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HomeMy Public PortalAboutIdaho Pwr Franchise Agmnt IDAHO POWER COMPANY P.O. BOX 70 BOISE, IDAHO 83707 STAN CRAVEN District Manager November 2, 1994 Gary P. Shimun City Manager City of McCall 216 East Park Street P.O. Box 1065 McCall, ID Re: Idaho Power Franchise Agreement with City of McCall Dear Mr. Shimun: Idaho Power has reviewed the proposed franchise agreement forwarded by the City of McCall. Idaho Power would prefer to follow its standard one-page franchise agreement for Idaho cities, which clearly and concisely covers the important elements of a franchise. Nonetheless, we believe that an agreement can be reached based on your proposed franchise form, with several modifications. The city of McCall's proposed franchise agreement appears to be based on Idaho Power's existing franchise agreement with the city of Ontario, Oregon, with a number of revisions added by McCall. In this regard, it is important to note that the Ontario ordinance represents a finalized agreement negotiated by Ontario and the Company, after give and take from both sides. Considering this fact, Idaho power is reluctant to agree to additional concessions in the franchise agreement, which is evenly balanced to begin with. It should be also noted that, with respect to franchise fees, the Ontario ordinance was executed under Oregon's statutes and regulations, which expressly authorize Oregon cities to impose franchise fees upon electric utilities (see Oregon Revised Statutes §§ 221.410 - 221.470 and Oregon Administrative Rules § 860-22-040). With this in mind, the Company has the following comments on the McCall franchise agreement: Sectioll ~: The McCall franchise ordinance states a term of ten years. The Ontario ordinance states a term of 20 years, which is the maximum franchise term in Oregon. The Company's franchise agreements in Idaho follow a standard 50-year term, which is the maximum term for new franchises in Idaho. Idaho Power would recommend a 20 to 50 year franchise term for the McCall ordinance. Telephone (208) 324-2993, Fax (208) 324-1224 SeCtions 2.3 & 4: These sections all include new language regarding the city's regulation of Idaho Power's facilities and operations. Idaho Power is concerned that this expanded language could infringe upon the existing authority of the Idaho Public Utilities Commission over the Company's operations. (Section 7 of the franchise agreement does acknowledge the authority of the Idaho Commission, but it refers only to Idaho Power's electric service and the rates and charges therefor. This does not cover the full extent of Idaho Power's operations that may be subject to the jurisdiction of the Idaho Commission.) To avoid a conflict with the Idaho Commission's authority, Idaho Power requests that McCall remove its new language in Sections 2, 3, & 4, as highlighted on the enclosed pages. This would leave the original language of the Ontario agreement, which provides appropriate guidelines for city regulation of Idaho Power facilities. Section 6: Idaho Power wishes to delete the city's new indemnification language and retain the standard liability provision set forth in the Ontario franchise agreement. That provision reads: The Grantee shall at all times indemnify and hold the City, its officers, employees and agents, harmless from any and all expense or liability arising from or by reason of any negligent act or omission of the Grantee, its representatives or employees, in the construction, operation or maintenance of any of the Grantee's electric utility property or facilities. Sections 9. 10. 11 & 12: Idaho Power wishes to delete these sections regarding franchise fees. Idaho Power does not pay franchise fees to cities in Idaho as proposed in the McCall ordinance. This is based on Idaho Power's position that Idaho cities do not have the right to unilaterally impose franchise fees on electric utilities such as Idaho Power. Idaho Power would accept a franchise fee which is approved by a vote of the citizens of the city, since the citizens would be responsible for paying the franchise fee as a separately itemized surcharge on their electricity bills. Section 15: Idaho Power is willing to accept McCall's additional wording in this section. However, we would like to add clarifying language to the final sentence, so it would read "In all cases, 60 days' notice shall be required on the part of City or Grantee to reopen the agreement under this Section.' Section 16: Idaho Power wishes to delete this new section regarding termination of the franchise agreement. Idaho Power believes that the city has sufficient authority to require Company compliance under the terms of the Ontario franchise agreement without resorting to the extreme remedy of termination. Section 17: Idaho Power wishes to delete this new section which would require the formal consent of the city for any sale, assignment or lease of the franchise agreement. Such a consent requirement could create a substantial burden on the Company if required for a corporate restructuring, merger, etc. (For instance, city approval would have been required for -2- Idaho Power's transfer of its state of incorporation from Maine to Idaho in 1989, under the language of Section 13). Your October 13, 1994 letter also addresses the removal of existing above ground distribution lines and the discontinuance of placing new distribution lines above ground. Idaho Power's policy is to relocate existing overhead facilities underground at the expense of the requesting party. Similarly, with respect to locating new facilities underground, Idaho Power requires that the requesting party pay the differential in cost between the underground facilities and Idaho Power's standard overhead facilities. Accordingly, if the city of McCall were to request that Idaho Power bury new facilities or existing overhead facilities, the city