HomeMy WebLinkAboutSCG - So Cal Gas - Southern California Gas Company - 2005-02-07 2�,o zzub
Council/Agency Meeting Held: 52 -- D
Deferred/Continued to: L2r'
Approved ❑ Conditionally Approved ❑ Denied C y erk' ignature
Council Meeting Date: 2/7/2005 Department ID Number: FIN 05-01
CITY OF HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: HONORABLE MAYOR CITY COUNCIL MEMBERS
T
SUBMITTED BY: PENELOPE CU BRET -GRAFT, CITY 15MINISTRATOR Y
PREPARED BY: Dan T.Villella, Finance Officer = u
SUBJECT: Amend Ordinance 3117 -An Ordinance of the City of Huntington Beach,
Granting to Southern California Gas Company, a Corporation, the Right,
Privilege, and Franchise to Lay and Use Pipes and Appurtenances fay
Transmitting, Distributing, and Measuring Gas for Any and All Purposes
Under, Along, Across, or Upon the Public Streets, Ways, Alleys, and#RacA
as the Same May Now or Hereafter Exist, Within Said Municipality -yo
Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s)
Statement of Issue:
The City of Huntington Beach receives franchise revenue from Southern California Gas
Company (Sempra Energy Corporation). The current agreement has been in place since
1958 and was most recently amended in 1991_ In October, 2003, the Public Utilities
Corporation (PUC) issued Resolution G-3557, that changed the formula used to calculate
franchise revenue to Huntington Beach and all other cities in California. Payments under the
new agreement began in December, 2003. Sempra would like the City to amend Ordinance
3117 — "An Ordinance of the City of Huntington Beach Granting to Southern California Gas
Company, a Corporation, the Right, Privilege, and Franchise-to Lay and Use Pipes and
Appurtenances for Transmitting, Distributing, and Measuring Gas for Any and All Purposes
Under, Along, Across, or Upon the Public Streets, Ways, Alleys, and Places as the Same
May Now or Hereafter Exist, Within Said Municipality."
Funding Source: NIA. The City's consultant for franchise agreements, MBIA Muniservices
Company, and Southern California Gas Company state that this change is revenue neutral to
the Gity.
Recommended Action: Approve and adopt the proposed modification to City Ordinance
3117 to modify the City's franchise agreement with Sempra Energy.
Alternative Action(s): Reject the recommendation of Sempra Energy and pursue another
mutually-agreeable methodology of computing the franchise payment. Since this change is
revenue neutral to the City, it is unlikely that Sempra would accept any additional
modifications if they would have the potential to increase their costs. To date, every
California city with a franchise agreement with Sempra Energy, except for Huntington Beach
and Pasadena, has accepted this change.
G— \ c
! l
PROOF OF PUBLICATION
STATE OF CALIFORNIA)
) ss.
COUNTY OF ORANGE )
CITY OF HUNTINGTON
am a Citizen of the United States and a BEACH
LEGAL NOTICE
resident of the County aforesaid; I am ORDINANCE NO.3698
over the age of eighteen years, and not a AdWedbyt6(tyCwmil
on FEBRUARY 1,20M5
party to or interested in the below entitled "AN ORDINANCE OF THE
CITY OF HUNTINGTON
matter. I am a principal clerk of the BEACH AMENDING OR-
DINANCE N0. 3117
HUNTINGTON BEACH INDEPENDENT WHICH GRANTED TO
, SOUTHERN CALIFORNIA
a newspaper of general circulation GAS COMPANY THE
o FRANCHISE TO LAY AND
USE PIPES AND AP-
printed and published in the City of PURTENANCES FOR
TRANSMITTING, DIS-
Huntington Beach, County of Orange, TRIBUTING AND MEA-
SURING GAS fOR ANY
State of California, and that attached AND ALL PURPOSES."
SYNOPSIS:
Notice is a true and complete copy as THE CURRENTBEEN
IN
AGREE-
MENT HAS BEEN IN
PLACE SINCE 1958 AND
was printed and published in the WAS MOST RECENTLY
AMENDED IN 1991. IN
Huntington Beach issue of said OCTOBER 2003, THE
PUBLIC UTILITIES COR-
newspaper to wit the Issue(s) of: PORATION (PUC) IS-
SUED RESOLUTION G-
3557;THAT CHANGED
THE FORMULA USED TO
CALCULATE FRANCHISE
REVENUE TO HUN-
TINGTON BEACH AND
ALL OTHER CITIES IN
MARCH 3,2005 CALIFORNIA. THE RE-
VISIONS TO ORDI-
NANCE 3117 ALIGN
THE CITY WITH THE
INTENT OF THE PUC_
COPIES OF THIS OR-
DINANCE ARE AVAIL-
ABLE IN THE CITY
CLERK'S OFFICE.
