Chapter I.

An ordinance granting a franchise by the City of Grand Junction to Public Service Company of Colorado, d/b/a Xcel Energy, its successors and assigns, the right to furnish, sell and distribute gas and electricity to the City and to all persons, businesses, and industry within the City and the right to acquire, construct, install, locate, maintain, operate and extend into, within and through said City all facilities reasonably necessary to furnish, sell and distribute gas and electricity within the City and the right to make reasonable use of all streets and other public places and public easements as herein defined as may be necessary; and fixing the terms and conditions thereof.

Be it ordained that the following be approved as the franchise agreement with Public Service Company of Colorado d/b/a Xcel Energy:

Article 1. Definitions

Sec. 1.0 Definitions.

For the purpose of this franchise, the following words and phrases shall have the meaning given in this article. When not inconsistent with context, words used in the present tense include the future tense, words in the plural include the singular, and words in the singular include the plural. The word “shall” is mandatory and “may” is permissive. Words not defined in this article shall be given their common and ordinary meaning.

1.1 City refers to the City of Grand Junction, a municipal corporation of the State of Colorado.

1.2 City Council or Council refers to the legislative body of the City.

1.3 Clean energy means energy produced from renewable energy resources, eligible energy sources, and by means of advanced technologies that cost-effectively capture and sequester carbon emissions produced as a by-product of power generation. For purposes of this definition, cost means all those costs as determined by the PUC.

1.4 Company refers to Public Service Company of Colorado d/b/a Xcel Energy and its successors and assigns including affiliates or subsidiaries that undertake to perform any of the obligations under this franchise.

1.5 Company facilities refer to all facilities of the company reasonably necessary to provide gas and electric service into, within and through the City, including but not limited to plants, works, systems, substations, transmission and distribution structures, lines, equipment, pipes, mains, conduit, transformers, underground lines, gas compressors, meters, meter reading devices, communication and data transfer equipment, control equipment, gas regulator stations, street lights, wire, cables and poles.

1.6 Electric gross revenues refers to those amounts of money which the company receives from the sale or delivery of electricity in the City, after adjusting for refunds, net write-offs of uncollectible accounts, corrections, or regulatory adjustments. Regulatory adjustments include, but are not limited to, credits, surcharges, refunds, and pro-forma adjustments pursuant to federal or state regulation. Electric gross revenues shall exclude any revenue for the sale or delivery of electricity to the City as a customer of the company.

1.7 Energy conservation means the decrease in energy requirements of specific customers during any selected time period, resulting in a reduction in end-use services.

1.8 Energy efficiency means the decrease in energy requirements of specific customers during any selected period with end-use services of such customers held constant.

1.9 Force majeure means the inability to undertake an obligation of this franchise due to a cause that could not be reasonably anticipated by a party or is beyond its reasonable control after exercise of best efforts to perform, including but not limited to fire, strike, war, riots, acts of governmental authority, acts of God, floods, epidemics, quarantines, labor disputes, unavailability or shortages of materials or equipment or failures or delays in delivery of materials. Neither the City nor the company shall be in breach of this franchise if a failure to perform any of the duties under this franchise is due to a force majeure condition.

1.10 Gross revenues refers to those amounts of money which the company receives from the sale of gas and electricity within the City under rates authorized by the Public Utilities Commission, as well as from the transportation of gas to its customers within the City and those amounts of money, excluding expense reimbursements, which the company receives from the use of company facilities in streets and other public places (unless otherwise preempted by applicable federal or State law), as adjusted for refunds, net write-offs of uncollectible accounts, corrections, or regulatory adjustments. Regulatory adjustments include, but are not limited to, credits, surcharges, refunds, and pro-forma adjustments pursuant to federal or State regulation. Gross revenues shall exclude any revenues from the sale of gas or electricity to the City or the transportation of gas to the City.

1.11 Other City property refers to the surface, the air space above the surface and the area below the surface of any property owned or controlled by the City or hereafter held by the City, that would not otherwise fall under the definition of streets, but which provides a suitable location for the placement of company facilities as specifically approved in writing by the City.

1.12 Private project refers to any project which is not covered by the definition of public project.

1.13 Public project refers to (1) any public work or improvement within the City that is wholly or beneficially owned by the City; or (2) any public work or improvement within the City where 50 percent or more of the funding is provided by any combination of the City, the federal government, the State of Colorado, or any Colorado county, but excluding all entities established under Title 32 of the Colorado Revised Statutes.

1.14 Public Utilities Commission or PUC refers to the Public Utilities Commission of the State of Colorado or other State agency succeeding to the regulatory powers of the Public Utilities Commission.

1.15 Public utility easement refers to any easement over, under, or above public or private property, dedicated to the use of public utility companies for the placement of utility facilities, including but not limited to company facilities. Public utility easement shall not include any easement that is located within streets or other city property.

1.16 Renewable energy resources means wind; solar; geothermal; biomass from nontoxic plant matter consisting of agricultural crops or their byproducts, urban wood waste, mill residue, slash, or brush, or from animal wastes and products of animal wastes, or from methane produced at landfills or as a by-product of the treatment of wastewater residuals; new hydroelectricity with a nameplate rating of 10 megawatts or less, and hydroelectricity in existence on January 1, 2005, with a nameplate rating of 30 megawatts or less; fuel cells using hydrogen derived from a renewable energy resource; and recycled energy produced by a generation unit with a nameplate capacity of not more than 15 megawatts that converts the otherwise lost energy from the heat from exhaust stacks or pipes to electricity and that does not combust additional fossil fuel, and includes any eligible renewable energy resource as defined in § 40-2-124(1)(a), C.R.S., as the same shall be amended from time to time.

1.17 Residents refers to all persons, businesses, industries, governmental agencies, including the City, and any other entity whatsoever, presently located or to be hereinafter located, in whole or in part, within the territorial boundaries of the City.

1.18 Streets or City streets refers to the surface, the air space above the surface and the area below the surface of any City-dedicated streets, alleys, bridges, roads, lanes, public easements (excluding any easements the terms of which do not permit the use thereof by public utilities), and other public rights-of-way within the City, which are primarily used for vehicle traffic. Streets shall not include public utility easements.

1.19 Supporting documentation refers to all information reasonably required in order to allow the company to design and construct any work performed under the provisions of this franchise.

1.20 Tariffs refer to those tariffs of the company on file and in effect with the PUC.

1.21 Utility service refers to the sale of gas or electricity to residents by the company under rates approved by the PUC, as well as the delivery of gas to residents by the company.

Article 2. Grant of Franchise

Sec. 2.1 Grant of franchise.

(a) Grant. The City hereby grants to the company, subject to all conditions, limitations, terms, and provisions contained in this franchise, the nonexclusive right to make reasonable use of City streets and other City property:

(1) To provide utility service to the City and to its residents; and

(2) To acquire, purchase, construct, install, locate, maintain, operate, and extend into, within and through the City all company facilities reasonably necessary for the generation, production, manufacture, sale, storage, purchase, exchange, transmission, transportation and distribution of utility service within and through the City.

(b) Street Lighting and Traffic Signal Lighting Service. Street lighting service and traffic signal lighting service within the City shall be governed by tariffs on file with the Colorado PUC.

Sec. 2.2 Conditions and limitations.

(a) Scope of Franchise. The grant of this franchise shall extend to all areas of the City as it is now or hereafter constituted that are within the company’s PUC-certificated service territory; however, nothing contained in this franchise shall be construed to authorize the company to engage in activities other than the provision of utility service.

(b) Subject to City Usage. The right to make reasonable use of City streets to provide utility service to the City and its residents under the franchise is subject to and subordinate to any City usage of said streets.

(c) Prior Grants Not Revoked. This grant is not intended to revoke any prior license, grant, or right to use the streets and such licenses, grants or rights of use are hereby affirmed. Such rights shall, however, be governed by the terms of this franchise.

(d) Franchise Not Exclusive. The rights granted by this franchise are not, and shall not be deemed to be, granted exclusively to the company, and the City reserves the right to make or grant a franchise to any other person, firm, or corporation.

Sec. 2.3 Effective date and term.

