing, use, maintenance, and dismantling of the Facilities in the Right-of-Way shall be in accordance with applicable present and future federal and state laws and regulations, including but not limited to the most recent standards of the Kansas Corporation Commission and Department of Transportation, and further, to the extent they are not inconsistent with federal or state laws, City of Topeka standard technical specifications as may be amended from time to time, or such substantive equivalents as may hereafter be adopted or promulgated. It is understood that the standards established in this paragraph are minimum standards and the requirements established or referenced in this Franchise may be additional to or stricter than such minimum standards. (Ord. 18295 § 6, 7-20-04.)

Sec. 7. Indemnity and hold harmless.

The Company shall indemnify and hold and save the City, its officers, employees, agents, and authorized contractors, harmless from and against all claims, damages, expense, liability, and costs including reasonable attorney fees, to the extent occasioned in any manner by the Company’s occupancy of the Right-of-Way, except to the extent that such were caused by the negligence or intentional conduct of the City, its duly authorized officers, employees, agents, or authorized contractors. In the event a claim shall be made or an action shall be instituted against the City growing out of such occupancy of the Right-of-Way by Facilities of the Company, then upon notice by the City to the Company, the Company shall assume responsibility for the defense of such actions at the cost of the Company, subject to the option of the City to appear and defend, at its own costs, any such case; provided, that the Company shall have no duty to defend any such action to the extent that such action has resulted from the negligence or intentional misconduct of the City, its duly authorized officers, employees, agents, or authorized contractors. (Ord. 18295 § 7, 7-20-04.)

Sec. 8. Right of assignment.

This Franchise shall be assignable only in accordance with the laws of the State of Kansas, as the same may exist at the time when any assignment is made. (Ord. 18295 § 8, 7-20-04.)

Sec. 9. Termination and forfeiture of franchise.

In case of failure on the part of the Company, its successors, and assigns to comply with any of the provisions of this Ordinance, of if the Company, its successors, and assigns should do or cause to be done any act or thing prohibited by or in violation of the terms of this Ordinance, the Company, its successors, and assigns shall forfeit all rights and privileges granted by this Ordinance and all rights hereunder shall cease, terminate and become and null and void, provided that said forfeiture shall not take effect until the City serves a written notice, by certified registered mail, upon the manager of the Company, at its principal office in the City, setting forth in detail in such notice, the neglect or failure complained of, and the Company shall have ninety (90) days thereafter in which to comply with the conditions of this Franchise. If at the end of such ninety (90) day period the City deems that the conditions of this Franchise have not been complied with by the Company and that this Franchise is subject to cancellation by reason thereof, the City, in order to terminate this Franchise, shall send notice of termination of the franchise by certified registered mail, to be effective sixty (60) days after the date of such notice. The letter shall set out the grounds upon which the franchise is to be cancelled or terminated. If within sixty (60) days after the letter has been sent the Company shall not have instituted an action, either in the District Court of Shawnee County, Kansas, or in some other court of competent jurisdiction to determine whether or not the Company has violated the terms of this Franchise and that this Franchise is subject to cancellation by reason thereof, this Franchise shall be canceled and terminated at the end of such sixty (60) day period. If within such sixty (60) day period after the letter has been sent, the Company does institute an action, as above provided, to determine whether or not Company has violated the terms of this Franchise and that this Franchise is subject to cancellation by reason thereof, and prosecutes such action to final judgment with due diligence, then, in such event, if the court finds that this Franchise is subject to cancellation by reason of the violation of its terms, this Franchise shall terminate thirty (30) days after such final judgment is rendered or an appeal therefrom becomes final. The failure of the Company to comply with any of the provisions of this Ordinance or the doing or causing to be done by the Company of anything prohibited by or in violation of the terms of this Ordinance shall not be a ground for the forfeiture thereof when such act or omission on the part of the Company is due to any cause or delay beyond the control of the Company, its successors and assigns, or bona fide legal proceedings. (Ord. 18295 § 9, 7-20-04.)

