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HomeMy WebLinkAboutOrdinance - 2025-O0005 - SPS DBA Excel Energy, Right To Conduct Business Franchise Agreement - 01/28/2025First Reading January 14, 2025 Item No. 5.5 FRANCHISE AGREEMENT Second Reading January 28, 2025 Item No. 6.6 2025- ORDINANCE NO. 00005 AN ORDINANCE GRANTING TO SOUTHWESTERN PUBLIC SERVICE COMPANY ("SPS") D/B/A XCEL ENERGY THE RIGHT, PRIVILEGE AND FRANCHISE TO CONDUCT WITHIN THE CITY OF LUBBOCK, TEXAS ("CITY"), AN ELECTRICAL LIGHTING AND POWER BUSINESS AND TO ENTER UPON, ERECT, CONSTRUCT, MAINTAIN, EXTEND, REPAIR, REPLACE AND REMOVE IN, UNDER, UPON, WITHIN, OVER, ABOVE, ACROSS AND ALONG ANY AND ALL OF THE PRESENT AND FUTURE PUBLIC ROADS, HIGHWAYS, STREETS, LANES, AND ALLEYS OF THE CITY OF LUBBOCK, A SYSTEM OF POLES, POLE LINES, TOWERS, DISTRIBUTION LINES, TRANSMISSION LINES, WIRES, GUYS, CABLES, CONDUITS, TRANSFORMERS, AND OTHER DISTRIBUTION AND TRANSMISSION EQUIPMENT, FACILITIES AND APPURTENANCES NECESSARY OR PROPER FOR THE TRANSMISSION AND DISTRIBUTION OF ELECTRICITY INTO, IN, WITHIN, FROM, ACROSS, AND THROUGH THE CITY OF LUBBOCK, AS NOW EXISTING, OR AS SAID CITY LIMITS MAY HEREAFTER BE EXTENDED; AND GRANTING SPS, ITS SUCCESSORS AND ASSIGNS, THE AUTHORITY TO USE SUCH FOR THE PURPOSE OF TRANSMISSION, DISTRIBUTION, DELIVERY AND SALE OF ELECTRICITY TO THE CITY, AND TO THE INHABITANTS OF THE CITY, OR ANY OTHER PERSON OR PERSONS, FIRMS OR CORPORATIONS, WHEREVER LOCATED WITHIN OR WITHOUT THE CITY LIMITS OF LUBBOCK, FOR USE BY SUCH PURCHASER OR PURCHASERS FOR ANY PURPOSE AUTHORIZED BY LAW FOR WHICH ELECTRICITY MAY BE USED OR FOR ANY OTHER PURPOSE OR USE WHICH IS OR MAY BECOME NORMAL OR CUSTOMARY IN THE RETAIL ELECTRIC INDUSTRY IN TEXAS; PROVIDING THAT THIS FRANCHISE SHALL BE EFFECTIVE FOR A PERIOD OF TWENTY (20) YEARS COMMENCING UPON AND EXTENDING FROM THE EFFECTIVE DATE OF THIS ORDINANCE AFTER FINAL PASSAGE HEREOF; PROVIDING FOR THE TEMPORARY REMOVAL, RAISING OR LOWERING BY SPS OF ITS WIRES AND OTHER APPURTENANCES; PROVIDING FOR THE RIGHT TO, AND CONDITION OF, THE OPENING OF PAVEMENTS AND SIDEWALKS BY SPS; RETAINING ALL RIGHTS OF CITY TO REGULATE THE LOCATION OF SPS'S FACILITIES IN, UPON, ALONG, UNDER AND OVER THE STREETS, ALLEYS AND OTHER PUBLIC PLACES OF CITY, AS WELL AS TO REQUIRE THE RELOCATION OF SAME; PROVIDING FOR EFFICIENT ELECTRICAL SERVICE AND THE MAINTAINING OF SPS'S FACILITIES; PROVIDING COMPENSATION, AND METHOD OF PAYMENT OF SUCH, TO THE CITY FOR THE USE BY SPS OF THE STREETS, ALLEYS AND PUBLIC WAYS OF THE CITY PROVIDING FOR THE MAINTAINING OF RECORDS BY SPS WITH RIGHT OF INSPECTION BY CITY RESERVING TO CITY ALL POWERS OF REGULATION; PROHIBITING ASSIGNMENT EXCEPT BY CONSENT BY CITY EXCEPT IN CERTAIN CASES; GIVING CITY'S CONSENT TO THE CUTTING AND TRIMMING BY SPS OF CONFLICTING TREES; PROVIDING A SEVERABILITY CLAUSE; PROVIDING THAT THIS FRANCHISE SHALL NOT BE EXCLUSIVE; MAKING MISCELLANEOUS PROVISIONS RELATIVE TO THIS GRANT OF FRANCHISE; REPEALING ALL PREVIOUS ELECTRICAL LIGHTING AND POWER FRANCHISE ORDINANCES AND RELATED RELEASE; PROVIDING FOR THE PUBLICATION OF THIS FRANCHISE ORDINANCE AND ITS ACCEPTANCE BY SPS. WHEREAS, the City granted to Southwestern Public Service Company ("SPS") a franchise to operate and maintain an electric system in the City via Ordinance No. 2003-00110, finally passed by the City Council on October 10, 2023. WHEREAS, the electrical lighting and power franchise previously granted by the City Council of the City expires on October 10, 2023, and it appearing to this Council that the renewal of the franchise is expedient and wise, and will be of benefit to both SPS and the City; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS: I. Franchise Authorization That subject to the terms, conditions, and provisions of this ordinance, the City of Lubbock, Texas, hereinafter referred to as "City", does hereby grant unto Southwestern Public Service Company, a corporation incorporated under the laws of the State of New Mexico, having a permit to do business in the State of Texas, hereinafter referred to as "SPS", its successors and assigns, the right, privilege and franchise to conduct an electrical lighting and power business within the boundaries of the City, as such boundaries now exist or may hereafter be extended. SPS shall have the right to enter upon, erect, construct, maintain, extend, repair, replace, and remove in, under, upon, within, over, above, across, and along any and all of the present and future public roads, highways, streets, lanes, alleys and other public rights -of -way of the City now or hereafter owned or controlled by the City a system of poles, pole lines, towers, distribution lines, transmission lines, underground and above ground lines, wires, guys, cables, conduits, transformers, and other distribution and transmission equipment, facilities and appurtenances necessary, proper or reasonably needed for the transmission and distribution of Page 2 of 16 electricity into, in, within, from, across and through the City as now existing or as the said City limits may hereafter be extended to the extent City is authorized to grant such right. SPS is authorized to use said poles, lines, towers, wires, guys, conduits, transformers, and other distribution and transmission equipment, facilities and appurtenances for the transmission, distribution, delivery and sale of electricity to the City and to the inhabitants of the City or any other person or persons, firms or corporations wherever located for use by such purchaser or purchasers for any purpose authorized by law for which electricity may be used or for any other purpose or use which is or may become normal or customary in the retail electric industry in Texas. II. Term. The term of this franchise granted to SPS shall be for twenty (20) years from the date the franchise becomes effective as outlined below. The franchise rights and privileges shall be in full force and effect January 28, 2025 or thirty (30) days from the last publication of this Ordinance, whichever occurs later, provided SPS has formally accepted this franchise as provided in Section XX. III. Franchise Fee/Payment. As compensation and rental for the use of the streets, alleys and public ways of City in the conduct of its business under this franchise, SPS shall pay the City each year of the life of this franchise, beginning February 1, 2025, a sum of money equal to five percent (5%) of the annual gross receipts of SPS from its retail electric lighting and power sales for consumption within the corporate limits of the City. All amounts payable to the City under this section shall be surcharged to SPS's customers taking electric service within the corporate limits of the City. The franchise payments shall be due and payable monthly with the first payment to be due and payable on January 15, 2024. Each subsequent payment shall be due on the 15`h day of each Page 3 of 16 month thereafter for the remaining life of this