(a) Term. This franchise shall take effect on June 1, 2011, and shall supersede any prior franchise grants to the company by the City. This franchise shall terminate on May 31, 2031, unless extended by mutual consent.

Article 3. City Police Powers

Sec. 3.1 Police powers.

The City shall have the right to adopt, from time to time, in addition to the provisions contained herein, such laws, including ordinances and regulations, as it may deem necessary in the exercise of its governmental powers. If the City considers making any substantive changes in its local codes or regulations that in the City’s reasonable opinion will significantly impact the company’s operations in the City’s streets and other City property, it will make a good faith effort to advise the company of such consideration; provided, however, that lack of notice shall not be justification for the company’s noncompliance with any applicable local requirements.

Sec. 3.2 Regulation of streets or other City property.

The company expressly acknowledges the City’s right to enforce regulations concerning the company’s access to or use of the streets, including requirements for permits.

Sec. 3.3 Compliance with laws.

The company shall promptly and fully comply with all laws, regulations, permits, and orders enacted by the City.

Article 4. Franchise Fee

Sec. 4.1 Franchise fee.

(a) Fee. In partial consideration for the franchise, which provides for the company’s use of City streets and other City property, which are valuable public properties acquired and maintained by the City at great expense to its residents, and in recognition that the grant to the company of the use of City streets and other City property is a valuable right, the company shall pay the City a sum equal to three percent of all gross revenues. To the extent required by law, the company shall collect this fee from a surcharge upon City residents who are customers of the company.

(b) Obligation in Lieu of Fee. In the event that the franchise fee specified herein is declared void for any reason by a court of competent jurisdiction, unless prohibited by law, the company shall be obligated to pay the City, at the same times and in the same manner as provided in the franchise, an aggregate amount equal to the amount which the company would have paid as a franchise fee as partial consideration for use of the City streets. To the extent required by law, the company shall collect the amounts agreed upon through a surcharge upon utility service provided to City residents.

(c) Changes in Utility Service Industries. The City and the company recognize that utility service industries are the subject of restructuring initiatives by legislative and regulatory authorities, and are also experiencing other changes as a result of mergers, acquisitions, and reorganizations. Some of such initiatives and changes have or may have an adverse impact upon the franchise fee revenues provided for herein. In recognition of the length of the term of this franchise, the company agrees that in the event of any such initiatives or changes and to the extent permitted by law, upon receiving a written request from the City, the company will cooperate with and assist the City in modifying this franchise to assure that the City receives an amount in franchise fees or some other form of compensation that is the same amount of franchise fees paid to the City as of the date that such initiatives and changes adversely impact franchise fee revenues.

(d) Utility Service Provided to the City. No franchise fee shall be charged to the City for utility service provided directly or indirectly to the City for its own consumption, including street lighting service and traffic signal lighting service, unless otherwise directed by the City.

Sec. 4.2 Remittance of franchise fee.

(a) Remittance Schedule. Franchise fee revenues shall be remitted by the company to the City as directed by the City in monthly installments not more than 30 days following the close of each month.

(b) Correction of Franchise Fee Payments. In the event that either the City or the company discovers that there has been an error in the calculation of the franchise fee payment to the City, it shall provide written notice to the other party of the error. If the party receiving written notice of error does not agree with the written notice of error, that party may challenge the written notice of error pursuant to Section 4.2(d) of this franchise; otherwise, the error shall be corrected in the next monthly payment. However, if the error results in an overpayment of the franchise fee to the City, and said overpayment is in excess of $5,000, credit for the overpayment shall be spread over the same period the error was undiscovered. All franchise fee underpayments shall be corrected in the next monthly payment, together with interest computed at the rate set by the PUC for customer security deposits held by the company, from the date when due until the date paid. In no event shall either party be required to fund or refund any overpayment or underpayment made as a result of a company error which occurred more than five years prior to the discovery of the company error.

(1) Every three years commencing at the end of the third year of this franchise, the company shall conduct an internal audit to investigate and determine the correctness of the franchise fee paid to the City. Such audit shall be limited to the previous three calendar years. The company shall provide a written report to the City Manager containing the audit findings.

(2) If the City disagrees with the results of the audit, and if the parties are not able to informally resolve their differences, the City may conduct its own audit at its own expense, and the company shall cooperate fully, including but not necessarily limited to, providing the City’s auditor with all information reasonably necessary to complete the audit.

(3) If the results of a City audit conducted pursuant to subsection (c)(2) of this section concludes that the company has underpaid the City by two percent or more, in addition to the obligation to pay such amounts to the City, the company shall also pay all costs of the City’s audit.

(d) Fee Disputes. Either party may challenge any written notification of error as provided for in Section 4.2(b) of this franchise by filing a written notice to the other party within 30 days of receipt of the written notification of error. The written notice shall contain a summary of the facts and reasons for the party’s notice. The parties shall make good faith efforts to resolve any such notice of error before initiating any formal legal proceedings for the resolution of such error.

(e) Reports. Upon written request by the City, but not more than once per year, the company shall supply the City with reports, in such formats and providing such details as reasonably requested by the City, of all suppliers of utility service that utilize company facilities to sell or distribute utility service to residents and the names and addresses of each such supplier.

Sec. 4.3 Franchise fee payment not in lieu of permit or other fees.

Payment of the franchise fee does not exempt the company from any other lawful tax or fee imposed generally upon persons doing business within the City, including any fee for a street closure permit, an excavation permit, a street cut permit, or other lawful permits hereafter required by the City, except that the franchise fee provided for herein shall be in lieu of any occupation, occupancy or similar tax for the use of City streets and other City property.

Article 5. Administration of Franchise

Sec. 5.1 City designee.

The City Manager shall designate in writing to the company an official having full power and authority to administer the franchise. The City Manager may also designate one or more City representatives to act as the primary liaison with the company as to particular matters addressed by this franchise and shall provide the company with the name and telephone numbers of said City representatives. The City Manager may change these designations by providing written notice to the company. The City’s designee shall have the right, at all reasonable times, to inspect any company facilities in City streets and other City property.

Sec. 5.2 Company designee.

The company shall designate a representative to act as the primary liaison with the City and shall provide the City with the name, address, and telephone number for the company’s representative under this franchise. The company may change its designation by providing written notice to the City. The City shall use this liaison to communicate with the company regarding utility service and related service needs for City facilities.

Sec. 5.3 Coordination of work.

(a) The company agrees to coordinate with the City its activities in City streets and other City property. The City and the company will meet annually upon the written request of the City designee to exchange their respective short-term and long-term forecasts and/or work plans for construction and other similar work which may affect City streets and other City property. The City and company shall hold such meetings as either deems necessary to exchange additional information with a view towards coordinating their respective activities in those areas where such coordination may prove beneficial and so that the City will be assured that all provisions of this franchise, building and zoning codes, and City air and water pollution regulations are complied with, and that aesthetic and other relevant planning principles have been given due consideration.

Article 6. Supply, Construction, and Design

Sec. 6.1 Purpose.

The company acknowledges the critical nature of the municipal services performed or provided by the City to the residents which require the company to provide prompt and reliable utility service and the performance of related services for City facilities. The City and the company wish to provide for certain terms and conditions under which the company will provide utility service and perform related services for the City in order to facilitate and enhance the operation of City facilities. They also wish to provide for other processes and procedures related to the provision of utility service to the City.

Sec. 6.2 Supply.

Subject to the jurisdiction of the PUC, the company shall take all reasonable and necessary steps to provide a sufficient supply of gas and electricity to residents at the lowest reasonable cost consistent with reliable supplies.

Sec. 6.3 Service to City facilities.

(a) Transport Gas. To the extent the City is or elects to become a gas transport customer of the company, the company shall transport natural gas purchased by the City for use in City facilities pursuant to separate contracts with the City.

(b) Charges to the City. No charges to the City by the company for utility service (other than gas transportation which shall be subject to negotiated contracts) shall exceed the lowest charge for similar service or supplies provided by the company to any other similarly situated customer of the company. The parties acknowledge the jurisdiction of the Colorado PUC over the company’s regulated intrastate electric and gas rates.

Sec. 6.4 Restoration of service.

(a) Notification. The company shall provide to the City daytime and nighttime telephone numbers of a designated company representative from whom the City designee may obtain status information from the company on a 24-hour basis concerning interruptions of utility service in any part of the City.