would be required to pay the related costs in advance. (This would be different from a city zoning ordinance requiring that distribution facilities be placed underground by developers, in which case the developer would pay the additional costs of underground facilities). Idaho Power's policy for underground facilities has been applied elsewhere in its service territory and was previously approved by the Idaho Public Utilities Commission in a case involving the city of Ketchum. Please call me at (208) 324-2993 if you would like to discuss this matter further. Sincerely, Stan Craven SC:mmb -3- ORI)INA~C[ NO. WAN ORDINANCE IN ACCO~CE WITH IDAHO CODE 50-328 AND 50-329 GRANTING A NONEXCLUSIVE FRANCHISE TO IDAHO POWER COMPANY, A CORPORATION AND TO ITS SUCCESSORS AND ASSIGNS, TO CONSTRUCT, MAINTAIN AND OPERATE IN AND UPON THE PRESENT AND FUTURE S~S, HIGHWAYS AND OTHER PUBLIC PLACES WITHIN THE CORPORATE LIMITS OF THE CITY OFMCCAT.L IDAHO, ELECTRIC UTILITY PROPERTY AND FACILITIES FOR SUPPLYING ELECTRICITY AND ELECTRIC SERVICE TO TH~ CITY, THE INHABITANTS THEREOF, AND OTHERS FOR A TERN OF TWENTY YF. AI~; SUBJECTING SUCH ELECTRIC SERVICE TO REGULATION BY PUBLIC AUTHORITY; PROVIDING FOR PAYMENT TO THE CITY OF COMPENSATION FOR THE EXERCISE OF SAID FRANCHISE; AND SPECIFYING OTHER T-~MITATIONS, TERMS AND CONDITIONS GOVERNING THE EXERCISE OF SAID FRANCHISE.' BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF MCCALL , IDAHO, THAT: ~. The City of McCall , Idaho (hereinafter called the 'City') hereby grants to IDAHO POWER COMPANY, a corporation, and to its successors and assigns (hereinafter called the 'Grantee') the right, privilege and franchise for a period of ten ¢10) years from and after $~nuarv 1. 1995 , however, with the right to amend by mutual agreement in accordance with Section 15, to construct, maintain and operate in and upon the present and future streets, alleys, highways and other public places within the corporate limits of the City, electric utility property and facilities for supplying electricity to the City, and the inhabitants thereof, and to persons and corporations beyond the limits of the City, subject to the terms and conditions hereinafter specified. In the case of annexation of property to the corporate limit, such area will be considered under this agreement, upon effective date of ~he annexation. All such electric utility property and facilities now maintained by the Grantee within the corporate limits of the City shall be deemed covered by this ordinance. ~. All of the Grantee's electric property and facilities shall be constructed and at all times maintained in good order and condition and in accordance with standard engineering practices and all applicable safety codes and lawful governmental regulations, including all construction standards presently in effect in the City of McCall or adopted by the City d~r~ the t~n (10) year term granted herein. The City shall have authority at all times, in furtherance of the safety, convenience and welfare of the public, to control by appropriate regulations the location, elevation and manner of construc~ion and maintenance of the Grantee's electric property and facilities on'the City streets, alleys, highways and public places, subject to the provisions of any state or federal law applicable thereto, and ~he Grantee shall at all times conform with all such regulations. ~. Upon request cf the City ~he qran~ee shall move their facilitie~ as necessary within ~he right of ~ay. This cost viii be the responsibility of ~he grantee. ~TJ~_~. It shall be lawful for ~he Grantee to make all needful or convenient excavations in any of the streets, alleys, boulevards and thoroughfares of the City for the purpose of erecting and laintaining the posts, poles, tower, or other supports for its wires or for the purpose of laying, maintaining and operating wires and other conductors underground for the purpose aforesaid, or to repair and i~prove such electric power and light system and to extend the sa~e as the growth of said City or the needs of the inhabitants thereof may require; provided that when the Grantee, or any person or corporation under the authority of this franchise, shall disturb any of said streets, alleys, avanues, boulevards, thoroughfares or public places for the purposes aforesaid, he, it or they shall comply with the existing a~d future ordinances of the City applicable thereto, and shall restore the same to good order and condition as soon as practicable and without unnecessary delay and failing to do so after five days' notice from the City, or its duly authorized officer or officers, then the City may place said street, alley, avenue, boulevard, thoroughfare or public place in such condition at the cost and expense of the Grantee, and said Grantee will forthwith pay the full cost and expense thereof upon demand of the City. JLIX facilities constructed under this ordinar~e shall be placed and maLn~lined at such places and positions in or upon such public ways and public places as shall not interfere with the passage of traffic and the use of adjoining property, and shall confora to all &PPlicable laws, rules and regulations. Grantee is required to apply for and receive all peraits as may be required by the City for work in the public way. ~TJ~_~. The City shall have the free right and privilege to s~ri~ and Baintain wires for its aunicipal police md fire ala~ syst~ u~n ~e ~les ~ o~er facilities erected ~d ~intain~ by ~e Grates bare,der. ~e City shall s~ing, ~intain .