franchise. Each payment shall be based on the gross receipts of SPS during the preceding calendar month. Said monthly payments above provided shall be exclusive of and in addition to ad valorem taxes. All money due and payable to City by SPS computed under the terms of the previous franchise shall be payable to the time that computation begins under this franchise. Any and all such payments made by SPS pursuant to this Section shall be credited on any amount imposed, levied, or assessed against SPS by the City, pursuant to ordinance or otherwise, at any time as a charge (whether designated as rental, tax, or otherwise) for the use by SPS of the City's streets, alleys, and public rights -of -way. The term "Gross Receipts" as herein used, shall include all receipts from the sale of electric energy in SPS's certificated territory in the corporate limits of Lubbock, Texas. The term "gross receipts" shall also include all fees, commissions, collections, rents, royalties, and any income associated directly or indirectly with the sale electric lighting and power within the corporate limits of Lubbock, Texas. Notwithstanding the general definition above, "gross receipts" shall not include revenues collected for franchise fees or sales taxes, and does not include bad debt from gross receipts billed but not paid and collected. Any revenue subsequently received by SPS that was previously determined to be bad debt by SPS shall be subject to the franchise fee. SPS's wholesale sale of electric lighting and power to the City's municipally owned electric utility are not covered by this Franchise Agreement and are not included in "Gross Receipts." It is further understood and agreed to by SPS that the franchise fee authorized herein shall form the basis for which any franchise fee is authorized and calculated according to state law. All franchise fees that SPS fails to pay within the time period specified in this shall bear interest according to the following formula: for the period January 1 through June 30, the prime rate last published in the Wall Street Journal in the preceding December plus two Page 4 of 16 percent (2%); and for the period from July 1 through December 31, the prime rate last published in the Wall Street Journal in the preceding June plus two percent (2%). IV. Pole Location. Within the streets or other public rights -of -way of the City, the location and route of all poles, stubs, guys, anchors, lines, conduits, underground duct lines, manholes, and cables placed and constructed and to be placed and constructed by SPS in the construction and maintenance of its electrical lighting and power system in, within, through, or under the streets, alleys, or other public rights -of -way of the City shall be subject to reasonable and proper regulation, control, and direction of the City, or of the City official to whom such duties have been or may be delegated. All poles, guys, or anchors erected by SPS shall be so set that they will not cause diversion of surface waters in any gutter or drain so as to cause damage to adjoining property, and so that the same will interfere as little as practicable with the ordinary travel on the streets, sidewalks and other public rights -of -way of the City; the regulation and control herein reserved shall include, without limitation, the right of the City to require SPS, at SPS's expense, to relocate its poles, lines, or conduits so as to permit the following activities undertaken by the City on its behalf: a. The widening or straightening of any street, alley or public right-of-way located within the City. b. The closing, opening or relocation of any street, alley or public right-of-way within the City. C. The location or relocation of any water or sewer lines within the City. d. The changing of grade of any street, alley, curb, or sidewalk within the City. e. The construction and maintenance of parks and other public improvements owned by the City located within the City. In all cases where SPS is required to relocate, change the route of, or the position of the poles, lines, or the conduits, as a result of a request by the City, the City shall provide ninety (90) days advance written notice to SPS specifying the new location, route, or position of the poles, lines, or conduits involved. SPS shall be entitled to be paid for its cost and expenses of Page 5of16 relocation, raising, or lowering of its wires, required by the City, pursuant to this Section or Section V, only if such expenses or costs are reimbursable or payable to SPS or the City by the State of Texas, the United States, or any governmental agency or subdivision of either, whether directly or indirectly. However, nothing herein shall impose any obligation on the City to pay such costs and expenses except to the extent it actually receives funds from the United States, the State of Texas, or any governmental agency or subdivision of either, for the reimbursement of payment of same. The provisions of this section shall not apply to improvements made by SPS on private easements purchased by SPS and recorded prior to any dedication of any street, alley or public way. In this latter event, SPS shall be reimbursed its costs and expenses of relocating facilities. V. Temporary Relocation. SPS, on written reasonable request of any responsible person, firm, corporation, of governmental authority, shall relocate, raise or lower its wires, where located on, in, or over the streets, alleys and other public ways of City, temporarily to permit construction work in the vicinity thereof, or to permit the moving of houses, or other bulky structures. The expense of such temporary relocation, raising or lowering of such wires shall be paid by the benefited party or parties, and SPS may require the payment in advance, being without obligation to remove, raise, or lower its wires until such payment shall be made; provided, however, that no such payment shall be required of the City except as provided in Section IV. SPS shall be given prior written notice to arrange for such temporary wire relocations. The time period and manner for providing prior written notice shall be as specified in SPS's tariff(s) governing temporary raising or lowering of lines, as may be amended from time to time, currently Rules Tariff Sheet No. V- Page 6 of 16 32. Currently, Rules Tariff Sheet No. V-32 requires at least seven (7) days prior written notice. In the event of an emergency, such notice period may be shortened to seventy-two hours. VI. Excavation of Sidewalks. If it becomes necessary in furnishing electricity as contemplated under this franchise, the City grants to SPS the right and privilege to take up pavements and sidewalks, if any, in and upon said streets, alleys, and highways in the City for the purpose of making such excavation and installation as may be necessary; provided, however, that SPS shall not take up or excavate any pavement at any time without first securing the written permission