(b) Restoration. In the event the company’s gas system or electric system, or any part thereof, is partially or wholly destroyed or incapacitated, the company shall use due diligence to restore such systems to satisfactory service within the shortest practicable time, or provide a reasonable alternative to such system if the company elects not to restore such system.

Sec. 6.5 Obligations regarding company facilities.

(a) Company Facilities. All company facilities within City streets shall be maintained in good repair and condition.

(b) Company Work within the City. All work within City streets performed or caused to be performed by the company shall be done:

(1) In a high-quality manner;

(2) In a timely and expeditious manner;

(3) In a manner which minimizes inconvenience to the public;

(4) In a cost-effective manner, which may include the use of qualified contractors; and

(5) In accordance with all applicable laws, ordinances, and regulations.

(c) No Interference with City Facilities. Company facilities shall not interfere with any City facilities, including water facilities, sanitary or storm sewer facilities, communications facilities, or other City uses of the streets or other City property. Company facilities shall be installed and maintained in City streets and other City property so as to minimize interference with other property, trees, and other improvements and natural features in and adjoining the streets and other City property in light of the company’s obligation under Colorado law to provide safe and reliable utility facilities and services.

(d) Permit and Inspection. The installation, renovation, and replacement of any company facilities in the City streets or other City property by or on behalf of the company shall be subject to permit, inspection and approval by the City. Such inspection and approval may include, but shall not be limited to, the following matters: location of company facilities, cutting and trimming of trees and shrubs, and disturbance of pavement, sidewalks, and surfaces of City streets or other City property. The company agrees to cooperate with the City in conducting inspections and shall promptly perform any remedial action lawfully required by the City pursuant to any such inspection.

(e) Compliance. The company and all of its contractors shall comply with the requirements of all municipal laws, ordinances, regulations, permits, and standards, including but not limited to requirements of all building and zoning codes, and requirements regarding curb and pavement cuts, excavating, digging, and other construction activities. The company shall assure that its contractors working in City streets or other City property hold the necessary licenses and permits required by law.

(f) Increase in Voltage. The company shall reimburse the City for the cost of upgrading the electrical system or facility of any City building or facility that uses utility service where such upgrading is solely caused or occasioned by the company’s decision to increase the voltage of delivered electrical energy. This provision shall not apply to voltage increases required by law, including but not limited to a lawful order of the PUC, or voltage increases requested by the City.

(g) As-Built Drawings. Upon written request of the City designee, the company shall provide within 14 days of the request, on a project-by-project basis, as-built drawings of any company facility installed within the City streets or contiguous to the City streets. As used in this section, as-built drawings refers to the facility drawings as maintained in the company’s geographical information system or any equivalent company system. The company shall not be required to create drawings that do not exist at the time of the request.

Sec. 6.6 Excavation and construction.

The company shall be responsible for obtaining, paying for, and complying with all applicable permits including, but not limited to, excavation, street closure and street cut permits, in the manner required by the laws, ordinances, and regulations of the City. Although the company shall be responsible for obtaining and complying with the terms of such permits when performing relocations requested by the City under Section 6.8 of this franchise and undergrounding requested by the City under Article 11 of this franchise, the City will not require the company to pay the fees charged for such permits.

Sec. 6.7 Restoration.

When the company does any work in or affecting the City streets or other City property, it shall, at its own expense, promptly remove any obstructions therefrom and restore such City streets or other City property to a condition that is substantially the same as existed before the work, and that meets applicable City standards. If weather or other conditions do not permit the complete restoration required by this section, the company may with the approval of the City, temporarily restore the affected City streets or other City property; provided, that such temporary restoration is at the company’s sole expense and provided further that the company promptly undertakes and completes the required permanent restoration when the weather or other conditions no longer prevent such permanent restoration. Upon the request of the City, the company shall restore the streets or other City property to a better condition than existed before the work was undertaken, provided that the City shall be responsible for any incremental costs of such restoration not required by then-current City standards. If the company fails to promptly restore the City streets or other City property as required by this section, and if, in the reasonable discretion of the City immediate action is required for the protection of public health and safety, the City may restore such City streets or other City property or remove the obstruction therefrom; provided, however, City actions do not interfere with company facilities. The company shall be responsible for the actual cost incurred by the City to restore such City streets or other City property or to remove any obstructions therefrom. In the course of its restoration of City streets or other City property under this section, the City shall not perform work on company facilities unless specifically authorized by the company in writing on a project-by-project basis and subject to the terms and conditions agreed to in such authorization.

Sec. 6.8 Relocation of company facilities.

(a) Relocation Obligation. The company shall temporarily or permanently remove, relocate, change or alter the position of any company facility in City streets or in other City property at no cost or expense to the City whenever such removal, relocation, change or alteration is necessary for the completion of any public project. Any City-required removal, relocation, change or alteration of company facilities located in any company owned property or any private easement or public utility easement shall be at no cost to the company. For all relocations, the company and the City agree to cooperate on the location and relocation of the company facilities in the City streets or other City property in order to achieve relocation in the most efficient and cost-effective manner possible. Notwithstanding the foregoing, once the company has relocated any company facility at the City’s direction, if the City requests that the same company facility be relocated within two years after the date of the prior relocation, the subsequent relocation shall not be at the company’s expense.

(b) Private Projects. The company shall not be responsible for the expenses of any relocation required by private projects, and the company has the right to require the payment of estimated relocation expenses from the affected private party before undertaking such relocation.

(c) Relocation Performance. The relocations set forth in Section 6.8(a) of this franchise shall be completed within a reasonable time, not to exceed 120 days from the later of the date on which the City designee requests, in writing, that the relocation commence, or the date when the company is provided all supporting documentation. The company shall receive an extension of time to complete a relocation where the company’s performance was delayed due to force majeure or the failure of the City to provide adequate supporting documentation. The company has the burden of presenting evidence to reasonably demonstrate the basis for the delay. Upon written request of the company, the City may also grant the company reasonable extensions of time for good cause shown and the City shall not unreasonably withhold any such extension.

(d) City Revision of Supporting Documentation. Any revision by the City of supporting documentation provided to the company that causes the company to substantially redesign and/or change its plans regarding facility relocation shall be deemed good cause for a reasonable extension of time to complete the relocation under the franchise.

(e) Completion. Each such relocation shall be complete only when the company actually relocates the company facilities, restores the relocation site in accordance with Section 6.7 of this franchise or as otherwise agreed with the City, and removes from the site or properly abandons on site all unused facilities, equipment, material and other impediments.

(f) Scope of Obligation. The relocation obligation set forth in this section shall only apply to company facilities located in City streets or other City property. The obligation shall not apply to company facilities located on property owned by the company in fee, or to company facilities located in privately owned easements or public utility easements.

(g) Underground Relocation. Underground facilities shall be relocated underground. Above ground facilities shall be placed above ground unless the company is paid for the incremental amount by which the underground cost would exceed the above ground cost of relocation, or the City requests that such additional incremental cost be paid out of available funds under Article 11 of this franchise.

(h) Coordination.

(1) When requested in writing by the City designee or the company, representatives of the City and the company shall meet to share information regarding anticipated projects which will require relocation of company facilities in City streets or other City property. Such meetings shall be for the purpose of minimizing conflicts where possible and to facilitate coordination with any reasonable timetable established by the City for any public project.

(2) The City shall provide the company with two years’ advance notice of any planned street repaving. The company shall make reasonable best efforts to complete any necessary or anticipated repairs or upgrades to company facilities that are located underneath the streets within the two-year period if practicable.

(i) Proposed Alternatives or Modifications. Upon receipt of written notice of a required relocation, the company may propose an alternative to or modification of the public project requiring the relocation in an effort to mitigate or avoid the impact of the required relocation of company facilities. The City shall in good faith review the proposed alternative or modification. The acceptance of the proposed alternative or modification shall be at the sole discretion of the City. In the event the City accepts the proposed alternative or modification, the company agrees to promptly compensate the City for all additional costs, expenses, or delay that the City reasonably determines resulted from the implementation of the proposed alternative.

Sec. 6.9 New or modified service requested by City.