PASSED AND ADOPTED
declare, under penalty of perjury, that by the City Council of
the City Huntington
Beach at
a regular'.,
the foregoing is true and correct. 22 2005 by he following
roll call vote:
AYES:Hansen,Coerper,
Sullivan,Hardy,Green,
Executed on MARCH 3,2005 ook
NOES:None
e
ABSENT:None
at Costa Mesa, California. This ordinance is ef-
fective 30 days after
adoption.
CITY OF
_ ✓ HUNTINGTON BEACH
2000 MAIN STREET
HUNTINGTON BEACH,
CA Signature 714 536 5227
_JOAN L.FLYNN,
CITY CLERK
Published Huntington
Beach Independent
March 3,2005 031-530
REQUEST FOR ACTION
MEETING DATE: 2/7/2005 DEPARTMENT ID NUMBER-FIN 05-01
Analysis:
The franchise agreement with the City is a complex calculation. There are many variables
including production costs, PUC regulations, State of California regulations, etc.
In December, 2003 Sempra Energy began using new PUC regulations to compute its
franchise agreement payments. This change resulted from PUC Resolution G-3557.
Huntington Beach was not notified of this change until December, 2004. Payments in 2004
were made using the new formula. Sempra would like the City to officially agree to the new
franchise language.
The rate that was used to calculate the "imputed revenue" on transportation only gas (gas
transported through the City, but not sold to customers in Huntington Beach) for the City of
Huntington Beach as well as all other municipalities under PUC directives was the Core
Subscription Weighted Average Cost of Gas (CS WACOG). The CS WACOG was eliminated
in December 2003 (January 2004 billings) due to the elimination of the core
subscription service contracts (non-core customers that elected to receive core service).
Those customers are now under core or non-core service depending on their volume of
usage. Due to the elimination of the CS WACOG, Sempra Energy was required to select a
new rate to calculate the imputed revenue. The new adjusted core procurement charge rate
(G-CPA) was created in December 2003. Sempra Energy and the PUC believe that the G-
CPA is equivalent to the old CS WACOG.
Staff is recommending that the City adopt revisions to ordinance 3117 that will align the City
with the intent of the PUC. Any new PUC or State regulations affecting the CS WACOG will
automatically be taken into the City's franchise rate without the need- for an additional
ordinance.
Environmental Status: NIA
Attachment(s):
City Clerk's
Page Number No. Description
1. Ordinance 3117 — An Ordinance of the City of Huntington Beach
Granting to Southern California Gas Company, a Corporation, the
Right, Privilege, and Franchise to Lay and Use Pipes and
Appurtenances for Transmitting, Distributing, and Measuring Gas for
Any and All Purposes Under, Along, Across, or Upon the Public
Streets, Ways, Alleys, and Places as the Same May Now or Hereafter
Exist, Within Said Municipality
2. Proposed Amendment to Ordinance 3117
3. Legislative Draft
4. Resolution G-3357 of the Public Utilities Commission
H:120051RCAGAS Franchise.doc -2- 1/21/2005 7.48 AM
ATTACHMENT # 1
ORDINANCE NO_ ----31 �Z-----
AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH
GRANTING TO SOUTHERN CALIFORNIA GAS COMPANY, A
CORPORATION, THE RIGHT, PRIVILEGE AND FRAe`iCHISE TO LAY AND USE
PIPES AND APPURTENANCES FOR TRANSMITTING, DISTRIBUTING AND
MEASURING GAS FOR ANY AND ALL PURPOSES UNDER, ALONG, ACROSS OR
UPON THE PUBLIC STREETS, WAYS, ALLEYS AND PLACES, AS .THE SAME NOW
OR MAY HEREAFTER EXIST_ WITHIN SAID MUNICIPALITY.
The City Council of the City of Huntington Beach does ordain as
follows:
SECTION ONE
Whenever in this ordinance the words or phrases
hereinafter in this section defined are used, they shall have the
respective Meanings assigned to them in the following definitions
(unless, in the given instance, the. context wherein they are used
shall clearly import a differ`n-, meaning)
(a) The word "Grantee" shall mean Southern California
Gas Company, and its lawful successors or assigns;
(b) The word "City" shall mean the City of Huntington
Beach, a municipal corporation of the State of California, in its
present incorporated form or in any latex reorganized,
consolidated or reincorporated forth;
(c) The word "streets" shall mean the public streets,
ways, alleys and places as the same now or may hereafter exist
within said City;
(d) The word "Engineer" shall mean the Director of
Public Works of the City;
(e) The word "Franchise" shall mean and include any
authorization granted hereunder in terms of a franchise,
privilege, permit, license or otherwise to lay and use pipes and
appurtenances for transmitting, distributing and measuring gas
for any and all purposes under, along, across or upon the public
streets, ways, alleys and places Ln the City, and shall include
and be in lieu of any existing or future City requirement to
obtain a license or permit for the privilege of transacting and
carrying on a business within the City.