of the City Manager or their designated representative, which permission will not be unreasonably withheld; and provided further, that all excavations and installations so made shall be performed in a reasonable manner as will cause the least inconvenience to the public, and SPS shall promptly restore, or cause to be restored to as good condition as before working thereon all such pavements, sidewalks, streets, alleys, or highways excavated by it to the reasonable satisfaction of the City Manager or their designated representative. VII. Facilities Damage. If any facilities of the City shall be in any respect damaged or injured by SPS or any of its officers, agents, or employees in connection with the negligent performance of work done under this Franchise Agreement upon the streets, avenues, alleys, or other public places of the City of Lubbock, then SPS shall pay for such damage. Conversely, if any of the facilities installed by SPS hereunder shall be in any respect damaged or injured by the City or any of its officers, agents, representatives, or employees, in connection with the performance of any work or repairs that may be done upon the streets, avenues, alleys, and other public places of the City of Lubbock, but not including work or repair for or related to the City's municipally owned electric utility, SPS shall not be entitled to prosecute or maintain a claim against the City of Lubbock for Page 7 of 16 such damage or injury so sustained by it, except where such damages are the result of willful or gross negligence of the officers, agents, representatives or employees of City, and said is hereby waived. VIII. City's Sovereignty. The City, by the granting of this franchise, does not surrender or to any extent lose, waive, il, or lessen the lawful powers and rights now or hereinafter vested in the City under the and Statutes of the State of Texas and under the Charter of the City to regulate the for services of SPS; and SPS, by its acceptance of this franchise, agrees that all such lawful power and rights as the same may be from time to time vested in the City shall be in force and effect and subject to the exercise thereof by the City at the City's discretion. Notwithstanding anything contained in this ordinance to the contrary, all work done in ion with the construction, repair, maintenance, and operation of all facilities of SPS is bject to the continuing police power of the City; and SPS shall comply with all present and laws, ordinances, and regulations, except when such compliance is in conflict with that authority specifically surrendered by the City herein. IX. Electric Service Provided. It shall be SPS's obligation hereunder to furnish efficient electrical service to meet standards of the industry for the area. SPS shall serve every eligible consumer in the franchise area that requests service, subject to lawful policies and rules or SPS regarding cost, customer deposits, return on investment, access and other reasonable factors. SPS shall not discriminate against any person, corporation, firm, or association in the charge for such electrical current or in the service rendered under like circumstances. SPS shall not directly or indirectly grant any discount or rebate, or give things of value to circumvent the rate schedule as approved by the Page 8 of 16 appropriate regulatory authority. In order to meet competition, nothing herein shall prevent SPS from doing anything that is lawfully done by the City's municipally owned electric utility. X. Nonexclusive. Nothing contained in this Ordinance shall be construed as conferring upon SPS any exclusive rights or privileges of any nature whatsoever. XI. Annual Receipts Report/Right to Audit. SPS shall on the 1st day of February of each year of the life of this franchise, file or cause to be filed, a statement, certified by a duly qualified officer of SPS, showing the gross receipts SPS within the City of Lubbock (as defined above) during the twelve months ending on the 3 1 " day of December immediately preceding. For the purpose of determining the amount of the gross j receipts of SPS, SPS shall keep in its office at the disposal of and open to inspection by any auditor authorized and appointed by City at all reasonable times, books of accounts and other) records showing a full, true, complete and accurate account of the gross receipts of SPS from its) electric lighting and power sales for consumption within the corporate limits of the City for the) prior three calendar years. XII. Indemnification. SPS shall indemnify and save the City harmless from all claims, demands, or causes action brought against the City occasioned by or arising out of the construction, reco maintenance, or repair of SPS's electrical lighting and power system, or in any way growing i of the granting of this franchise either directly or indirectly; provided, however, that provisions of this Section shall not be applicable to any claims, damages, actions, or causes actions proximately resulting from the City, its officers, agents, representatives, or employe for which the City is otherwise liable as provided herein. XIII. Authority. Page 9 of 16 In granting this franchise it is understood that the lawful power vested by law in the City to require all persons or corporations to discharge the duties and undertaking for the performance of which this franchise was made, is reserved; this grant is made subject to all the rights, powers, and authorities either of regulation or otherwise reserved to the City by its Charter or by the general laws of the State. XIV. Assignment/Transfer of Franchise. The rights, franchises and privileges hereby granted shall not be transferred or assigned by SPS except with the consent of the City Council of the City of Lubbock expressed by Ordinance passed by said City Council; provided, however, SPS may mortgage or pledge its rights hereunder for security or obligations owing by SPS; and provided further, that a transfer could be made in a merger, consolidation, or re -organization proceeding to which SPS is a party or to a subsidiary corporation or affiliate corporation of SPS or wherein SPS sells its entire physical assets. It is specifically recognized that under the Public Utility Regulatory Act, Chapter 39, Restructuring of Electric Utility Industry, it is anticipated that at some date in the future SPS will unbundle into a power generation company, a retail electric provider, and a transmission and distribution utility. At the time of such unbundling to comply with retail electric deregulation, the franchise granted herein will go with the distribution utility and the franchise fee thereafter will be calculated as provided in Section III of this franchise. In the event of contemplated transfer of this franchise, under the terms of this section permitting transfer without consent of City Council, SPS shall notify the City of the contemplated transfer by written notice delivered to the City