~d o~rate such wires at i~s o~ e~ense, risk and ...... g p s and xn such ma~er as not to ~se any ad~l=~ona~ e~nse u~n Grantee of ~s sa~d ~les and facilities. of ~'~r~-~~~s~ xn ~e max~=e~ce, o~ration or repair , nd app~enances. ~F~J~_~. The Grantee shall at all t~es inde~nify and hold the City, its officers, employees and agen%s, harmless from any and all clalas, causes of action, expense or liability arising out of, or in any way connected wi~h ~he construction, operation or ~aintenance of any of ~he Grantee's ~l~ctric facilities bM ~r~ee and/or Gr~tee's ag~s, e~loyees or represen~a~ives. ~r~ee shall provide an Xd~o p~lic i~urance ce~ifi~e pro~ec~in~ ~e Ci~M ~der ~e Xd~o ~o~ cla~ a~a~u~e. ~J~. The electric service to be furniehed to the public hereunder, and all rates and charges ~herefor, and all regulation of the Grantee applicable thereto, shall at all rises be subject to all rules, regulation and orders that ~ay be lawfully prescribed by the Public Utility Commission of the State of Idaho or by any o~her governmental authority now or hereafter having Jurisdiction over such matters. During the tera of this franchise, the Grantee shall continuously maintain facilities in the City for convenience to its customers for the paylent of bille for electric service during the usual office hours. ~~[_~. When neceeaary, in order to pezlit any duly authorized person to move any building or other structure across or along any street, alley, avenue, boulevard, or public place within the City, the Grantee shall temporarily raise or remove its wires, fixtures and appurtenances upon such street, i alley, avenue, boulevard, thoroughfare or public place, upon seventy-two hours written notice in advance from such person, such notice to bear the approval of such official as the City Bay designate, at such time and in such manner as Bay be necessary reasonably to accoB~odate such moving, consistently with the maintenance of proper service to the Grantee's customers; provided, however, ~J~at the cost to the Grantee of such temporary raising or removal, and of any interruption of the Grantee's service to its customers caused thereby, shall first be paid or satisfactorily secured to the Grantee by the owner or mover of such building or other structure. ~TJJiH_~. As compensation for the right, privilege and franchise hereby granted, the Grantee shall pay to the City on or before the 15th day of each January, April, July and October following adoption of this ordinance an amount equivalent to three percent (3%) of the Grantee's mGross Revenuesw for the preceding quarter. The terB mGross Revenues' as used herein shall Bean and be construed to be the amount of money actually collected fro, all sources by the Grantee during the preceding quarter within the corporate limits of the 'City. All sums which become delinquent shall accumulate interest at the etatutory rate provided in Xdaho Co4e Title 28, Chapter 22, Section 104(1). The accrual of interest is not intended to waive or in any ~nner restrict City's ahility to elect any procedure or method of collection permissible by law to enforce all the ter~s and conditions of this ordinance or the franchise agreement. Xn addition, where the ~ity determines by audit, financial statement or other method, that grantee has underpaid franchise fees and where lmayment was not received by the city within the quarter ~wed, the grantee may be required to pay 3 all fees and interest due and an additional penalty of 25% of ~he total Auount owed. Such franchise fee nay be listed as a separate iteu on the customer's utility bill. SECTION 10. City agrees to follow the notice requirements of 63-2224A prior to the approval and commencement of this franchise agreement. ~TJ~_~. The Grantee shall keep accurate books of account and the City shall have the right to inspect the sam et all times during business hours, and from tine to time audit the same for the purpose of determining such 'Gross Revenues.u Such franchise compensation paynen~s will be accepted by the City in lieu of and as payment for any license, privilege or occulMtion~ax or fee for revenue or regulation now or hereafter to be imposed by the City upon the Grantee during the tern of this franchise; provided, however, that this section will not be interpreted or be construed as in any manner exempting the Grantee froR paying the usual and normal real and personal property taxes to any and all taxing bodies within the boundaries of which the Grantee functions, operates and owns property, and during the tern hereof the City will not require the Grantee to pay to the City any additional license, privilege or occupation tax or fee. The City may require an auditorts negative assurance statement from Grantee. ~TJ~_~_~. In the event that a franchise fee paid by another oft he City's franchise grantees exceedsthe&uountpaidby Grantee herein, the franchise fee addressed in this Agreement Bay be raised to that level at the discretion of the City. SECTION 13. The Grantee shall have the right and privilege, insofar as the city is able to grant the sane, in accordance with National Arbo~ist Association standards, of the trimming of all trees w~lch overnang ~he streets or lmblic places in such a manner and to such extent as will prevent the branches or limbs or other parts of such trees from touching or interfering with its wires, poles and other fixtures and equipment; providing, however, that no such trees will be ~:rimmed or cut back farther than may be necessary to prevent such interference a~d to allow the proper operation and maintenance of said line poles and fixtures. However, except in an emergency, no trimming shall be undertaken without giving the adjacent property owner notice that such trLmming will be performed. ~T.L~iA. The Grantee shall Bain~ain and operate a system for the distribution of electricity in'the City so as to furnish what shall be known as a twenty-four hour service, but the Grantee does not guarantee continuous and uninterrupted service under the terms hereof and under no circumstances sh~ll the ~rantse be held liable to or responsible by the City on account of interruption or failure of service caused by stor~s, washouts, accidents, floods, acts of God or the public enemy, war, strikes, damages by the elements or damage to