(f) The word "gas" shall mean natural or artificial
gas, or a mixture of natural and artificial gas, and shall
include industrial gas as defined in Public Utilities Code
S6201. 3 ;
Page 2
(g) The phrase "pipes and appurtenances" shall mean
piper pipeline, main, service, trap, vent, vault, manhole, meter,
gauge, regulator, valve, conduit, appliance, attachment,
appurtenance and any other property located or to be located in,
upon, along, across, under or over the streets of the City, and
used or useful in transmitting, distributing or measuring gas.
(h) The phrase "lay and use" shall mean to lay,
construct, erect, install, operate, maintain, use, repair,
replace, or remove.
SECTION TWO
(a) That the right, privilege and franchise, subject
to each and all of the terms and conditions contained in this
ordinance, and pursuant to the provisions of Division 3 , Chapter
2 of the Public Utilities Code of the State of California, known
as the Franchise Act of 1937, and Article VI, Section 615 of the
City Charter of the City of Huntington Beach, be and the same is
hereby granted to Southern California Gas Company, a corporation
organized and existing under and by virtue of the laws of the
State of California, herein referred to as the "Grantee. " to lay
and use pipes and appurtenances for transmitting, distributing
and measuring gas for any and all purposes, under, along, across
or upon the streets of the City for a twenty (20) year term from J
and after the effective date hereof (January 1, 1990) .
SECTION THREE
(a) The Grantee shall pay to the City at the times
hereinafter specified, in lawful money of the United States, a
Franchise Fee annually which shall be equal to: i) two percent
(20) of the gross annual receipts of the Grantee derived from the
sale of gas within the limits of the City under this Franchise,
plus (ii) the "In Lieu Feel' of Section THREE (c) .
(b) The Franchise Fee shall be paid in four
installments, each installment being equal to two percent (2%) of
the total gross revenues of the preceding calendar quarter
employing the gross receipts formula, plus the amount of the In
Lieu Fee for the preceding calendar quarter. Each installment
shall be paid to the City on or prior to the twenty-fifth (25th)
day of the second month following the respective quarter for
which payment is made, except for the final quarterly payment for
the year, which shall be paid on or prior to March 25th. For
example, the installment for the first quarter of the year
(January through March shall be paid to the City on May 25th.
3117
----------
Page 3
Upon notice by City that payments shall be made in
accordance with subdivision (d) of this SECTION THREE, Grantee
shall pay the franchise fee calculated under SECTION THREE (d) in
installments as provided in the preceding paragraph, provided
that for the first year under SECTION THREE (d) the amount of
each of the first three installments shall be one-fourth of the
amount of the total annual fee due for the year under subdivision
(d) as estimated in good faith by Grantee, and the final yearly
payment shall be the actual balance due as provided by SECTION
THREE (d) .
Any overpayment shall be recovered by Grantee by setoff
against future installments, or, if the franchise has been
terminated, such overpayment, or the balance thereof, shall be
payable by City to Grantee upon written demand.
(c) The "In Lieu Feel' shall be equal to one and five-
tenths percent (1.5%) of the "imputed value" of "non-proprietary
gas" conducted, conveyed, transported, supplied and distributed
to the City and/or its inhabitants within the City per calendar
year, or fractional calendar year, during the term of this
franchise. As used- herein,
"non-proprietary gas" means gas that is conducted,
conveyed, transported, supplied and distributed, but
not sold, to the City and/or its inhabitants within the
City by Grantee;
"imputed value" means the product of the actual volumes
of such non-proprietary gas conducted, conveyed,
transported, supplied and distributed, but not sold, to
the City and/or its inhabitants within the City by
Grantee during the period of calculation times: (1)
until August 1, 1991, the average weighted cost of
"non-core gas" for such period; (2) after August,
1991, the average weighted cost (WACOG) of gas under
SoCalGas' procurement portfolio for all gas customers
shall apply;
"non-core gas" means that gas which, in accordance with
rules and directives adopted from time to time by the
Commission, is purchased by the Grantee to serve its
non-core classified commercial, industrial, utility
electrical generating and wholesale customers
(including, but not limited to, the category of
customers for which it also transports and delivers
non-proprietary gas within the City) , and currently
includes short-term discretionary gas purchased by
Grantee for such customers.