Sec. 10. Rights and duties of company upon expiration of franchise.

Upon expiration of this Franchise, whether by lapse of time, by agreement between the Company and the City, or by forfeiture thereof, the Company shall have the right to remove any and all of its mains and pipes, laterals, appurtenances, and equipment used in its business within a reasonable time after such expiration, but in such event, it shall be the duty of the Company, immediately upon and during such removal to restore the streets, avenues, alleys, parks, and other public ways and grounds from which said pipes, laterals, and other equipment have been removed, to the equivalent condition as the same were before said removal was effected. (Ord. 18295 § 10, 7-20-04.)

Sec. 11. Acceptance of terms by company.

In the event that within thirty (30) days after the final passage and approval of this Ordinance, the Company shall file with the City Clerk of the City its acceptance in writing of the provisions, terms and conditions of this Ordinance, duly acknowledged before an officer authorized by law to administer oaths, this Ordinance shall constitute a non-exclusive contract between the City and the Company. (Ord. 18295 § 11, 7-20-04.)

Sec. 12. Conditions of franchise.

This non-exclusive franchise, grant, and privilege is granted under and subject to all applicable laws and under and subject to all of the orders, rules, and regulations now or hereafter adopted by governmental bodies now or hereafter having jurisdiction, and each and every provision hereof shall be subject to acts of God, fires, strikes, riots, floods, war and other causes beyond Company’s control. (Ord. 18295 § 12, 7-20-04.)

Sec. 13. Invalidity of ordinance.

If any clause, sentence, or section of this Ordinance shall be held to be invalid, it shall not affect the remaining provisions of this Ordinance. (Ord. 18295 § 13, 7-20-04.)

Sec. 14. Effective date of ordinance.

This Ordinance shall take effect and be in force from and after its passage, and approval by the City, acceptance by the Company, and publication in the official city newspaper. (Ord. 18295 § 14, 7-20-04.)

Sec. 15. Repeal of conflicting ordinances.

Ordinance No. 15667, which heretofore granted a non-exclusive franchise to the Company, and which became a contract between the City and the Company in accordance with its terms and all other ordinances and resolutions or parts thereof inconsistent or in conflict with the terms hereof, are hereby canceled, annulled, repealed as of the first cycle of the monthly billing cycle pursuant to Section 4 of this Ordinance, and set aside but only to the extent that Ordinance No. 15667 and all other applicable ordinances and resolutions relate to the distribution of natural gas. Ordinance No. 15667 shall remain in full force and effect for those provisions therein which relate to the transmission, distribution and sale of electricity. (Ord. 18295 § 15, 7-20-04.)

Division 2. Transportation, Distribution and Sale of Natural Gas or Other Energy Through Pipelines or Distribution Systems

Sec. 1. Definitions.

“City” shall mean the City of Topeka, Kansas.

“Consumer” or “user” shall mean, without limitation, any individual person, business, corporation, company, partnership, firm, limited liability corporation, limited liability partnership, unincorporated association, joint venture, trust, municipality, or public corporation served by a Franchised Entity or Provider through a Distribution System.

“Distribution system” or “distribution facilities” shall mean a pipeline or system of pipelines, including without limitation, mains, pipes, boxes, reducing and regulating stations, laterals, conduits, and services extensions, together with all necessary appurtenances thereto, or any part thereof, for the purpose of supplying natural gas or Other Energy for light, heat, power, and all other purposes.

“Franchise entity” shall mean any entity that has a franchise granted by the City for supplying of natural gas under the procedures and provisions of K.S.A. 12-2001, et seq., as amended; such entity at the effective date of this Ordinance is Kansas Gas Service, a Division of ONEOK, Inc., as the assign of Gas Service Company.

“Gross receipts” shall mean

1. Any and all compensation and other consideration derived directly or indirectly by the Provider from:

a. Any transportation, distribution, or sale of natural gas to a Consumer for any use, including domestic, commercial, and industrial purposes, and including without limitation interruptible, single, and firm sales; and

b. Any operation or use of any or all of the Distribution Facilities in the Public Right-of-Way by the provider or others, including without limitation, charges as provided in tariffs filed and approved and shall also include all fees or rental received by the Provider for the lease or use of pipeline capacity within the corporate limits of the City.