The conditions under which the company shall install new or modified utility service to the City as a customer shall be governed by this franchise and the company’s PUC tariffs.

Sec. 6.10 Service to new areas.

If the territorial boundaries of the City are expanded during the term of this franchise, the company shall, to the extent permitted by law, extend service to residents in the expanded area at the earliest practicable time if the expanded area is within the company’s PUC-certificated service territory. Service to the expanded area shall be in accordance with the terms of the company’s PUC tariffs and this franchise, including the payment of franchise fees.

Sec. 6.11 City not required to advance funds.

Upon receipt of the City’s authorization for billing and construction, the company shall extend company facilities to provide utility service to the City as a customer, without requiring the City to advance funds prior to construction. The City shall pay for the extension of company facilities once completed in accordance with the company’s extension policy on file with the PUC.

Sec. 6.12 Technological improvements.

The company shall use its best efforts to incorporate, as soon as practicable, technological advances in its equipment and service within the City when such advances are technically and economically feasible and are safe and beneficial to the City and its residents.

Article 7. Reliability

Sec. 7.1 Reliability.

The company shall operate and maintain company facilities efficiently and economically and in accordance with the high standards and best systems, methods and skills consistent with the provision of adequate, safe, and reliable utility service.

Sec. 7.2 Franchise performance obligations.

The company recognizes that, as part of its obligations and commitments under this franchise, the company shall carry out each of its performance obligations in a timely, expeditious, efficient, economical, and workmanlike manner.

Sec. 7.3 Reliability reports.

Upon written request, the company shall provide the city with a report regarding the reliability of company facilities and utility service.

Article 8. Company Performance Obligations

Sec. 8.1 New or modified service to City facilities.

In providing new or modified utility service to City facilities, the company agrees to perform as follows:

(a) Performance. The company shall complete each project requested by the City within a reasonable time. The parties agree that a reasonable time shall not exceed 180 days from the date upon which the City designee makes a written request and provides the required supporting documentation for all company facilities other than traffic facilities. The company shall be entitled to an extension of time to complete a project where the company’s performance was delayed due to force majeure. Upon request of the company, the City designee may also grant the company reasonable extensions of time for good cause shown and the City shall not unreasonably withhold any such extension.

(b) City Revision of Supporting Documentation. Any revision by the City of supporting documentation provided to the company that causes the company to substantially redesign and/or change its plans regarding new or modified service to City facilities shall be deemed good cause for a reasonable extension of time to complete the relocation under the franchise.

(c) Completion/Restoration. Each such project shall be complete only when the company actually provides the service installation or modification required, restores the project site in accordance with the terms of the franchise or as otherwise agreed with the City and removes from the site or properly abandons on site any unused facilities, equipment, material and other impediments.

Sec. 8.2 Adjustments to company facilities.

The company shall perform adjustments to company facilities, including manholes and other appurtenances in streets and other City property, to accommodate City street maintenance, repair and paving operations at no cost to the City. In providing such adjustments to company facilities, the company agrees to perform as follows:

(a) Performance. The company shall complete each requested adjustment within a reasonable time, not to exceed 60 days from the date upon which the City makes a written request and provides to the company all information reasonably necessary to perform the adjustment. The company shall be entitled to an extension of time to complete an adjustment where the company’s performance was delayed due to force majeure. Upon request of the company, the City may also grant the company reasonable extensions of time for good cause shown and the City shall not unreasonably withhold any such extension.

(b) Completion/Restoration. Each such adjustment shall be complete only when the company actually adjusts the company facility to accommodate the City operations in accordance with City instructions and, if required, readjusts, following City paving operations.

(c) Coordination. As requested by the City or the company, representatives of the City and the company shall meet regarding anticipated street maintenance operations which will require such adjustments to company facilities in streets or other City property. Such meetings shall be for the purpose of coordinating and facilitating performance under this section.

Sec. 8.3 Third party damage recovery.

(a) Damage to Company Interests. If any individual or entity damages any company facilities that the company is responsible to repair or replace, to the extent permitted by law, the City will notify the company of any such incident of which it has knowledge and will provide to the company within a reasonable time all pertinent information within its possession regarding the incident and the damage, including the identity of the responsible individual or entity.

(b) Damage to Company Property for which the City is Responsible. If any individual or entity damages any company facilities for which the City is obligated to reimburse the company for the cost of the repair or replacement of the damaged facility, to the extent permitted by law, the company will notify the City of any such incident of which it has knowledge and will provide to the City within a reasonable time all pertinent information within its possession regarding the incident and the damage, including the identity of the responsible individual or entity.

(c) Meeting. The company and the City agree to meet periodically, upon written request of either party, for the purpose of developing, implementing, reviewing, improving and/or modifying mutually beneficial procedures and methods for the efficient gathering and transmittal of information useful in recovery efforts against third parties for damaging company facilities.

Article 9. Billing and Payment

Sec. 9.1 Billing for other utility services.

(a) Unless otherwise provided in its tariffs, the rules and regulations of the PUC, or the public utilities law, the company shall render bills monthly to the offices of the City for utility service and other related services for which the company is entitled to payment and for which the City has authorized payment.

(b) Billings for service rendered during the preceding month shall be sent to the person(s) designated by the City and payment for same shall be made as prescribed in this agreement and the applicable tariff on file and in effect from time to time with the PUC.

(c) The company shall provide all billings and any underlying support documentation reasonably requested by the City and in an editable and manipulatable electronic format that is acceptable to the company and the City.

(d) The company agrees to meet with the City designee at least annually for the purpose of developing, implementing, reviewing, and/or modifying mutually beneficial and acceptable billing procedures, methods, and formats which may include, without limitation, electronic billing and upgrades or beneficial alternatives to the company’s current most advanced billing technology, for the efficient and cost effective rendering and processing of such billings submitted by the company to the City.

Sec. 9.2 Payment to City.

In the event the City determines after written notice to the company that the company is liable to the City for payments, costs, expenses or damages of any nature, and subject to the company’s right to challenge such determination, the City may deduct all monies due and owing the City from any other amounts currently due and owing the company. Upon receipt of such written notice, the company may request a meeting between the company’s designee and a designee of the City to discuss such determination. The City agrees to attend such a meeting. As an alternative to such deduction, the City may bill the company for such assessment(s), in which case, the company shall pay each such bill within 30 days of the date of receipt of such bill. If the company challenges the City determination of liability, the City shall make such payments to the company pursuant to the company’s tariffs until the challenge has been finally resolved.

Article 10. Use of Company Facilities

Sec. 10.1 City use of company electric distribution poles.

The City shall be permitted to make use of company electric distribution poles in the City at no cost to the City for the placement of City equipment or facilities necessary to serve a legitimate police, fire, emergency, public safety or traffic control purpose. The company may allow the use of electric distribution poles for other purposes at the company’s sole discretion. The City will notify the company in advance and in writing of its intent to use company distribution poles and the nature of such use unless it is impracticable to provide such advance notice because of emergency circumstances, in which event the City will provide such notice as soon as practicable. The City shall be responsible for costs associated with modifications to Company electric distribution poles to accommodate the City’s use of such company electric distribution poles and for any electricity used. No such use of company electric distribution poles shall be required if it would constitute a safety hazard or would interfere with the company’s use of company electric distribution facilities. Any such City use must comply with the National Electric Safety Code and all other applicable laws, rules and regulations.

Sec. 10.2 City use of street lighting and traffic signal lighting poles.

The City shall be allowed to use the company’s street lighting and traffic signal lighting poles in the future for legitimate police, public safety or traffic control purposes under the terms and conditions set forth in the company’s PUC tariffs and any subsequent agreements that may be entered between the parties, but must obtain prior written approval of the company. No such use shall be allowed if the company determines in good faith that the City’s use of specific street lighting or traffic signal lighting poles creates a safety hazard or interferes with the company’s use of its utility facilities. The City shall be responsible for paying the company’s reasonable costs of determining whether the proposed use of street lighting and traffic signal lighting poles creates a safety hazard or interferes with company utility facilities.

Sec. 10.3 Existing uses.