plant or equipment on account of any circumstances beyond the control of the Grantee. However, the Grantee does agree to use due diligence to ~aintain continuous and uninterrupted service. · ~J~2/_~. In the event of an a~end~ent to the laws, rules or regulations of the City of McCall , the State of Idaho or the Public Utility Conission of Idaho applicable to this franchise, or for periodic review of any section of this agreement the ter~s of this franchise and the rights and privileges hereby conferred may be changed, altered, amended or iodified upon lutual agreement between the City and the Grantee. In all cases, 60 days notice shall be required on the part of City or Grantee to reopen the agreement. ~[~__~. If a grantee willfully violates or fails to comply with any of the provisions of this franchise, the City shall give written notice to the grantee of the alleged non-compliance of it's franchise. The grantee shall have forty-five (45) days from the date of notice of non-compliance to cure such alleged default or, if such default cannot be cured in forty-five (45) days, to present to the City a plan of action whereby such default can be promptly cured. If such default continues beyond the applicable dates agreed to for such cure, the City shall give the grantee written notice that all rights conferred under this Ordinance and its franchise ~ay be revoked or terminated by the Council after a public hearing. The grantee shall be entitled to not less than thirty (30) days prior notice of the date, time and place of the public hearing. The City may elect, in lieu of the above and without any prejudice to any of its other legal rights and remedies, to obtain an order fro~ the district court having jurisdiction compelling grantee to co~ply with the .pro.v.isio_.r~. o.f the franchise and recover damages and costs incurred oy r~e cl=y oy reason of the grantee ts failure to co~ply. · ~TJ~/. Sale, assignment or lease of this franchise is prohibited without the express written consent of the City. ~F~TJ~_L~. Inasmuch as the Grantee has constructed and ri_ow../.? .main.tainin_g and operating electric utility property and raclli=les Ln and upon the streets, alleys, avenues, highways, ,b~__u_l_e~v~a_r_ds,_.th. oro.u_g.hfare? and public places .in the City under a ~a-~n~se wn~cn wl~ expire on Ju]v 1. 1994 , it is hereby adjudged and declared that this ordinance is necessary for ~t~.e p_rese.r~.a, tion _.of the public peace, healths end safety, and v-nererore ~ls ordinance shall take effect on January 1, 1995. 5 IDAHO POWER COMPANY I.P.U.C. NO. 25, TARIFF NO. SCHEDULE NO. 71 OVERHEAD AND UNDERGROUND D~STRIBUTION LINE EXTENSIONS (cont) VIII. REFUNDS (Continued) · "'RD REVISED CANCELS S[COND R[V)SED SHEET NO. 27E IDAHO PUBLIC UTILITIES COM?~)SSION APPROVED EFFECTIVE JUN 1 4 '91 JUL 1 -'91 ~ /~ ~ SECRETARY If the Extension Allowance of an Additional Applicant covers all applicable payments and still has a remaining balance, that surplus will be refunded among Vested Interest holders on a Connected Load basis until the surplus is exhausted or all Vested Interests are fully refunded. Vested Interest refund payments may be waived by notifying the Company in writing. Refund Limitation~ 1. Refunds will only be made for connections during the first five years following the completion date of the Line Extension or Upgrade construction. 2. Refunds will not exceed lOQ ~ of the refundable portion of any party's cash payment to the Company. IX. JAHO LOCAL IMPROVEMENT DISTRICT~ Unless specifically provided for under this paragraph, a Local Improvement District will be provided service under the general terms of this tariff schedule. ~ -n will; rovide a cost. estimate and feasibility.study..fOr-:a:.Local~ · improvement¥.Dt)tr~ct':w~thinX20~:days'::af~e~< rece~wng.the, reso]ut~on --from the reqUestin~bV~rningbodY. The cost estimate will be based on Work Order Costs and will not be considered binding on the Company if construction is not commenced within six months of the submission of the estimate for reasons not within the control of the Company. The~go~ern'ing~body~ssuing'~the..~esp~Utio~~l~-aY~he for the'~costs~ reg~rdless:~of whe~heK:the Line.ExtensJon~or...the£onvers)on.acLua~Y~~-e- After passage of the Local Improvement District ordinance, the Company will construct the Line Extension or Conversion. Upon completion of the project the Company will submit a bill to the Local Improvement District for the actual cost of the work performed, including the costs of preparing the cost estimate and feasibility stud), lf~Fth~-:-a~t~al..,CbSt'~is less than the estimated~bst~:thej:LPq~)/ ImprovementDtstrict'::Will..pay~..the._~gJdb~)--~Jbf-~: i~LIhe'~actU~l:~cpAtjj~x~edsJhe estimated~cost,i~hejLocal~.improvement- Dtstr.ict.will.~pay,on)Y~t~st4mated/cost. The governing body will pay the Company within 30 days after the bill has been submitted. A Local Improvement District will be eligible for an Extension Allowance for any new load connecting for service upon the completion of the Line Extension. A Local Improvement District will retain a Vested Interest in any Line Extension to the Local ImprovementDistrict. A Local Improvement District may waive payments for Vested Interest from Additional Applicants within the Local Improvement District. Issued by IDAHO POWER COMPANY Issued - May 20, 1991 Effective July 1, 1991 D. H. Jackson, Vice President, Distribution 1220 Idaho Street, Boise, Idaho Association of Idaho Cities 3314 Grace Street, Boise, Idaho 83703 Telephone (208) 344-8594 Fax (208) 344-8677 November 3, 1994 To: Cities Served by Idaho Power Fr: Scott McDonald Re: Update There are several attachments to which immediate attention should be paid. The first document is the minutes of our last meeting with Idaho Power. We left this meeting with the feeling that they would be willing to work with us on a compromise to an election. We also made several