2. Except the Gross receipts shall not include:

a. Connection and disconnection fees, reconnection fees, returned check charges, temporary service charges, and delayed or late payment charges as such terms are used in tariffs or in the natural gas industry; and

b. Compensation from the sale of natural gas when:

(i) The Customer purchases the natural gas as a separate and identifiable commodity that is not subject to a regulated tariff rate; and

(ii) On which the Volumetric Rate is applied; or

c. Compensation from the sale of natural gas when a franchise fee has been paid by another Franchised Entity on the same transaction.

“Other energy” shall mean energy provided in a gaseous, liquid, or slurry mixture form through pipelines for light, heat, power, and all other purposes as an alternative or replacement for natural gas, but specifically, it shall not include electrical energy.

“Provider” shall mean any business, including any individual person, business, corporation, company, partnership, firm, limited liability corporation, limited liability partnership, unincorporated association, joint venture, trust, municipality, or public corporation providing the transportation, distribution, or sale of natural gas or Other Energy to a Consumer, whether through its own Distribution System, the Distribution System of a Franchised Entity, or through the Distribution System of another, and shall also include a Consumer transporting natural gas or Other Energy for its own use.

“Public Right-of-Way” shall mean present and future streets, alleys, rights-of-way, and public easements, including easements dedicated in plats of the City for streets and alleys.

“Volumetric rate” shall mean $0.2374 per MCF, or such amount as may be hereafter calculated and filed with the City Clerk according to the provisions of this Ordinance. (Ord. 18296 § 1, 7-20-04.)

Sec. 2. Application of ordinance.

From and after the effective date of the ordinance, no natural gas or Other Energy shall be transported, distributed, or sold by any Provider to any Consumer for use within the corporate limits of the City through a Distribution System located in whole or in part in the Public Right-of-Way of the City except in accordance with the provisions of this Ordinance. This Ordinance applies to any distribution to a Consumer within the City whether or not the portion of the Distribution System serving the Consumer is in the Public Right-of-Way so long as any portion of the Distribution System of the Provider is in the Public Right-of-Way. (Ord. 18296 § 2, 7-20-04.)

Sec. 3. Franchise required.

1. Every Provider subject to this Ordinance shall obtain a franchise from the City under the provisions of K.S.A. 12-2001 et seq., for the use of Distribution Systems located in Public Right-of-Way. Any Provider which only uses the Distribution System of a Franchised Entity and which reports and pays a sum equal to the compensation calculated by Section 4(2) of this Ordinance to the City through such Franchised Entity shall be exempt from the requirement of a separate franchise. Any interstate pipeline transportation company which is otherwise a Provider under this Ordinance shall not be required to obtain a separate franchise under this section, provided that all Users of such interstate pipeline transportation company which are located within the City shall obtain a franchise and shall report and pay a sum equal to the compensation calculated by Section 4(1)(b) of this Ordinance and a sum equal to five percent (5%) of the amount paid for the transportation of such natural gas.

2. The franchise required under this Ordinance shall substantively contain the following elements:

a. In consideration of and as compensation for the franchise, the Provider shall agree to pay to the City a sum equivalent to fees calculated in accordance with Section 4.

b. The payments and compensation paid by the Provider shall be in lieu of all other licenses, taxes, charges, and fees, except the usual general property taxes and special ad valorem property taxes, sales and excise taxes, and any permit fees and charges for pavement cuts or other permit fees and charges based on restoring premises to their same condition, or charges made for privileges which are not in any way connected with the natural gas or Other Energy business, as such, will be imposed on the Provider and are not covered by the franchise fee payments.