The City shall not be required to remove its existing signs, equipment or facilities from street lighting or traffic signal lighting poles, unless the company determines after consultation with the City that attachment of specific equipment or facilities on specific poles creates a safety hazard or interferes with the company’s use of those poles. If after such determination the City is required to remove its existing equipment or facilities from those poles, the company shall allow the City 10 days from the date of written notice, including by electronic mail, within which to remove its equipment or facilities. If the City fails to remove the equipment or facilities, the company may perform the removal at the City’s sole expense.

Sec. 10.4 Third party use of company facilities.

If requested in writing by the City, the company may allow other companies who hold franchises, or otherwise have obtained consent from the City to use the streets, to utilize company electric distribution poles for the placement of their facilities upon approval by the company and agreement upon reasonable terms and conditions including payment of fees established by the company. Use of other company facilities by third parties shall be in accordance with the company’s tariffs. No such use shall be permitted if it would constitute a safety hazard or would interfere with the company’s use of company electric distribution facilities. The company shall not be required to permit the use of company distribution facilities for the provision of utility service except as otherwise required by law.

Sec. 10.5 City use of company transmission rights-of-way.

The company shall offer to grant to the City use of transmission rights-of-way which it now, or in the future, owns in fee within the City for the purposes set forth in and pursuant to the provisions of the Park and Open Space Act of 1984, on terms comparable to those offered to other municipalities; provided, that the company shall not be required to make such an offer in any circumstance where such offer would constitute a safety hazard or interfere with the company’s use of the transmission right-of-way. City use of transmission rights-of-way may include use for trails, parks and open space. In order to exercise this right, the City must make specific written request to the company for any such use.

Sec. 10.6 Emergencies.

Upon written request, the company shall assist the City in developing an emergency management plan. In the case of any emergency or disaster, the company shall, upon oral request of the City, make available company facilities for emergency use during the emergency or the disaster period. Such use of company facilities shall be of a limited duration and will only be allowed if the use does not interfere with the company’s own use of company facilities.

Article 11. Undergrounding of Overhead Facilities

Sec. 11.1 Underground electrical lines in new areas.

The company shall, upon payment to the company of the charges provided in its tariffs or their equivalent, place all newly constructed electrical distribution lines in newly developed areas of the City underground in accordance with applicable laws, regulations and orders.

Sec. 11.2 Underground conversion at expense of company.

(a) Underground Fund. The company shall budget and allocate an annual amount, equivalent to one percent of the preceding year’s electric gross revenues (the “fund”), for the purpose of undergrounding existing overhead distribution facilities in the City, as may be requested by the City designee.

(b) Unexpended Portion and Advances. Any unexpended portion of the fund shall be carried over to succeeding years and, in addition, upon request by the City, the company agrees to advance and expend amounts anticipated to be available under the preceding paragraph for up to three years in advance. Any amounts so advanced shall be credited against amounts to be expended in succeeding years. Any funds left accumulated under any prior franchise shall be carried over to this franchise. The City shall have no vested interest in monies allocated to the fund and any monies in the fund not expended at the expiration or termination of this franchise shall remain the property of the company. At the expiration or termination of this franchise, the company shall not be required to underground any existing overhead facilities under this article, but may do so in its sole discretion.

(c) System-wide Undergrounding. If, during the term of this franchise, the company should receive authority from the PUC to undertake a system-wide program or programs of undergrounding its electric distribution facilities, the company will budget and allocate to the program of undergrounding in the City such amount as may be determined and approved by the PUC, but in no case shall such amount be less than the one percent of annual electric gross revenues provided above.

(d) City Requirement To Underground. In addition to the provisions of this article, the City may require any above ground company facilities to be moved underground at the City’s expense.

Sec. 11.3 Undergrounding performance.

Upon receipt of a written request from the City, the company shall, to the extent of monies available in the fund, and as otherwise provided herein, underground company facilities pursuant to the provisions of this article, in accordance with the procedures set forth in this section.

(a) Estimates. Promptly upon receipt of an undergrounding request from the City and the supporting documentation necessary for the company to design the undergrounding project, the company shall prepare a detailed, good faith cost estimate of the anticipated actual cost of the requested project for the City to review and, if acceptable to the City, the City will issue a project authorization. At the City’s request, the company will provide all documentation which forms the basis of the estimate. The company will not proceed with any requested project until the City has provided a written acceptance of the company estimate.

(b) Performance. The company shall complete each undergrounding project requested by the City within a reasonable time, not to exceed 240 days from the later of the date upon which the City designee makes a written request or the date the City provides to the company all supporting documentation. The company shall have 120 days after receiving the City’s written request to design project plans, prepare the good faith estimate, and transmit same to the City designee for review. If City approval of the plans and estimate has not been granted, the company’s good faith estimate will be void 60 days after delivery of the plans and estimate to the City designee. If the plans and estimate are approved by the City, the company shall have 120 days from the date of the City designee’s authorization of the underground project, plus any of the 120 unused days in preparing the good faith estimate to complete the project. At the company’s sole discretion, if the good faith estimate has expired because the City designee has not approved the same within 60 days, the company may extend the good faith estimate or prepare a new estimate using current prices. The company shall be entitled to an extension of time to complete each undergrounding project where the company’s performance was delayed due to a force majeure condition. Upon written request of the company, the City may also grant the company reasonable extensions of time for good cause shown and the City shall not unreasonably withhold any such extension.

(c) City Revision of Supporting Documentation. Any revision by the City of supporting documentation provided to the company that causes the company to substantially redesign and/or change its plans regarding an undergrounding project shall be deemed good cause for a reasonable extension of time to complete the undergrounding project under the franchise.

(d) Completion/Restoration. Each such undergrounding project shall be complete only when the company actually undergrounds the designated company facilities, restores the undergrounding site in accordance with Section 6.7 of this franchise, or as otherwise agreed with the City, and removes from the site or properly abandons on site any unused facilities, equipment, material and other impediments.

(e) Report of Actual Costs. Upon completion of each undergrounding project, the company shall submit to the City a detailed report of the company’s actual cost to complete the project and the company shall reconcile this total actual cost with the accepted cost estimate. The report shall be provided within 120 days after completion of the project and written request from the City.

(f) Audit of Underground Projects. The City may require that the company undertake an independent audit of up to two undergrounding projects in any calendar year. The cost of any such independent audit shall reduce the amount of the fund. The company shall cooperate fully with any audit and the independent auditor shall prepare and provide to the City and the company a final audit report showing the actual costs associated with completion of the project. If a project audit is required by the City, only those actual project costs confirmed and verified by the independent auditor as reasonable and necessary to complete the project shall be charged against the fund balance.

Sec. 11.4 Audit of underground fund.

Upon written request, every three years commencing at the end of the third year of this franchise, the company shall cause an independent auditor to investigate and determine the correctness of the charges to the underground fund. Such audits shall be limited to the previous three calendar years. The independent auditor shall provide a written report containing its findings to the City and the company. The company shall reconcile the fund consistent with the findings contained in the independent auditor’s written report. The company shall pay the costs of the audit and investigation.

Sec. 11.5 Cooperation with other utilities.

When undertaking an undergrounding project the City and the company shall coordinate with other utilities or companies that have their facilities above ground to attempt to have all facilities undergrounded as part of the same project. When other utilities or companies are placing their facilities underground, to the extent the company has received prior written notification, the company shall cooperate with these utilities and companies and undertake to underground company facilities as part of the same project where financially, technically and operationally feasible. The company shall not be required to pay for the cost of undergrounding the facilities of other companies or the City.

Sec. 11.6 Planning and coordination of undergrounding projects.

The City and the company shall mutually plan in advance the scheduling of undergrounding projects to be undertaken according to this article as a part of the review and planning for other City and company construction projects. The City and the company agree to meet, as required, to review the progress of the current undergrounding projects and to review planned future undergrounding projects. The purpose of such meetings shall be to further cooperation between the City and the company in order to achieve the orderly undergrounding of company facilities. Representatives of both the City and the company shall meet periodically to review the company’s undergrounding of company facilities and at such meetings shall review:

(a) Undergrounding, including conversions, public projects and replacements which have been accomplished or are underway, together with the company’s plans for additional undergrounding; and

(b) Public projects anticipated by the City.

Article 12. Purchase or Condemnation

Sec. 12.1 Municipal right to purchase or condemn.