changes to our draft ordinance at their request, which is attached to the minutes. We have also sent the draft ordinance to Washington Water Power and Utah Power and Light for their comments. However, three days later, Idaho Power proceeded to hand out information on their own at a seminar attended by several cities. Please note my subsequent memo to the Board with supporting documentation. It is important that you review all of this information. We have identified thirteen cities so far whose franchises are either expired, or who currently do not have a franchise with Idaho Power. Several of those cities have tentatively agreed to look at the simultaneous passage of a franchise ordinance calling for franchise fees. Based upon Idaho Power's actions, it is our conclusion that the only way this will be settled is through the court process. Some City Council's have decided to go ahead for renewal without the franchise fee at this time. Please be aware that the City of Payette has language in their franchise, approved by Idaho Power that allows the imposition of franchise fees in the future (attached). If you are a city that is proceeding, we strongly urge you to get this language in your agreement so that you do not eliminate this option in the future. Finally, please note that if it is your intent to begin negotiations on a utility franchise, the Idaho Code 50-341 does require than franchises go through the formal bidding process. Please remember to do this prior to entering into any agreements. We will be providing further information as the thirteen cities develop a strategy on which to proceed. ~. Prmled On Flecyclec~ PaC.~ ~. OFFICERS President Paul Agidlus Mayor. Mosco~ Fiml Vice Pre.eat Winston Goenng Mayor. Nampa Second Vice President Kirk Hansen Mayor, Soda Springs Third Vice President Brent Coles Mayor. Bo,se Legis~tive Cbairpersoa Paula Fome3 Councilmember. Boise Immediate Past President Karen McGee Councilmember. Pocatello Executive Director Scott B McDonald DIRECTORS James Hammond Mayor. Posl Fails Susan Johnson Councilmember. Sandpoim Lo~etla Eisele Councilmember, Lewislon Laura Booth Councitmember, Orofino Tad Freeman House Mayor, Cascade Bart Westberg Councilmember. Wei~r Max Yemngton Counctlmem~er. Meridian Ted EIhs Ma3or. Garden Cit} Chuck Ge,ka Councilrnember. BuM Daxid Adair May or. Gooding Grego~ .Xnderson Councilmember. Pocalello J. ~,'aher Ross Ma}or, Preston John Walker Mayor. Challis James F]amm Councilmember. Rexb~rg ACTIVE PAST PRESIDENTS Dixie Reid Councilmember. Coeur d'Aiene Gram K~ngsfon:l Ma} or. Meridian Harold Sims Mayor, Bonnets Fen3. John O Co{am. Jr, Ma3 or. Chubb~ck Tim Ridinger Mayor. Shoshone Association of Idaho Cities 3314 Grace Street, Boise, Idaho 83703 Telephone (208) 344-8594 Fax (208) 344.8677 MINUTES Idaho Power Franchise Meeting October 19, 1994 The meeting was begun at 10 am at the Twin Falls City Hall. Cities represented included Hollister, Hagerman, Buhl, Boise, Pocatello, Hailey, Ketchum, and Mountain Home. The fn'st part involved discussions on other information that the cities should have in making their decision to pursue a franchise fee with Idaho Power. This information includes: 1) What cities in Idaho have their own electric system and what revenues do they see from that operation. 2) What franchise fees do the other electrical utilities pay in Idaho 3) Comparison of rates (kilowatt hours) paid in idaho versus regionally After this and other information is compiled, it needs to be put in an information packet for the cities. During the second half of the meeting, representatives from Idaho Power were present. Rich Hahn and Pat Harrington were present. The conversation dealt with Idaho Power's position stating that an election of the people approving the franchise fee would be needed before they would agree. The general discussion centered on a non-binding survey of the citizen's that would be prepared by a third party. Information on the issue would be jointly prepared to be fair to both groups and public meetings would also be held. Idaho Power representatives requested that they get this proposal in writing including these points and that they would consider it. The group then discussed the other wording changes requested by Idaho Power in the document. A draft ordinance is attached reflecting these changes. The meeting was adjourned at 2:35 pm. Printed on Recycled Pa,oer 10/25/94 ORDINANCE NO. "AN ORDINANCE IN ACCORDANCE WITH IDAHO CODE 50-328 AND 50-329 GRANTING A NONEXCLUSIVE FRANCHISE TO IDAHO POWER COMPANY, A CORPORATION ANDTO ITS SUCCESSORS ANDASSIGNS, TO CONSTRUCT, MAINTAIN AND OPERATE IN AND UPON THE PRESENT AND FUTURE STREETS, HIGHWAYS AND OTHER PUBLIC PLACES WITHIN THE CORPORATE LIMITS OF THE CITY OF , IDAHO, ELECTRIC UTILITY PROPERTY AND FACILITIES FOR SUPPLYING ELECTRICITY AND ELECTRIC SERVICE TO THE CITY, THE INHABITANTS THEREOF, AND OTHERS FOR A TERM OF TEN YEARS; SUBJECTING SUCH ELECTRIC SERVICE TO REGULATION BY PUBLIC AUTHORITY; PROVIDING FOR PAYMENT TO THE CITY OF COMPENSATION FOR THE EXERCISE OF SAID FRANCHISE; AND SPECIFYING OTHER LIMITATIONS, TERMS AND CONDITIONS GOVERNING THE EXERCISE OF SAID FRANCHISE." BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF IDAHO, THAT: SECTION 1. The City of , Idaho (hereinafter called the "City") hereby grants to IDAHO POWER COMPANY, a corporation, and to its successors and assigns (hereinafter called the "Grantee") the right, privilege and franchise for a period of ten (10) years from and after , however, with the right to amend by mutual agreement in accordance with Section 15, to construct, maintain and operate in and upon the present and future streets, alleys, highways and other public places within the corporate limits of the City, electric utility property and facilities for supplying electricity to the City, and the inhabitants thereof, and to persons and corporations beYond the limits of the