Secretary not less than sixty (60) days prior to accomplishment of any merger, consolidation, or re -organization proceeding or transfer of its entire physical assets; and will provide the City Council an opportunity to confer with the proposed transferee concerning proper acceptance of the terms of this franchise. Page 10 of 16 Prior to exercising any rights hereunder, any purchaser or transferee of SPS shall file with the City Manager or their designated representative a written acceptance of this franchise setting forth an agreement to be bound by all terms and provisions hereof. XV. Tree Trimming To the extent that the City has authority to do so, it gives to SPS, during the life of this franchise, the right, license, privilege, and permission to trim trees upon and overhanging the streets, alleys, sidewalks, and public places of the City, so as to prevent the branches of such trees from coming in contact with the wires or other equipment of SPS. SPS agrees that it will fully protect and indemnify the City from any and all claims, demands, actions, causes of actions, damages, and expenses arising because of such trimming by SPS under the provisions of this Section. XVI. Notice of Default. The franchise rights and privileges hereinabove granted to SPS, its successors and assigns are and shall be at all times, during the term and life of this franchise, contingent upon the faithful and punctual performance of and compliance with all acts, requirements and provisions of this Ordinance, and any amendment hereof, by SPS, its officers, agents and employees on its part to be performed, complied with and abided by, and if at any time SPS shall refuse, fail to keep, perform, or comply with and abide by all and singular the acts, requirements, and provisions of this Ordinance, or any amendment, within sixty (60) days from receipt of written notice from the City Manager or their designated representative acting by Order of the City Council setting forth in detail the facts constituting default of SPS and what is required to cure such default; and upon continued failure of SPS to keep, perform, comply with, and abide by such acts, requirements, and provisions of this Ordinance, or any amendment or failure to cure the default set forth in written notice, the City Council may terminate, at its option, this Franchise and all privileges and Page 11 of 16 rights herein granted to said SPS. The notice herein mentioned shall be sufficient, if given to the Director, Customer and Community Relations for SPS located in Amarillo, Texas. XVII . Removal of Dangerous Obiects. The City shall have power at any time to require SPS to remove and abate at its own expense any installation or structure that is dangerous to life or property, and in case SPS, after reasonable notice, fails or refuses to act, the City shall have the power using reasonable means and methods to remove or abate the same at expense of SPS, all without compensation or liability for damages to SPS. XIX. No Authorization SPS agrees and acknowledges that this agreement does not authorize or permit SPS to synchronously connect to or access the power grid in the Electric Reliability Council of Texas (ERCOT) power system without the proper federal and state approvals. Any non -synchronous service requests from the ERCOT grid will be analyzed on a case -by -case basis. XXXVIII. Severability. If any provision, section, subsection, sentence, clause, or phrase of this Ordinance is, for any reason, held to be unconstitutional, void, or invalid (or for any reason unenforceable), the validity of the remaining portions of this Ordinance shall not be affected thereby. XIX. Prior Franchise Repealed and Release. This franchise replaces all former franchise ordinances granted to SPS or its predecessors, which are hereby repealed, which repeal is effective as of the time the franchise herein granted takes effect. There is specifically and particularly repealed, effective as of that time, Ordinance No. 8341 passed by the City of Lubbock on the second reading July 22, 1982, granting to Southwestern Public Service Company, its successors and assigns, a franchise for a period of Page 12 of 16 twenty (20) years, as amended by Ordinance No. 9329 passed by the City of Lubbock on the second reading February 8, 1990. The City and SPS further release, acquit and forever discharge the other party for any further claims or unresolved issues arising out of any audit conducted by the City regarding the prior franchise and the method of calculating the franchise fee for the period between the termination of the prior franchise and December 1, 2023, the effective date of new definitions to be used in calculating the franchise fee under this franchise. However, nothing contained herein relieves SPS of their obligation to continue to pay a franchise fee to the City under the terms of the prior franchise until the effective date of this franchise and as outlined in Section III above. [continues on next page] Page 13 of 16 XX. Final Passage/Acceptance SPS shall, within thirty (30) days from the date of the final passage of this Ordinance by the City Council of the City of Lubbock, file with the City Secretary a written statement signed in its name and behalf by an officer of SPS duly authorized by its Board of Directors in the following form: "The Honorable Mayor and the City Council of the City of Lubbock: "Southwestern Public Service Company, for itself, its successors and assigns, hereby accepts the attached Ordinance finally passed by the City Council of Lubbock, the day of , 2025, and agrees to be bound by all of its terms and provisions. Southwestern Public Service Company By: Name: Adrian Rodriguez Title: President "Dated the day of , 2025." The full text of this Ordinance shall, after final passage by the City Council of the City of Lubbock, be published once each week for three (3) consecutive weeks in a newspaper of general circulation published in the City of Lubbock, and the expense of such publication shall be borne by SPS. Upon said publication being completed, and the acceptance of this Ordinance by SPS as herein provided, this Ordinance shall take effect thirty (30) days after its last publication. Page 14 of 16 AND IT IS SO ORDERED. (Passed by City Council on first reading this Passed by City Council of second ATTEST: " ffy Courtney Paz, City Secretary APPROVED AS TO CONTENT: Erik Rejino, Assistant City Manager APPROVED AS TO FORM: Amy ' s, Deputy ' ttorney loth day of January , 2025. 