(a) Right and Privilege of City. The right and privilege of the City to construct, purchase, or condemn any company facilities located within the territorial boundaries of the City, and the company’s rights in connection therewith, as set forth in applicable provisions of the constitution and statutes of the State of Colorado relating to the acquisition of public utilities, are expressly recognized. The City shall have the right, within the time frames and in accordance with the procedures set forth in such provisions, to purchase company facilities, land, rights-of-way and easements now owned or to be owned by the company located within the territorial boundaries of the City. In the event of any such purchase, no value shall be ascribed or given to the rights granted under this franchise in the valuation of the property thus taken.

(b) Notice of Intent to Purchase or Condemn. The City shall provide the company no less than one year’s prior written notice of its intent to purchase or condemn company facilities. Nothing in this section shall be deemed or construed to constitute consent by the company to the City’s purchase or condemnation of company facilities.

Article 13. Municipally-Produced Utility Service

Sec. 13.1 Municipally-produced utility service.

(a) City Reservation. The City expressly reserves the right to engage in the production of utility service to the extent permitted by law. The company agrees to negotiate in good faith long term contracts to purchase City-generated power made available for sale, consistent with PUC requirements. The company further agrees to offer transmission and delivery services to the City that are required by judicial, statutory and/or regulatory directive and that are comparable to the services offered to any other customer with similar generation facilities.

(b) Franchise Not to Limit City’s Rights. Nothing in this franchise prohibits the City from becoming an aggregator of utility service or from selling utility service to customers should it be permissible under law.

Article 14. Environment and Conservation

Sec. 14.1 Environmental leadership.

The City and the company agree that sustainable development, environmental excellence and innovation shall form the foundation of the utility service provided by the company under this franchise. The company agrees to continue to actively pursue reduction of carbon emissions attributable to its electric generation facilities with a rigorous combination of energy conservation and energy efficiency measures, clean energy measures, and promoting and implementing the use of renewable energy resources on both a distributed and centralized basis. The company shall continue to cost-effectively monitor its operations to mitigate environmental impacts; shall meet or exceed the requirements of environmental laws, regulations and permits; shall invest in cost-effective environmentally-sound technologies; shall consider environmental issues in its planning and decision-making; and shall support environmental research and development projects and partnerships in our communities through various means, including but not limited to corporate giving and employee involvement. The company shall continue to explore ways to reduce water consumption at its facilities and to use recycled water where feasible. The company shall continue to work with the U.S. Fish and Wildlife Service to develop and implement avian protection plans to reduce electrocution and collision risks by eagles, raptors and other migratory birds with transmission and distribution lines. On or before December 1st of each year, the company shall provide the City a written report describing its progress in carbon reduction and other environmental efforts, and the parties shall meet at a mutually convenient time and place for a discussion of such. In meeting its obligation under this section, the company is not precluded from providing existing internal and external reports that may be used for other reporting requirements.

Sec. 14.2 Conservation.

The City and the company recognize and agree that energy conservation programs offer opportunities for the efficient use of energy and possible reduction of energy costs. The City and the company further recognize that creative and effective energy conservation solutions are crucial to sustainable development. The company recognizes and shares the City’s stated objectives to advance the implementation of cost-effective energy efficiency and energy conservation programs that direct opportunities to residents to manage more efficiently their use of energy and thereby create the opportunity to reduce their energy bills. The company commits to offer programs that attempt to capture market opportunities for cost-effective energy efficiency improvements such as municipal specific programs that provide cash rebates for efficient lighting, energy design programs to assist architects and engineers to incorporate energy efficiency in new construction projects, and recommissioning programs to analyze existing systems to optimize performance and conserve energy according to current and future demand side management (“DSM”) programs. In doing so, the company recognizes the importance of (i) implementing cost-effective programs the benefits of which would otherwise be lost if not pursued in a timely fashion; and (ii) developing cost-effective programs for the various classes of the company’s customers, including low-income customers. The company shall advise the City and its residents of the availability of assistance that the company makes available for investments in energy conservation through newspaper advertisements, bill inserts and energy efficiency workshops and by maintaining information about these programs on the company’s website. Further, the company will designate a conservation representative to act as the primary liaison with the City who will provide the City with information on how the City may take advantage of reducing energy consumption in City facilities and how the City may participate in energy conservation and energy efficiency programs sponsored by the company. As such, the company and the City commit to work cooperatively and collaboratively to identify, develop, implement and support programs offering creative and sustainable opportunities to company customers and residents, including low-income customers and residents. The company agrees to help the City participate in company programs and when opportunities exist to partner with others, such as the State of Colorado, the company will help the City pursue those opportunities. In addition, and in order to assist the City and its residents’ participation in renewable energy resource programs, the company shall:

(a) Notify the City regarding all eligible renewable energy resource programs;

(b) Provide the City with technical support regarding how the City may participate in renewable energy resource programs; and

Notwithstanding the foregoing, to the extent that any company assistance is needed to support renewable energy resource programs that are solely for the benefit of company customers located within the City, the company retains the sole discretion as to whether to incur such costs.

Sec. 14.3 Continuing commitment.

It is the express intention of the City and the company that the collaborative effort provided for in this article continue for the entire term of this agreement. The City and the company also recognize, however, that the programs identified in this article may be for a limited duration and that the regulations and technologies associated with energy conservation are subject to change. Given this variability, the company agrees to maintain its commitment to sustainable development and energy conservation for the term of this agreement by continuing to provide leadership, support and assistance, in collaboration with the City, to identify, develop, implement and maintain new and creative programs similar to the programs identified in this agreement in order to help the City achieve its environmental goals.

Sec. 14.4 PUC approval.

Nothing in this article shall be deemed to require the company to invest in technologies or to incur costs that it has a good faith belief the PUC will not allow the company to recover through the ratemaking process.

Article 15. Transfer of Franchise

Sec. 15.1 Consent of city required.

The company shall not transfer or assign any rights under this franchise to an unaffiliated third party, except by merger with such third party, or, except when the transfer is made in response to legislation or regulatory requirements, unless the City approves such transfer or assignment in writing. Approval of the transfer or assignment shall not be unreasonably withheld.

Sec. 15.2 Transfer fee.

In order that the City may share in the value this franchise adds to the company’s operations, any transfer or assignment of rights granted under this franchise requiring City approval, as set forth herein, shall be subject to the condition that the company shall promptly pay to the City a transfer fee in an amount equal to the proportion of the City’s then-population provided utility service by the company to the then-population of the City of Grand Junction provided utility service by the company multiplied by $1,000,000. Except as otherwise required by law, such transfer fee shall not be recovered from a surcharge placed only on the rates of residents.

Article 16. Continuation of Utility Service

Sec. 16.1 Continuation of utility service.

In the event this franchise is not renewed at the expiration of its term or is terminated for any reason, and the City has not provided for alternative utility service, the company shall have no right to remove any company facilities or discontinue providing utility service unless otherwise ordered by the PUC, and shall continue to provide utility service within the City until the City arranges for utility service from another provider. The company further agrees that it will not withhold any temporary utility services necessary to protect the public. The City agrees that in the circumstances of this article, the company shall be entitled to monetary compensation as provided in the company’s tariffs on file with the Public Utilities Commission and the company shall be entitled to collect from residents and shall be obligated to pay the City, at the same times and in the same manner as provided in the franchise, an aggregate amount equal to the amount which the company would have paid as a franchise fee as consideration for use of the City’s streets. Only upon receipt of written notice from the City stating that the City has adequate alternative utility service for residents and upon order of the PUC shall the company be allowed to discontinue the provision of utility service to the City and its residents.

Article 17. Indemnification and Immunity

Sec. 17.1 City held harmless.

The company shall indemnify, defend and hold the City harmless from and against claims, demands, liens and all liability or damage of whatsoever kind on account of or arising from the grant of this franchise, the exercise by the company of the related rights, or from the operations of the company within the City, and shall pay the costs of defense plus reasonable attorneys’ fees. The City shall (a) give prompt written notice to the company of any claim, demand or lien with respect to which the City seeks indemnification hereunder and (b) unless in the City’s judgment a conflict of interest may exist between the City and the company with respect to such claim, demand or lien, shall permit the company to assume the defense of such claim, demand, or lien with counsel satisfactory to the City. If such defense is assumed by the company, the company shall not be subject to liability for any settlement made without its consent. If such defense is not assumed by the company or if the City determines that a conflict of interest exists, the parties reserve all rights to seek all remedies available in this franchise against each other. Notwithstanding any provision hereof to the contrary, the company shall not be obligated to indemnify, defend or hold the City harmless to the extent any claim, demand or lien arises out of or in connection with any negligent or intentional act or failure to act of the City or any of its officers or employees.