City, subject to all ordinances and regulations of the city and to the terms and conditions hereinafter specified. In the case of annexation of property to the corporate limit, such area will be considered under this agreement, upon effective date of the annexation. All such electric utility property and facilities now maintained by the Grantee within the corporate limits of the City shall be deemed covered by this ordinance. SECTION 2. Ail of the Grantee's electric property and facilities shall be constructed and at all times maintained in good order and condition and in accordance with standard engineering practices and all applicable safety codes and lawful governmental regulations, including all construction standards presently in effect in the City of or adopted by the City during the ten (10) year term granted herein. The City shall have authority at all times, in furtherance of the safety, convenience and welfare of the public, to control by appropriate regulations the location, 1 SECTION 6. The Grantee shall at all times indemnify and hold the City, its officers, employees and agents, harmless from any and all claims, causes of action, expense or liability arising out of, or in any way connected with the construction, operation or maintenance of any of the Grantee's electric utility property or facilities by Grantee and/or Grantee's agents, employees or representatives. Grantee shall provide an Idaho public liability insurance certificate protecting the City under the Idaho tort claims statute. SECTION 7. The electric service to be furnished to the public hereunder, and all rates and charges therefor, and all requlation of the Grantee applicable thereto, shall at all times be subject to all rules, regulation and orders that may be lawfully prescribed by the Public Utility Commission of the State of Idaho or by any other governmental authority now or hereafter having jurisdiction over such matters. During the term of this franchise, the Grantee shall continuously maintain facilities in the City for convenience to its customers for the payment of bills for electric service during the usual office hours. SECTION 8. When necessary, in order to permit any duly authorized person to move any building or other structure across or along any street, alley, avenue, boulevard, or public place within the City, the Grantee shall temporarily raise or remove its wires, fixtures and appurtenances upon such street, alley, avenue, boulevard, thoroughfare or public place, upon seventy-two hours written notice in advance from such person, such notice to bear the approval of such official as the City may designate, at such time and in such manner as may be necessary reasonably to accommodate such moving, consistently with the maintenance of proper service to the Grantee's customers; provided, however, that the cost to the Grantee of such temporary raising or removal, and of any interruption of the Grantee's service to its customers caused thereby, shall first be paid or satisfactorily secured to the Grantee by the owner or mover of such building or other structure. SECTION 9. As compensation for the right, privilege and franchise hereby granted, the Grantee shall pay to the City on or before the 15th day of each January, April, July and October following adoption of this ordinance an amount equivalent to three percent (3%) of the Grantee's "Gross Revenues" for the preceding quarter. The term "Gross Revenues" as used herein shall mean and be construed to be the amount of money actually collected by the grantee from it's customers fp~r_l~iqht, heat, power and electri, c eDerg¥ consumed during the preceding quarter within the corporate C~~ limits of the CiTy. All sums which become delinquent shall accumulate interest at the statutory rate provided in Idaho Code Title 28, Chapter 22, Section 104(1). The accrual of interest is not intended to waive or in any manner restrict City's ability to elect any procedure or method of collection permissible by law to enforce all the terms and conditions of this ordinance or the interruption or failure of service caused by storms, washouts, accidents, floods, acts of God or the public enemy, war, strikes, damages by the elements or damage to plant or equipment on account of any circumstances beyond the control of the Grantee. However, the Grantee does agree to use due diligence to maintain continuous and uninterrupted service. SECTION 14. In the event of an amendment to the laws, rules or regulations of the City of , the State of Idaho or the Public Utility Commission of Idaho applicable to this franchise, or for periodic review of any section of this agreement the terms of this franchise and the rights and privileges hereby conferred may be changed, altered, amended or modified upon mutual agreement between the City and the Grantee. In all cases, 60 days notice shall be required on the part of City or Grantee to reopen the agreement pursuant to this section. ~e SECTION 15. If a grantee willfully violates or fails to comply with any of the provisions of this franchise, the City shall give written notice to the grantee of the alleged non-compliance of it's franchise. The grantee shall have forty-five (45) days from the date of notice of non-compliance to cure such alleged default or, if such default cannot be cured in forty-five (45) days, to present to the City a plan of action whereby such default can be promptly cured. If such default continues beyond the applicable dates agreed to for. such cure, the City shall give the grantee written notice that all\ rights conferred under this Ordinance and its franchise may be\ revoked or terminated by the Council after a public hearing. The\ grantee shall be entitled to not less than thirty (30) days prior\~-~ notice of the date, time and place of the public hearing. The City\ may elect, in lieu of the above and without any prejudice to any of~ its other legal rights and remedies, to obtain an order from the /~DDC, district court having jurisdiction compelling grantee to comply /~f.