28th day of January , 2025. W. Page 15 of 15 RAYIM, MAYOR CITY OF LUBBOCK § COUNTY OF LUBBOCK § STATE OF TEXAS § CERTIFICATE TO COPY OF PUBLIC RECORD I hereby certify, in the performance of the functions of my off ce, that the attached instrument is a full, true and correct copy of Ordinance No. 2025-00005 as the same appears of record in my office and that said document is an official record from the public office of the City Secretary of the City of Lubbock, Lubbock County, State of Texas, and is kept in said office. The total number of pages within the attached document is 3 pages. I further certify that I am the City Secretary of the City of Lubbock, that I have legal custody of said record, and that I am a lawful possessor and keeper and have legal custody of the records in said office. In witness whereof I have hereunto set my hand and affixed the official seal of said office the 30�h day of January, 2025. (City Seal) urtney Paz City Secretary City of Lubbock Lubbock County, State of Texas First Reading January 14, 2025 Item No. 5.5 FRANCHISE AGREEMENT Second Reading January 28, 2025 Item No. 6.6 2025- ORDINANCE NO. OOOOS AN ORDINANCE GRANTING TO SOUTHWESTERN PUBLIC SERVICE COMPANY ("SPS") D/B/A XCEL ENERGY THE RIGHT, PRIVILEGE AND FR.ANCHISE TO CONDUCT WITHIN THE CITY OF LUBBOCK, TEXAS ("CITY"), AN ELECTRICAL LIGHTING AND POWER BUSINESS AND TO ENTER UPON, ERECT, CONSTRUCT, MAINTAIN, EXTEND, REPAIR, REPLACE AND REMOVE IN, UNDER, UPON, WITHIN, OVER, ABOVE, ACROSS AND ALONG ANY AND ALL OF THE PRESENT AND FUTURE PUBLIC ROADS, HIGHWAYS, STREETS, LANES, AND ALLEYS OF THE CITY OF LUBBOCK, A SYSTEM OF POLES, POLE LINES, TOWERS, DISTRIBUTION LTNES, TRANSMISSION LINES, WIRES, GUYS, CABL1sS, CONDUTTS, TR.ANSFORMERS, AND OTHER DISTRIBUTTON AND TRANSMISSTON EQUIPMENT, FACILITIES AND APPURTENANCES NECESSARY OR PROPER FOR THE TRANSMISSION AND DISTRIBUTION OF ELECTRICITY INTO, IN, WITHIN, FROM, ACROSS, AND THROUGH THE CITY OF LUBBOCK, AS NOW EXISTING, OR AS SATD CITY LIMITS MAY HER�AFTER BE EXTENDED; AND GRANTING SPS, ITS SUCCESSORS AND ASSIGNS, THE AUTHORITY TO USE SUCH FOR THE PURPOSE OF TRANSMISSION, DISTRIBUTION, DELIVERY AND SALE OF ELECTRICITY TO THE CITY, AND TO THE INHABITANTS OF THE CTTY, OR ANY OTHER PERSON OR PERSONS, FIRMS OR CORPORATIONS, WHEREVER LOCATED WITHIN OR WITHOUT THE CITY LIMITS OF LUBBOCK, FOR USE BY SUCH PURCHASER OR PURCHASERS FOR ANY PURPOSE AUTHORIZED BY LAW FOR WHTCH ELECTRICITY MAY BE USED OR FOR ANY OTHER PURPOSE UR USE WHICH IS OR MAY BECOME NORMAL OR CUSTOMARY IN THE RETAIL ELECTRIC INDUSTRY IN TEXAS; PROVIDING THAT THIS FRANCT-IISE SHALL BE EFFECTNE FOR A PERIOD OF TWENTY (20) YEARS COMMENCING UPON AND EXTENDING FROM THE EFFECTIVE DATE OF THIS ORDINANC� AFTER I'INAL PASSAGE HEREOF ; PROVIDING FOR THE TEMPORARY REMOVAL, R.AISING OR LOWERING BY SPS OF ITS WTRES AND OTHER APPURTENANCES; PROVIDING FOR THE RIGHT TO, AND CONDITION OF, THE OPENING OF PAVEMENTS AND SIDEWALKS BY SPS; RETAINING ALL RIGHTS OF CITY TO REGULATE THE LOCATION OP SPS'S FACILITIES IN, UPON, AL,ONG, UNDER AND OVER THE STREETS, ALLEYS AND OTHER PUBLIC PLACES OF CITY, AS WELL AS TO REQUIRE Ti-IE RELOCATION OF SAM�; PROVTDING FOR EFFICIEN"1' ELECTRICAL SERVICE AND THE MAINTAINING OF SPS'S FACILITI�S; PROVIDING COMPENSATION, AND M�THOD OF PAYMENT OF SUCH, TO THE CITY FOR TI-IE USE BY SPS OF THE STREETS, ALLEYS AND PUBLTC WAYS OP THE CTTY PROVIDTNG FOR THE MAINTAINING OF RCCORDS BY SPS WITH RIGHT OF INSPECTION BY CITY RESERVTNG TO CITY ALL POWERS OF REGULATION; PROHIBITING ASSIGNMENT EXCEPT BY CONSENT BY CITY EXCEPT IN CERTAIN CASES; GNING CITY'S CONSENT TO THE CUTTING AND TRIMMING BY SPS OF CONFLICTING TREES; PROVTDiNG A SEVERABILITY CLAUSE; PROVIDING THA THIS FRANCHISE SHALL NOT BE EXCLUSIVE; MAKING MISCELLANEOUS PROVISIONS RELATIVE TO THIS GRANT OF FRANCHISE; REPEALING ALL PREVIOUS ELECTRICAL LIGHTING AND POWER FRANCHISE ORDINANCES AND RELATED RELEASE; PROVIDING FOR '1'HE PUBLICATION OF THIS FRANCHIS� �RDTNANCE AND ITS ACCEPTANCE BY SPS. WHEREAS, the City granted to Southwestern Public Service Company ("SPS") a franchise to operate and maintain an electric system in the City via Ordinance No. 2003-00110, finally passed by the City Council on October 10, 2023. WHEREAS, the electrical lighting and power franchise previously granted by the City Council of the City expires on October 10, 2023, and it appearing to this Council that the renewal of the franchise is expedient and wise, and will be of benefit to both SPS and the City; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS: I. Franchise Authorization That subject to the terms, conditions, and provisions of this ordinance, the City o Lubbock, Texas, hereinafter referred to as "City", does hereby grant unto Southwestern Public Service Company, a corporation incorporated under the laws of the State of New Mexico, having a permit to do business in the State of Texas, hereinafter referred to as "SPS", its successors and assigns, the right, privilege and franchise to conduct an electrical lighting and power business within the boundaries of the City, as such boundaries now exist or may hereafter be extended. SPS shall have the right to enter upon, erect, construct, maintain, extend, repair, replace, and remove in, under, upon, within, over, above, across, and along any and all of the present and future public roads, highways, streets, lanes, alleys and other public rights-of-way of the now or hereafter owned or controlled by the City a system of poles, pole lines, towers, distribution lines, transmission lines, underground and above ground lines, wires, guys, cables, conduits, transformers, and other distribution and transmission equipment, facilities and appurtenances necessary, proper or reasonably needed for the transmission and distribution Page 2 of 16 electricity into, in, within, fram, across and through the City as now existing or as the said City limits may hereafter be extended to the extent City is authorized to grant such right. SPS is authorized to use said poles, lines, towers, wires, guys, conduits, transformers, and other distribution and transmission equipment, facilities and appurtenances for the transmission, distribution, delivery and sale of electricity to the City and to the inhabitants of the City or any other person or persons, firms or corporations wherever located for use by such purchaser or purchasers for any purpose authorized by law for which electricity may be used or for any other purpose or use which is or may become normal or customary in the retail electric industry in Texas. II. Term. The term of this franchise granted to SPS shall be for twenty (20) years from the date the franchise becomes effective as outlined below. The franchise rights and privileges shall be in full force and effect January 28, 2025 or thirty (30) days from the last publication of this Ordinance, whichever occurs later, provided SPS has formally accepted this franehise as provided in Section'I XX. III. Pranchise Fee/Payment. As compensation and rental for the use of the streets, alleys and public ways of City in� the conduet of its business under this franchise, SPS shall pay the City each year of the life this franchise, beginning rebruary 1, 2025, a sum of money equal to five percent (5%) of annual gross receipts of SPS from its retail electric lighting and power sales for consumptio within the corporate limits of the City. All amounts payable to the