Sec. 17.2 Immunity.

Nothing in this section or any other provision of this agreement shall be construed as a waiver of the notice requirements, defenses, immunities and limitations the City may have under the Colorado Governmental Immunity Act (§ 24-10-101, C.R.S., et seq.) or of any other defenses, immunities, or limitations of liability available to the City by law.

Article 18. Breach

Sec. 18.1 Non-contestability.

The City and the company agree to take all reasonable and necessary actions to assure that the terms of this franchise are performed. The company reserves the right to seek a change in its tariffs, including but not limited to the rates, charges, terms, and conditions of providing utility service to the City and its residents, and the City retains all rights that it may have to intervene and participate in any such proceedings.

Sec. 18.2 Breach.

(a) Notice/Cure/Remedies. Except as otherwise provided in this franchise, if a party (the “breaching party”) to this franchise fails or refuses to perform any of the terms or conditions of this franchise (a “breach”), the other party (the “non-breaching party”) may provide written notice to the breaching party of such breach. Upon receipt of such notice, the breaching party shall be given a reasonable time, not to exceed 30 days, in which to remedy the breach. If the breaching party does not remedy the breach within the time allowed in the notice, the non-breaching party may exercise the following remedies for such breach:

(1) Specific performance of the applicable term or condition; and

(2) Recovery of actual damages from the date of such breach incurred by the non-breaching party in connection with the breach, but excluding any consequential damages.

(b) Termination of Franchise by City. In addition to the foregoing remedies, if the company fails or refuses to perform any material term or condition of this franchise (a “material breach”), the City may provide written notice to the company of such material breach. Upon receipt of such notice, the company shall be given a reasonable time, not to exceed 90 days, in which to remedy the material breach. If the company does not remedy the material breach within the time allowed in the notice, the City may, at its sole option, terminate this franchise. This remedy shall be in addition to the City’s right to exercise any of the remedies provided for elsewhere in this franchise. Upon such termination, the company shall continue to provide utility service to the City and its residents until the City makes alternative arrangements for such service and until otherwise ordered by the PUC and the company shall be entitled to collect from residents and shall be obligated to pay the City, at the same times and in the same manner as provided in the franchise, an aggregate amount equal to the amount which the company would have paid as a franchise fee as consideration for use of the City streets.

(d) No Limitation. Except as provided herein, nothing in this franchise shall limit or restrict any legal rights or remedies that either party may possess arising from any alleged breach of this franchise.

Article 19. Amendments

Sec. 19.1 Proposed amendments.

At any time during the term of this franchise, the City or the company may propose amendments to this franchise by giving 30 days’ written notice to the other of the proposed amendment(s) desired, and both parties thereafter, through their designated representatives, will, within a reasonable time, negotiate in good faith in an effort to agree upon mutually satisfactory amendment(s). However, nothing contained in this section shall be deemed to require either party to consent to any amendment proposed by the other party.

Sec. 19.2 Effective amendments.

No alterations, amendments or modifications to this franchise shall be valid unless executed by an instrument in writing by the parties, adopted with the same formality used in adopting this franchise, to the extent required by law. Neither this franchise, nor any term hereof, may be changed, modified or abandoned, in whole or in part, except by an instrument in writing, and no subsequent oral agreement shall have any validity whatsoever.

Article 20. Equal Opportunity

Sec. 20.1 Economic development.

The company is committed to the principle of stimulating, cultivating and strengthening the participation and representation of persons of color, women and members of other underrepresented groups within the company and in the local business community. The company believes that increased participation and representation of underrepresented groups will lead to mutual and sustainable benefits for the local economy. The company is also committed to the principle that the success and economic well-being of the company is closely tied to the economic strength and vitality of the diverse communities and people it serves. The company believes that contributing to the development of a viable and sustainable economic base among all company customers is in the best interests of the company and its shareholders.

Sec. 20.2 Employment.

(a) The company is committed to undertaking programs that identify, consider and develop persons of color, women and members of other under-represented groups for positions at all skill and management levels within the company.

(b) The company recognizes that the City and the business community in the City, including women and minority owned businesses, provide a valuable resource in assisting the company to develop programs to promote persons of color, women and members of underrepresented communities into management positions, and agrees to keep the City regularly advised of the company’s progress by providing the City a copy of the company’s annual affirmative action report upon the City’s written request.

(c) In order to enhance the diversity of the employees of the company, the company is committed to recruiting diverse employees by strategies such as partnering with colleges, universities and technical schools with diverse student populations, utilizing diversity specific media to advertise employment opportunities, internships, and engaging recruiting firms with diversity specific expertise.

(d) The company is committed to developing a world-class workforce through the advancement of its employees, including persons of color, women and members of underrepresented groups. In order to enhance opportunities for advancement, the company will offer training and development opportunities for its employees. Such programs may include mentoring programs, training programs, classroom training, and leadership programs.

(e) The company is committed to a workplace free of discrimination based on race, color, religion, national origin, gender, age, military status, sexual orientation, marital status, or physical or mental disability or any other protected status in accordance with all federal, state or local laws. The company shall not, solely because of race, creed, color, religion, sex, age, national origin or ancestry or handicap, refuse to hire, discharge, promote, demote or discriminate in matters of compensation, against any person otherwise qualified, and further agrees to insert the foregoing provision or its equivalent in all agreements the company enters into in connection with this franchise.

(f) The company shall identify and consider women, persons of color and other underrepresented groups to recommend for its Board of Directors, consistent with the responsibility of boards to represent the interests of the shareholders, customers and employees of the company.

Sec. 20.3 Contracting.

(a) It is the company’s policy to make available to minority and women owned business enterprises and other small and/or disadvantaged business enterprises the maximum practical opportunity to compete with other service providers, contractors, vendors and suppliers in the marketplace. The company is committed to increasing the proportion of company contracts awarded to minority and women owned business enterprises and other small and/or disadvantaged business enterprises for services, construction, equipment and supplies to the maximum extent consistent with the efficient and economical operation of the company.

(b) The company agrees to maintain and continuously develop contracting and community outreach programs calculated to enhance opportunity and increase the participation of minority and women owned business enterprises and other small and/or disadvantaged business enterprises to encourage economic vitality. The company agrees to keep the City regularly advised of the company’s programs.

(c) The company shall maintain and support partnerships with local chambers of commerce and business organizations, including those representing predominately minority owned, women owned and disadvantaged businesses, to preserve and strengthen open communication channels and enhance opportunities for minority owned, women owned and disadvantaged businesses to contract with the company.

Sec. 20.4 Coordination.

City agencies provide collaborative leadership and mutual opportunities or programs relating to City based initiatives on economic development, employment and contracting opportunity. The company agrees to review company programs and mutual opportunities responsive to this article with these agencies, upon their request, and to collaborate on best practices regarding such programs and coordinate and cooperate with the agencies in program implementation.

Article 21. Miscellaneous

Sec. 21.1 No waiver.

Neither the City nor the company shall be excused from complying with any of the terms and conditions of this franchise by any failure of the other, or any of its officers, employees, or agents, upon any one or more occasions, to insist upon or to seek compliance with any such terms and conditions.

Sec. 21.2 Successors and assigns.

The rights, privileges, and obligations, in whole or in part, granted and contained in this franchise shall inure to the benefit of and be binding upon the company, its successors and assigns, to the extent that such successors or assigns have succeeded to or been assigned the rights of the company pursuant to Article 15 of this franchise.

Sec. 21.3 Third parties.

Nothing contained in this franchise shall be construed to provide rights to third parties.

Sec. 21.4 Notice.