~j~-- with the provisions of the franchise and recover damages and cost~/D. incurred by the City by reason of the grantee's failure to comply/ ;~ SECTION 16. Sale, assignment or lease of this franchise is prohibited without the express written consent of the City. Consent will not be withheld as long as the new owner, assignee or~ leasee agrees in writing to abide by the terms and conditions of/~ this franchise agreement and that there has been no prior default/ by Idaho Power. SECTION 17. Inasmuch as the Grantee has constructed and now is maintaining and operating electric utility property and facilities in and upon the streets, alleys, avenues, highways, boulevards, thoroughfares and public places in the City under a franchise which will expire on , it is hereby adjudged and declared that this ordinance is necessary for the preservation of the public peace, health and safety, and 5 Association of Idaho Cities 3314 Grace Street, Boise, Idaho 83703 Telephone (208) 344-8594 Fax (208) 344-8677 October 28, 1994 TO: FROM: SUBJECT: MEMORANDUM AIC Legislative Committee/AIC Board Scott B. McDonald, Executive Director Electrical Franchise Fees AIC and selected cities have met with representatives of Idaho Power on three occasion to negotiate a model franchise agreement that includes a 3% franchise fee. The most recent negotiating session occurred on October 19 in Twin Falls. Changes to the ordinance were agreed to in that meeting. There were some issues, however, that both sides agreed to continue to work on to reach resolution. The use of an advisory ballot by the city residents is the major stumbling block. Enclosed is the ballot mailed by Idaho Power to Nampa rate payers in 1970. By the third reading, the Nampa City Council lost support for their franchise ordinance. AIC firmly opposed the use of such an advisory ballot during our meeting with Idaho Power. As a compromise, we offered to cosponsor a mailing desribing the pros and cons of franchise fees to citizens. The cities would write the "pro" portion, and Idaho Power would write the "con" portion. Additionally, if desired, a multiple choice survey of several fiscal alternatives could be professionally written and independently administered as an alternative for the more populated cities. On Friday, October 21, Idaho Power moved ahead unilaterally with their own public information campaign on franchise fees. (See enclosure entitled "Idaho Power Information Sheet - Utility Franchise Fees"). This action indicates that Idaho Power intends to ~ the process of g~L~l~ Idaho code as it relates to cities franchise authority. Their stated goal is to legislate the following: OFFICERS P~ul MayoL Moscow Fir~ Vice PTeskiem Winsto~ Ki~ Hsn~n ~ayor. ~ S~n~s ~ %'~ ~nt ~tive ~la F~) C~ii~m~r, Ka~ ~ttve Dtr~ DIRECTORS James Hammond Mayor. Post Falls Su~an Johnson1 Coun¢ dmcmber. Sandpoim Lo~ ella Fi~'le Counciimcmber. Lev,.istor~ Laura Booth Councilmember. Orofino Tad Freeman House Mayor. Cascade Bart We'qberg Councilmcmber. Weiser Max Ycrnngton Coun¢llmember. McrMian Ted Elhs Ma.~ or. Garden C,~ Chuck Cse~k a Councilmember. BuM David Adair Ma)or. Goodtng Gregor%. Anderson Councilmernber. Pocale]lo .l. Waller Ros~ Ma.~ or. Pre~ton John Walker Mayor. Challi~ .lames Flarnm Co~nciimernber. Rexbur$ ACTIVE PAST PRESIDENT D~xie Reid Councilmember. Coeur d'Alem Grant Kingsford Ma) or. Meridian Harold Sim, ~ta.~ o~. Bonner~ Fen%, .lohn O. Colanl..lt. Ma) or. Chubbuck Tim R~dinger Ma.~ or. 5ho,hone Enclosed is an opportunity for you to express your opinion concerning a pro- posed new tax which would apply only to Nampa electric users. SEVERN, RIPLEY, DOORN & HANSON Certified Public A~c~untanm P. O. BUx 446 Nam~a, Idaho 8365 i Bulk Rate U. ~. POSTAGE PAID I~Or/11Jt NO. 1 1 NAMPA, IDAHO ERNEST E STARR lSl~ TTH ST NO NAHPA IDAHO 836~1 BUSINESS REPLY CARD First Class Jl~rmit No. 21 Nampa, Idaho SEVERN, RIPLEY, DOORN & HANSON Certified Public Accountants P.O. Box 446 Nampa, Idaho 83651 PRESS RELEASE The annual cost for street lighting in our city' now costs in excess of $123,000 per year. It is paid for with revenue fi.om property taxes. Tax exempt property and those people who do not own property are exempt fi.om participating in this cost. For this reason the city admin- istration is planning to impose a 3% franchise fee on Idaho Power for use of public streets and alleys for the transmission of their power. This will be the same fee that is now being paid by Intermountain Gas Company for the use of public rights-of-way. Because both companies are competitors it has been unfair to charge the fee with one company without charg~ing the other. The revenue from the fee with Idaho Power will be used to pay for the cost of street lighting. If there is any surplus it will be divided equally between the budgets for the police and fire departments. This will bring about a large saving to the real property owners in our city. A residence that now pays a power bill of $25.00 will pay an additional 75¢ a month with the franchise fee. The bulk of the revenue would come from the larger users such as business and industry. Tax exempt property such as fraternal organizations would also pay their pro- portionate share. Practically everyone in the city benefits fi.om street lighting and police and fire protection. This proposed fee would make it possible for everyone to participate instead of leaving all the burden to the people who pay property taxes. Ernest E. Start MAYOR City of Nampa EES:cmb d3 Association of Idaho Cities 3314 Grace Street, Boise, Idaho 83703 Telephone (208) 344-8594 PRESS RELEASE FOR I~RELEASE October ~199~) EleetricallY-~anchise Fees vs Property Tax Contact: Scott McDonald 344-8594 Idaho cities are seeking to ease some of the burden placed on the property tax by