City under this section shall be surcharged to SPS's customers taking electric service within the corporate limits of the City. The franchise payments shall be due and payable monthly with the first payment to be due and payable on January 15, 2024. Each subsequent payment shall be due on the 15`h day of each Page 3 of 16 month thereafter for the remaining life of this franchise. Each payment shall be based on the gross receipts of SPS during the preceding calendar month. Said monthly payments above provided shall be exclusive of and in addition to ad valorem taxes. All money due and payable to City by SPS computed under the terms of the previous franchise shall be payable to the time that computation begins under this franchise. Any and all such payments made by SPS pursuant to this Section shall be credited on any amount imposed, levied, or assessed against SPS by the City, pursuant to ordinance or otherwise, at any time as a charge (whether designated as rental, tax, or otherwise) for the use by SPS of the City's streets, alleys, and public rights-of-way. The term "Gross Receipts" as herein used, shall include all receipts from the sale of electric energy in SPS's certificated territory in the corporate limits of Lubbock, Texas. The term "gross receipts" shall also include all fees, commissions, collections, rents, royalties, and any income associated directly or indirectly with the sale of electric lighting and power within the corporate limits of Lubbock, Texas. Notwithstanding thc � general definition above, "gross receipts" shall not include revenues collected for franchise fees � or sales taxes, and does nat include bad debt from gross receipts billed but not paid and not� collected. Any revenue subsequently received by SPS that was previously determined to bc bad� debt by SPS shall be subject to the franchise fee. SPS's wholesale sale of electric lighting and� power to the City's municipally owned electric utility are not covered by this Franchise� Agreement and are not included in "Gross Receipts." It is further understood and agreed to by SPS that the franchise fec authorized hercin shall� form the basis for which any franchise fee is authorized and calculated according to state law. All franchise fees that SPS fails to pay within the time period specified in this shall bear interest according to the following formula: for the period January 1 through June 30 the prime rate last published in the Wall Street Journal in the preceding December plus Page 4 of 16 percent (2%); and for the period from July 1 through December 31, the prime rate last published in the Wall Street Journal in the preceding June plus two percent (2%). IV. Pole Location. Within the streets or other public rights-of-way of the City, the location and route of all poles, stubs, guys, anchors, lines, conduits, underground duct lines, manholes, and cables placed and constructed and to be placed and constructed by SPS in the construction and maintenance of its electrical lighting and power system in, within, through, or under the streets, alleys, or other public rights-of-way of the City shall be subject to reasonable and proper regulation, control, and direction of the City, or of the City official to whom such duties have been or may be delegated. All poles, guys, or anchors erected by SPS shall be so set that they will not cause diversion of surface waters in any gutter or drain so as to cause darnage to adjoining property, and so that the same will interfere as little as practicable with the ordinary travel on the streets, sidewalks and other public rights-of-way of the City; the regulation and control herein reserved shall include, without limitation, the right of the City to require SPS, at SPS's expense, to relocate its poles, lines, or conduits so as to permit the following activities undertaken by the City on its behalf: a. The widening or straightening of any street, alley or public right-of-way located within the City. b. The closing, opening or relocation of any street, alley or public right-of-way within the City. c. The location or relocation of any water or sewer lines within the City. d. The changing of grade of any street, alley, curb, or sidewalk within the City. e. The construction and maintenance of parks and other public improvements owned by the City located within the City. In all cases where SPS is required to relocate, change the route of, or the position of the � poles, lines, or the conduits, as a result of a request by the City, the City shall provide ninety (90) � days advance written notice to SPS specifying the new location, route, or position of the poles,� lines, or conduits involved. SPS shall be entitled to be paid for its cost and expenses of any� Page 5 of 16 relocation, raising, or lowering of its wires, required by the City, pursuant to this Section or Section V, only if such expenses or costs are reimbursable or payable to SPS or the City by the State of Texas, the United States, or any governmentai agency or subdivision of either, whether directly or indirectly. However, nothing herein shall impose any obligation on the City to pay such costs and expenses except to the extent it actually receives funds from the United States, the State of Texas, or any governmental agency or subdivision of either, for the reimbursement or payment of same. The provisions of this section shall not apply to improvements made by SPS on private easements purchased by SPS and recorded prior to any dedication of any street, alley or public way. In this latter event, SPS shall be reimbursed its costs and expenses of relocating facilities. V. Temporary Relocation. SPS, on written reasonable request of any responsible person, firm, corporation, or governmental authority, shall relocate, raise or lower its wires, where located on, in, or over the streets, alleys and other public ways of City, temporarily to permit construction work in the vicinity thereof, or to permit the moving of houses, or other bulky structures. The expense such temporary relocation, raising or lowering of such wires shall be paid by the benetted party or parties, and SPS may require the payment in advance, being without obligation to remove, raise, or lower its wires until such payment shall be made; provided, however, that no such payment shall be required of the City except as provided in Section IV. SPS shall be given prior written notice to arrange for such temporary wire relocations. Thc time period and manner for providing prior written notice shall be as specifed in SPS's tariff(s) governing temporazy raising or lowering of lines, as may be amended from time to time, currently Rules Tariff Sheet No. V- Page6ofl6 32. Currently, Rules Tariff Sheet No. V-32 requires at least seven (7) days prior written notice. In the event of an emergency, such notice period may be shortened to seventy-two hours. VI. Excavation of Sidewalks. If it becomes necessary in furnishing electricity as contemplated