c. The Provider shall agree that the City shall have access to and the right to examine and audit all records reasonably necessary to verify the payment of the franchise fees. If any such payment is found to be incorrect, then payment shall be made upon a corrected statement. The Provider shall agree that for each and every month, or any part thereof, that the franchise compensation remains unpaid after the same becomes due and payable by the Provider, there shall be added as a late charge a sum equivalent to the statutory rate for interest on the unpaid amount.

d. Provider shall agree to hold the City harmless from any and all damages arising from the exercise of any right or privilege granted under this Ordinance and the franchise, and from any and all damages accruing from the neglect or mismanagement of its employees, agents, or servants in the exercise of any right or privilege granted under this Ordinance and the franchise.

e. Subject to the approval of the regulatory body having jurisdiction and control over rules and regulations of the Provider at the time in question, the Provider shall agree that the City has the right to make such reasonable rules and regulations for the protection of its property and for the distribution and sale of gas, and the appropriate conduct of business as the City may from time to time deem necessary.

f. The franchise shall be non-exclusive.

g. The franchise shall be for a term expiring no later than the earliest date of expiration of the franchise of any Franchised Entity and subject to reopening and renegotiation upon events materially affecting the rights or obligations of the City or Provider.

h. In the event the Provider owns or maintains all or any portion of a Distribution System, it shall agree to provisions on the use of the Public Right-of-Way and the construction, location, and relocation of facilities, and the quality of standards of service, all substantively equivalent to those of the Franchised Entities.

i. The Provider shall agree to file its acceptance in writing of the provisions, terms, and conditions of the franchise with the City Clerk within thirty (30) days after final passage and approval of the franchise ordinance. (Ord. 18296 § 3, 7-20-04.)

Sec. 4. Calculation of fees.

1. Natural Gas Fees by a Provider Required to Have a Franchise. In consideration of and as compensation for the franchise granted to the Provider by the City, the Provider shall make an accounting on a monthly basis to the City of all sales, distribution, or transportation to any Consumer, or User for use within the City by the Provider or by others through the Distribution Facilities of the Provider. The Provider shall pay the City a franchise fee calculated as follows:

a. A sum equal to five percent (5%) of the Gross Receipts.

b. A sum equal to the Volumetric Rate multiplied by the number of MCF of natural gas transported or distributed by the Provider.

Such sums shall be adjusted for uncollectible receivables and for uncollectible receivables which are later collected. Such payments shall be made to the City under procedures established by the City Treasurer within thirty (30) days of the last day of the month to which such accounting shall apply.

2. Natural Gas Fees by a Provider Through a Franchised Entity. In consideration of and as compensation for the use of the Public Right-of-Way, any Provider using the Distribution System of a Franchised Entity (other than Provider) shall pay the City through the Franchised Entity a fee calculated in the manner provided in Section 4(1)(b). Such payments shall be made monthly under procedures established by the Franchised Entity.

3. Other Energy Fees. In consideration of and as compensation for the franchise granted to the Provider by the City, the Provider shall make an accounting and provide compensation to the City for the transportation, distribution, and sale of Other Energy to any Consumer, or User for use within the City by the Provider or by others through the Distribution Facilities of the Provider. The Provider shall pay the City a franchise fee that is calculated in a manner provided in each franchise that is substantially equivalent to the fees paid by Providers of natural gas, taking into account the alternative form of energy, its value per unit, and the amount of energy necessary for light, heat, power, or other purposes. (Ord. 18296 § 4, 7-20-04.)

Sec. 5. Adjustment of volumetric rate.

The Volumetric Rate shall be recalculated annually by the City beginning January 1, 2005, based upon the Settlement Prices. The Volumetric Rate calculation form on file with the City Clerk and incorporated herein by reference shall be used for the recalculation of the Volumetric Rate. The recalculation shall be effective each January 1 and shall be based on Settlement Prices for the twelve (12) month period beginning in July of the second (2nd) preceding year and ending in June of the preceding year. For the fifteenth (15th) day of each month during said twelve (12) month period, the Settlement Prices for the next twelve (12) months will be summed and divided by twelve (12) to determine an average Settlement Price. The average Settlement Prices for each of the twelve (12) months shall then be summed and divided by twelve (12) and multiplied by five percent (5%) to obtain the Volumetric Rate to be effective January 1 of the next succeeding year. The Volumetric Rate shall be calculated in July annually by the City and shall be effective upon filing of the completed Volumetric Rate Calculation Form with the City Clerk without requirement of amendment to this Ordinance. (Ord. 18296 § 5, 7-20-04.)