Both parties shall designate from time to time in writing representatives for the company and the City who will be the persons to whom notices shall be sent regarding any action to be taken under this franchise. Notice shall be in writing and forwarded by certified mail or hand delivery to the persons and addresses as hereinafter stated, unless the persons and addresses are changed at the written request of either party, delivered in person or by certified mail. Until any such change shall hereafter be made, notices shall be sent as follows:


To the City:
	Mayor of Grand Junction
	City of Grand Junction
	250 North 5th Street
	Grand Junction, CO 81501

	and

	City Manager
	City of Grand Junction
	250 North 5th Street
	Grand Junction, CO 81501

With a copy to:
	City Attorney
	City of Grand Junction
	250 North 5th Street
	Grand Junction, CO 81501


To the Company:
	Regional Vice President, Customer and Community Services
	Public Service Company of Colorado
	P.O. Box 840
	Denver, Colorado 80201

With a copy to:
	Legal Department
	Public Service Company of Colorado
	P.O. Box 840
	Denver, Colorado 80201

Sec. 21.5 Examination of records.

The parties agree that any duly authorized representative of the City and the company shall have access to and the right to examine any directly pertinent nonconfidential books, documents, papers, and records of the other party involving any activities related to this franchise. All such records must be kept for a minimum of four years. To the extent that either party believes in good faith that it is necessary in order to monitor compliance with the terms of this franchise to examine confidential books, documents, papers, and records of the other party, the parties agree to meet and discuss providing confidential materials, including but not limited to providing such materials subject to a reasonable confidentiality agreement which effectively protects the confidentiality of such materials and complies with PUC rules and regulations.

Sec. 21.6 List of utility property.

The company shall provide the City, upon request not more than every two years, a list of utility related property owned or leased by the company within the City. All such records must be kept for a minimum of four years.

Sec. 21.7 PUC filings.

Upon written request, the company shall provide the City non-confidential copies of all applications, advice letters and periodic reports, together with any accompanying non-confidential testimony and exhibits, filed by the company with the Colorado Public Utilities Commission.

Sec. 21.8 Information.

Upon written request, the company shall provide the City Manager or the City Manager’s designee with:

(a) A copy of the company’s or its parent company’s consolidated annual financial report, or alternatively, a URL link to a location where the same information is available on the company’s web site;

(b) Maps or schematics in electronic format indicating the location of specific company facilities, including gas or electric lines, located within the City, to the extent those maps or schematics are in existence at the time of the request and related to an ongoing project within the City; and

(c) A copy of any report required to be prepared for a federal or State agency detailing the company’s efforts to comply with federal and State air and water pollution laws.

Sec. 21.9 Payment of taxes and fees.

(a) The company shall pay and discharge as they become due, promptly and before delinquency, all taxes, assessments, rates, charges, license fees, municipal liens, levies, excises, or imposts, whether general or special, or ordinary or extraordinary, of every name, nature, and kind whatsoever, including all governmental charges of whatsoever name, nature, or kind, which may be levied, assessed, charged, or imposed, or which may become a lien or charge against this agreement (“impositions”); provided, that company shall have the right to contest any such impositions and shall not be in breach of this section so long as it is actively contesting such impositions.

(b) The City shall not be liable for the payment of taxes, late charges, interest or penalties of any nature other than pursuant to applicable tariffs on file and in effect from time to time with the PUC.

Sec. 21.10 Conflict of interest.

The parties agree that no official, officer or employee of the City shall have any personal or beneficial interest whatsoever in the services or property described herein and the company further agrees not to hire or contract for services any official, officer or employee of the City to the extent prohibited by law, including ordinances and regulations of the City.

Sec. 21.11 Certificate of public convenience and necessity.

The City agrees to support the company’s application to the PUC to obtain a certificate of public convenience and necessity to exercise its rights and obligations under this franchise.

Sec. 21.12 Authority.

Each party represents and warrants that except as set forth below, it has taken all actions that are necessary or that are required by its ordinances, regulations, procedures, bylaws, or applicable law, to legally authorize the undersigned signatories to execute this agreement on behalf of the parties and to bind the parties to its terms. The persons executing this agreement on behalf of each of the parties warrant that they have full authorization to execute this agreement. The City acknowledges that notwithstanding the foregoing, the company requires a certificate of public convenience and necessity from the PUC in order to operate under the terms of this franchise.

Sec. 21.13 Severability.

Should any one or more provisions of this franchise be determined to be unconstitutional, illegal, unenforceable or otherwise void, all other provisions nevertheless shall remain effective; provided, however, to the extent allowed by law, the parties shall forthwith enter into good faith negotiations and proceed with due diligence to draft one or more substitute provisions that will achieve the original intent of the parties hereunder.

Sec. 21.14 Force majeure.

Neither the City nor the company shall be in breach of this franchise if a failure to perform any of the duties under this franchise is due to force majeure, as defined herein.

Sec. 21.15 Earlier franchises superseded.

This franchise shall constitute the only franchise between the City and the company for the furnishing of utility service, and it supersedes and cancels all former franchises between the parties hereto.

Sec. 21.16 Titles not controlling.

Titles of the paragraphs herein are for reference only, and shall not be used to construe the language of this franchise.

Sec. 21.17 Applicable law.

Colorado law shall apply to the construction and enforcement of this franchise. The parties agree that venue for any litigation arising out of this franchise shall be in the District Court for Mesa County, State of Colorado.

I hereby certify that the foregoing People’s Ordinance No. 37 was introduced, read and ordered published by the City Council of the City of Grand Junction, Colorado, at a regular meeting of said body held on the 29th day of November, 2010 and that the same was published in The Grand Junction Daily Sentinel on December 1, 8, 15, 22, 29, 2010 and January 5, 2011 and that People’s Ordinance No. 37 is to be submitted to the registered electors of said City for their acceptance or rejection at the municipal election to be held April 5, 2011.


/s/ Stephanie Tuin
Stephanie Tuin, City Clerk

ACCEPTANCE BY PUBLIC SERVICE COMPANY OF COLORADO OF A GAS AND ELECTRIC FRANCHISE GRANTED BY THE CITY OF GRAND JUNCTION, MESA COUNTY, COLORADO, BY PEOPLE’S ORDINANCE NO. 37

Whereas, Public Service Company of Colorado and the City of Grand Junction, have negotiated the terms and conditions of a new gas and electric franchise between said company and the City of Grand Junction, which franchise is as set forth in People’s Ordinance No. 37 of the City of Grand Junction, adopted by the City, and entitled in part: “An ordinance granting a franchise by the City of Grand Junction to Public Service Company of Colorado, d/b/a Xcel Energy, its successors and assigns, the right to furnish, sell and distribute gas and electricity to the City and to all persons, businesses, and industry within the City and the right to acquire, construct, install, locate, maintain, operate and extend into, within and through said City all facilities reasonably necessary to furnish, sell and distribute gas and electricity within the City and the right to make reasonable use of all streets and other public places and public easements as herein defined as may be necessary; and fixing the terms and conditions.”

Now, therefore, in consideration of the premises and in pursuance of the provisions of said People’s Ordinance No. 37 of the City of Grand Junction, Public Service Company of Colorado does hereby accept the terms and conditions contained in said ordinance as the franchise agreement between Public Service Company of Colorado and the City of Grand Junction, Mesa County, Colorado.

In witness whereof, Public Service Company of Colorado has caused its corporate name to be hereunto subscribed by its Vice President, and its corporate seal to be hereunto affixed, attested by its Assistant Secretary, as of the _____ day of _______________, 2011.


	PUBLIC SERVICE COMPANY OF COLORADO

		by: __________________________
ATTEST:		Vice President

__________________________
Assistant Secretary

I hereby certify that the foregoing People’s Ordinance No. 37 was submitted to a vote of the registered electors for their adoption or rejection at municipal election held in the City of Grand Junction on the 5th day of April 2011, at which election a majority of the votes were cast in favor of the acceptance of People’s Ordinance No. 37.

In witness whereof, I have hereunto set my hand and affixed the Seal of said City this 15th day of April 2011.


/s/ Stephanie Tuin
Stephanie Tuin, City Clerk


PUBLIC SERVICE COMPANY OF COLORADO
By:_________________________________
Jerome Davis
Regional Vice President
Customer and Community Relations

Attest: ______________________________
Asst. Secretary