requiring Idaho Power to pay a fee to the cities as part of their franchise agreements. Public utility companies doing business in a city usually do so under the terms of a franchise granted by the city. The franchise normally states the obligations the utility has to the city in return for the privilege of installing and maintaining utility equipment on public property. The franchise fee is the compensation to be paid for this privilege and for the inconvenience and expense to the city caused by the presence of this equipment on the public streets and in conduits under the public ways. In cases where a franchise fee provision is not included in the agreement, the city must mm to the property tax to cover expenses created by the presence of the utility. Idaho Power's major competitor, Intermountain Gas, currently pays 3 percent of its gross receipts to cities in the form of a franchise fee. For cities to continue imposing this fee on gas it must impose the same fee on electrical services or be in violation of a provision of Idaho's constitution requiring a uniformity upon persons and property. Idaho Power currently pays a franchise fee of 3 percent of its receipts to the neighboring City of Ontario, Oregon. Idaho Power has never paid a franchise fee to its Idaho cities. It is Idaho Power's contention that Idaho Code is vague on the authority of cities to collect a fee - attorneys for AIc and affected cities do not agree. As the 50 year franchise agreements expire between many Idaho cities and Idaho Power, cities will be negotiating a 3 percent franchise fee on the electric utility as part of the renewal process. Cities contend that a franchise fee would spread the cost of utility maintenance within cities' right-of-ways to a broader base of utility rate payer. The cost would be spread to all utility users rather than having the expense fall solely on the property owners. There are a multitude of government organizations who are exempt from paying any property taxes but benefit from city services. - more - IDAHO POWER COMPANY P.O. BOX 70 BOSL IDAHO 83707 Idaho Power Information Sheet Utility Franchise Fees Q: What is a franchise? A: Muaici~ franchis~ authorize utaities mzvice providers m ufflize a city's m'eets and alleys fm the locazion of equipment and facilities. In Idaho Power's case, this peanains m the electrical equipment _~ec_ex~,,'y to provide ~n ~ service. Franchise agreements may also restrict the city's right to compete with a utility's service to city Franchises don't grant Idaho Power the right to serve cus~mers. The Idaho Public Utilities Commission grants that Q: What is a franchise fee? A: It's a fee or tax charged to the utility or business by the city, usually based on a percentage of the service provider's groas revenues within the city. Q: Does Idaho Power pay franchise fees in Idaho? A: No. The company believes that under Idaho law, cities are not authorized to impose franchise fees on electric utilities such as Idaho Power. The company does not pay fees under any of its existing Idaho franchise agreements, which have been in place up to 50 years. Q: Who would pay the fee? A: Ultimately, the company's customers would. The Idaho Public Utilities Commisaion has ruled that franchise fees will be billed to a utility's customers within the ama or locality in which the fee applies and appear as a separate item on customers' bills. Idaho Power would serve in an adminislzative role by a:glocflng thc fees and turning the revcnue~ over to fl~e city. Q: Does Idaho Power oppose franchise fees? A: Under certain terms and conditions, Idaho Power would not oppose franchise fees. Chief among them is a pro- vision to allow customers a voice in the imposition of such fees. Q: How would customers' voices be heard? A: Idaho Power supports providing all city resi- dents an oppaxunity to vote on franchise fees at a public ele~on. No frandtise fee should be imposed upon an ~ ufility's cus~mners without majority approval. Q: Specifically, what conditions does Idaho Power believe are necessary? A: Idaho Power would not oppose change~ to-state law governing franchL~ fees if the legislation included the following: · Electric t~Lity fi-anchises fees must be approved by a majority of city r~idents voting in an election. · Franchise feea shall be set forth as a separate item on each customer's electric utility bill. · The fees shall not exceed 3 percent of the reve- nues collected by an elecwic utility fi'om its customers within the city limits. · The Idaho PubLic Utilities Commission shag review and approve all electric utility fi'anchise agree- ments which include fees before they become effective. · The tetrn of the fi'anchise agreement between the elecu'ic utility and the city shall not be less than 20 nor mom than 50 years. Abse. m a change to state law, Idaho Pow~ would be willing to consider a fi-anc~ise agreement with a city provided it included these provisions. Q: What can a customer do about the franchise fee issue in his or her community? A: Idaho Power encourages ail of its customers to learn as much as possible about the issue and share their thoughts and ~ with their local represenmives and government officials. Idaho Power employees welcome your local Idaho Power office. g AN OI~INANCE CRANTINC A NONEXCLUSIVE I~,ANCltlS~ t ~O~TION, ~D TO iTS SUCCESSORS ~D ASSi~, ~0 ~NSTRUCT~ ~I~ATN AND .. OP~T~ IN ~D U~ON ~IE ~RESRNT P~CES ~ITIIIN T~E CO~O~T~ LIHITS O~.THE CI~ O~ ~A~T~F.~ ~DAHO, ELECTRIC ~ILI~ PROPER~ ~D FACILITIES ~R SUPPLYING ~L~RlCi~ ~D ELECTRIC SERVICE SU~E~I~O SUCH ELE~IC ~E~VICE DITIO~S ~VE~ING THE ~CIS~ ~e It Ordained ~ay~tt~ County~ idahos ~hatt " ~ Otlht~'~ its..: - ' - '/:-~:~':.-::-';" : · ".," .' ' ' . . . ..... -. ,: .'. ~--,(..~, ~, ,' · ..:'..,. ~rlntld h~llifli :.. , . . ,,. .. ~:.,~ .... · · . .~,- '' ' i,.' . r., ", ' ..'..' ' *'" · · '"' .... · . ~ ~ , . . ,, , '.. - ; OSU I #A~CE .O..gkm.