under this franchise, the City grants to SPS the right and privilege to take up pavements and sidewalks, if any, in and upon said streets, alleys, and highways in the City for the purpose of making such excavation and installation as may be necessary; provided, however, that SPS shall not take up or excavate any pavement at any time without first securing the written permission of the City Manager or their designated representative, which permission will not be unreasonably withheld; and provided further, that all excavations and installations so made shall be performed in a reasonable manner as will causc the least inconvenience to the public, and SPS shall promptly restore, or cause to be restored to as good condition as before working thereon all such pavements, sidewalks, streets, alleys, or highways excavated by it to the reasonable satisfaction of the City Manager or their designated representative. VII. Facilities Dama�e. If any facilities of the City shall be in any respect damaged or injured by SPS or any its oificers, agents, or employees in connection with the negligent performance of work done under this Franchise Agreement upon the streets, avenues, alleys, or other public places of the City of Lubbock, then SPS shall pay %r such damage. Conversely, if any of the facilities installed by SPS hereunder shall be in any respect damaged or injured by the City or any of its officers, agents, representatives, or employees, in connection with the performance of any work or repairs that may be done upon the streets, avenues, alleys, and other public places of the City Lubbock, but not including work or repair for or related to the City's municipally owned electric utility, SPS shall not be entitled to prosecute or maintain a claim against the City of Lubbock for Page 7 of 16 such damage or injury so sustained by it, except where such damages are the result of willful or gross negligence of the officers, agents, representatives or employees of City, and said is hereby waived. VIII. Citv's Sovereignt� The City, by the granting of this franchise, does not surrender or to any extent lose, waive, 1, or lessen the lawful powers and rights now or hereinafter vested in the City under the and Statutes of the State of Texas and under the Charter of the City to regulate the for services of SPS; and SPS, by its acceptance of this franchise, agrees that all such lawful power and rights as the same may be from time to time vested in the City shall bc in force and effect and subject to the exercise thereof by the City at the City's discretion. Notwithstanding anything contained in this ordinance to the contrary, all work done in with the construction, repair, maintenance, and operation of all facilities of SPS is bject to the continuing police power of the City; and SPS shall comply with all present and laws, ordinances, and re�ulations, except when such compliance is in conflict with that �authority specifically surrendered by the City herein. IX. Electric Service Provided. It shall be SPS's obligation hereunder to furnish eff cient electrical service to meet standards of the industry for the area. SPS shall serve every eligible consumer in the franchise area that requests service, subject to lawful policies and zvles or SPS regarding cost, customer deposits, return on investment, aceess and other reasonable iactors. SPS shall not discriminate against any person, corporation, firm, or association in the charge for such electrical current or in the service rendered under like circumstances. SPS shall not directly or indirectly grant any discount or rebate, or give things of value to circumvent the rate schedule as approved by the Page 8 of 16 appropriate regulatory authority. In order to meet competition, nothing herein shall prevent SPS from doing anything that is lawfully done by the City's municipally owned electric utility. X. Nonexclusive. Nothing contained in this Ordinance shall be construed as conferring upon SPS any exclusive rights or privileges of any nature whatsoever. XI. Annual Receipts Report/Ri�;ht to Audit. SPS shall on the 1 S` day of February of each year of the life of this franchise, file or cause to be filed, a statement, certified by a duly qualified officer of SPS, showing the gross receipts of SPS within the City of Lubbock (as defined above) during the twelve months ending on the 31 S` day of December immediately preceding. For the purpose of determining the amount of the gross, receipts of SPS, SPS shall keep in its office at the disposal of and open to inspection by any auditor authorized and appointed by City at all reasonable times, books of accounts and other records showing a full, true, complete and accurate account of the gross receipts of SPS from i electric lighting and power sales for consumption within the corporate limits of the City for prior three calendar years. XII. Indemnification. SPS shall indemnify and save the City hartnless from all claims, demands, or causes action brought against the City occasioned by or arising out of the construction, maintenance, or repair of SPS's electrical lighting and power system, or in any way growing of the granting of this franchise either directly or indirectly; provided, however, that provisions of this Section shall not be applicable to any claims, damages, actions, or causes o actions proximately resulting from the City, its officers, agents, representatives, or for which the City is otherwise liable as provided herein. XIII. Authoritv. Page 9 of 16 In granting this franchise it is understood that the lawful power vested by law in the City to require all persons or corporations to discharge the duties and undertaking for the performance of which this franchise was made, is reserved; this grant is made subject to all the rights, powers, and authorities either of regulation or otherwise reserved to the City by its Charter or by the general laws of the State. XIV. Assignment/Transfer of Franchise. The rights, franchises and privileges hereby granted shall not be transfened or assigned by SPS except with the consent of the City Council of the City of Lubbock expressed by Ordinance passed by said City Council; provided, however, SPS may mortgage or pledge its rights hereunder for security or obligations owing by SPS; and provided further, that a transfer could be made in a merger, consolidation, or re-organization proceeding to which SPS is a party or to a subsidiary corporation or affiliate corporation of SPS or wherein SPS sells its entire physical assets. It is specifically recognized that under the Publie Utility Regulatory Act, Chapter 39, Restructwing of Electric Utility Tndustry, it is anticipated that at some date in the futurc SPS � will unbundle into a power generation company, a retail electric provider, and a transmission and � distribution utility. At the time of such unbundling to comply with retail electric deregulation, � thc franchise grantcd herein will go with the