Sec. 6. Reporting and collection provisions.

1. All Providers using the Public Right-of-Way for the transportation, distribution, or sale of natural gas or Other Energy, whether through their own Distribution Facilities, through the Distribution Facilities of a Franchised Entity, or through the Distribution Facilities of another, shall report or register such use with the City’s Director of Finance on such forms as are established and furnished by the City’s Director of Finance and subject to such administrative fees necessary to cover the costs of the effective administration of the ordinance as established by the City’s Director of Finance. Such registration shall include the name, address, and agent for the Provider and shall include such information on the method and means of transportation, distribution, or sale to Consumers as may be reasonably required by the City for enforcement of this Ordinance. The City shall have access to and the right to examine and audit such records necessary to verify the payment of compensation.

2. Franchised Entities may serve as the agent for Providers using the Distribution System of the Franchised Entity for the purposes of reporting and collection under this Ordinance.

3. Franchised Entities with a current and effective franchise and any Provider which reports and pays a sum equal to the fees calculated by Section 4(2) to the City through a Franchised Entity shall be exempt from the separate reporting and registration requirements of the ordinance. (Ord. 18296 § 6, 7-20-04.)

Sec. 7. Times.

1. All Providers shall make application within thirty (30) days of the effective date of this Ordinance, unless the Provider is exempt from the requirement of a separate franchise under the provisions of Section 3(1). It is the intent of this Ordinance that a franchise ordinance consistent with the requirements of Section 3 will be submitted to the governing body for consideration according to statutory procedures immediately upon such application.

2. All Providers exempted from the requirement of a separate franchise under Section 3(1) shall be responsible for the fees required by this Ordinance upon the effective date of the franchise ordinance for the Franchised Entity which authorizes the Franchised Entity to collect payments from the Provider on behalf of the City.

3. Any Provider hereafter becoming subject to this Ordinance shall immediately comply with the provisions of the ordinance prior to use of Public Right-of-Way for the transportation, distribution, sale of natural gas, or Other Energy.

4. The fees calculated under Section 4 of this Ordinance shall be assessed and shall be effective as of the first cycle of the monthly billing cycle which begins no later than sixty (60) days after final passage and approval by the City and acceptance by the Provider. (Ord. 18296 § 7, 7-20-04.)

Sec. 8. Violations.

It shall be unlawful for a Provider to transport, distribute, or sell natural gas or Other Energy to a Consumer in violation of this Ordinance. (Ord. 18296 § 8, 7-20-04.)

Sec. 9. Penalties.

The City may seek such criminal or civil penalties as are provided by law, ordinance, or regulation. Any person who violates any of the provisions of this Ordinance shall, upon conviction, be deemed guilty of a misdemeanor and shall be punished by a fine not exceeding four hundred ninety-nine dollars ($499.00). Each and every day of operation in violation of the ordinance shall constitute a separate offense.

The City shall have the right to seek an injunction or such other equitable relief in the appropriate court to stop any violation of the ordinance or of any permit of other form of authorization granted hereunder and shall have such other remedies as are and as may be from time provided by law, ordinance, or regulation. (Ord. 18296 § 9, 7-20-04.)

Sec. 10. Savings clause.

If any clause, sentence, or section of this Ordinance shall be held to be invalid, it shall not affect the remaining provisions of this Ordinance. (Ord. 18296 § 10, 7-20-04.)

Sec. 11. Effective date of ordinance.

This Ordinance shall take effect and be in force from and after its passage, approval, and publication in the official city newspaper. (Ord. 18296 § 11, 7-20-04.)