distribution utility and the franchise fee thereafter� will be calculated as provided in Section III of this franchise. In the event of contemplated transfer of this franchise, under the terms of this sectionj permitting transfer without consent of City Council, SPS shall notify the City ofthe contemplated � transfer by written notice delivered to the City Secretary not less than sixty (60) days prior to accomplishment of any merger, consolidation, or re-organization proceeding or transfer of its entire physical assets; and will provide the City Council an opportunity to confer with the proposed transferee concerning proper acceptance of the terms of this franchise. Pagc 10 of 16 Prior to exercising any rights hereunder, any purchaser or transferee of SPS shall file with the City Manager or their designated representative a written acceptance of this franchise setting forth an agreement to be bound by all terms and provisions hereof. XV. Tree Trimmin� To the extent that the City has authority to do so, it gives to SPS, during the life of this franchise, the right, license, privilege, and permission to trim trees upon and overhanging the streets, alleys, sidewalks, and public places of the City, so as to prevent the branches of such trees from eoming in contact with the wires or other equipment of SPS. SPS agrees that it will fully protect and indemnify the City &om any and all claims, demands, actions, causes of actions, damages, and expenses azising because of such trimming by SPS under the provisions of this Section. XVI. Notice of Default. Th� franchise rights and privileges hereinabove granted to SPS, its successors and assigns � aze and shall be at all times, during the term and life of this franchise, contingent upon the faithful and punctual perfonnance of and compliance with all acts, requirements and provisions of this Ordinance, and any amendment hereof, by SPS, its officers, agents and employees on its part to be performed, complied with and abided by, and if at any time SPS shall refuse, fai] to keep,l perform, or comply with and abide by all and singular the acts, requirements, and provisions this Ordinance, or any amendment, within sixty (60) days from receipt of written notice from the� City Manager or their designated representative acting by Order of the City Council setting forth� in detail the facts constituting default of SPS and what is required to cure such default; and upon� continued failure of SPS to keep, perform, comply with, and abide by such acts, and provisions of this Ordinance, or any amendment or failure to cure the default set forth in written notice, the City Council may terminate, at its option, this Franchise and all privileges Page 11 of 16 rights herein granted to said SPS. The notice herein mentioned shall be sufficient, if given to thc Director, Customer and Community Relations for SPS located in Amazillo, Texas. XVII . Removal of Dangerous Objects. The City shall have power at any time to require SPS to remove and abate at its own expense any installation or structure that is dangerous to life or property, and in case SPS, after reasonable notice, fails or refuscs to act, the City shall have the power using reasonable means and methods to remove or abate the same at expense of SPS, all without compensation or liability for damages to SPS. XIX. No Authorization SPS agrees and acknowledges that this agreement does not authorize or permit SPS to synchronously connect to or access the power grid in the Electric Reliability Council of Texas (ERC�T) power system without the proper federal and state approvals. Any non-synchronous service requests from the ERCOT grid will be analyzed on a case-by-case basis. XXXVIII. Severabilitv. If any provision, section, subsection, sentence, clause, or phrase of this 4rdinance is, for any reason, held to be unconstitutional, void, or invalid (or for any reason unenforceable), the validity of the remaining portions of this Ordinance shall not be affected thereby. XIX. Prior Franchise Repealed and Release. This franchise replaces all former franchise ordinances granted to SPS or its predecessors, which are hereby repealed, which repeal is effective as of the time the franchise herein granted takes effect. There is speciiically and particularly repealed, effective as of that time, Ordinance No. 8341 passed by the City of Lubbock on the second reading July 22, 1982, granting to Southwestern Public Service Company, its successors and assigns, a franchise for a period of � Aage 12 of 16 twenty (20) years, as amended by Ordinance No. 9329 passed by the City of Lubbock on the second reading Fcbruary 8, 1990. The City and SPS further release, acquit and forever discharge the other party for any further claims or unresolved issues arising out of any audit conducted by the City regarding the prior franchise and the method oi calculating the franchise fee for the period between the termination of the prior franchise and December l, 2023, the effective date of new definitions to be used in calculating the franchise fee under this franchise. However, nothing contained herein relieves SPS of their obligation to continue to pay a franchise fee to the City under the terms of the prior franchise until the effective date of this franchise and as outlined in Section III above. [continues on next page] Page 13 of 16 XX. Final Passage/Acceptance SPS shall, within thirty (30) days from the date of the final passage of this Ordinance by the City Council of the City of Lubbock, file with the City Secretary a written statement signed in its name and behalf by an officer of SPS duly authorized by its Board of Directors in the following form: "The Honorable Mayor and the City Council of the City of Lubbock: "Southwestern Public Service Company, for itself, its successors and assigns, hereby accepts the attached Ordinance finally passed by the City Council of Lubbock, the Z day of , 2025, and agrees to be bound by all of its terms and provisions. Southwestern Public Service Company By. r � Na�ne: Adrian Rodriguez "1'itle: President "Dated the YL day of �! , 2025." The full text of this Ordinance shall, after final passage by the City Council of the City oi Lubbock, be published once each week for three (3) consecutive weeks in a newspaper of general circulation published in the City of Lubbock, and the expense of such publication shall be borne by SPS. Upon said publication being completed, and the acceptance of this Ordinance by SPS as herein provided, this �rdinance shall take effect thirty {30) days after its last publication. page 14 of 16 . AND IT IS SO ORDERED. Passed by City Council on first reading this 14th day of _ I Passed by City Council of second 28th day of _ � .RK W. MCBRA ATTEST: � Courtney Paz, City Secretary APPROVED AS TO CONTENT: �� ` e Erik Rejino, Assistant City Manager APPROVED AS TO FORM: r- ` ` Amy . ' s, Deputy ' itorney Page 15 of 15 January , 2p25. January , 2025. r—�-- � �R, MAYOR