3117
Page 4
(d) In the event the legislature amends the Franchise
Act of 1937 (Public Utilities Code 56201 - 6302) or enacts any
K other state law which increases the franchise payment to general
law cities to a level greater than that provided in Section THREE
(a) above, then the City shall have the option of prospectively
employing the legislative formula, which shall apply for the
remaining term of this agreement. If the City .exercises said
option, the legislative formula shall be prospectively applied
hereto on the later of: a) the effective date of the
legislation, or b) January 1 of the calendar year in which the
City exercised said option.
(e) In the event that the "imputed value" cannot be
determined using the methodologies identified in Section THREE
(c) because such methodologies are no longer in use or no longer
reasonably reflect the imputed value of non-proprietary gas, the
City and Grantee shall agree upon a methodology that reasonably
reflects the value of such non-proprietary gas.
(f) In the event that the UEG plants within the City
have a combined annual "plant factor" of 50% or less or are not
operational in any calendar year, the City mdy elect to receive,
as its Franchise Fee for such year in lieu of the Franchise Fee
calculated in accordance with Sections THREE (a) and (c) ,
payments equal to four percent (4%) of the gross annual receipts
of Grantee arising from the use, operation or possession of said
f Franchisee. Notice of this election shall be provided to Grantee
no later than thirty (30) days prior to the date the final
payment is due for the calendar year in question (e.g. February
23 or 24 in a Leap Year) . The final yearly payment shall be the
actual balance due in accordance with this method.
(g) Any notices under this SECTION THREE shall be in
writing and be delivered by courier service or by certified mail,
return receipt requested, to the other party at the address shown
below or at such other address as the party may designate by
written notice delivered in the manner provided for herein:
City of Huntington Beach
P.O. Box 2740
2000 Main Street
Huntington Beach, California 92647
Attn: City Manager and City Attorney
Southern California Gas Company
810 South Flower Street
P.O. Box 3249
Los Angeles, CA 90051-1249
Attn: Tax and Ad Valorem Tax Manager
3117
Page 5
SECTION FOUR
(a) On or before the fifteenth day of March of each
calendar year during the term of this franchise and forty--five
(45) days after the expiration of the term of this franchise, the
Grantee shall file with the City Clerk of the City, the original,
and with the Director of Finance of the City, one copy of a
statement showing the following:
(1) The total gross revenue under SECTION-THREE
received by the Grantee from the operation of its
business in the City during the preceding calendar
year, or fractional calendar year.
(2) The method (and supporting calculations) used to
calculate the franchise fees which are payable to the
City in accordance with this franchise (i.e. , Franchise
Fee, In Lieu Fee, or fees of SECTION THREE (d) ] .
(3) The total amount of all quarterly installments
made by Grantee during the preceding calendar year or
fractional calendar year.
(4) Such other data or information as City may
t reasonably need to calculate or determine the amounts
which Grantee is obligated to pay City pursuant to
SECTION THREE, provided that the City shall request
such data and information from Grantee in writing and
shall deliver said request no less than 60 days prior
to the due date of the above-described statement.
(b) Said statement shall be verified by the General
Manager or authorized officer of the Grantee, and shall be in
such form and detail as from time to time shall be reasonably
prescribed by the Director of Finance.
(c) Within ten (10) days after the filing of said
statement, the Grantee shall pay to City, at the office of the
City Treasurer, in lawful money of the United States, the sums of
money required to be paid by Grantee to City under SECTION THREE
for the calendar year, or fractional calendar year, covered by
the statement, minus the sum of the quarterly installment amounts
paid for such calendar or fractional calendar year-
(d) Any neglect, omission or refusal by Grantee to
file the verified statement required under subsection (a) above,
or to pay any required payments under SECTION THREE at the time
and in the manner specified shall be grounds for the declaration
of a forfeiture of this franchise and of all rights and
privileges of Grantee hereunder, provided that Grantee shall not
have cured said neglect, omission, or refusal to file or pay
within twenty (20) days following written notice from the City of
3117
i
Page 6
such failure to file or pay, or, if such neglect, omission or
refusal is not reasonably subject to cure within such twenty (20)
day period, Grantee has not commenced to cure such neglect,
omission or refusal within such twenty (20) day period and has
not continued to prosecute such cure to completion. The
prevailing party in any action to collect or enforce SECTION
THREE and/or FOUR, shall be entitled to reasonable attorney's
fees.
SECTION FINE
This grant is made in lieu of all other franchises
owned by the Grantee, or by any successor of the Grantee to any
rights under this Franchise, for transmitting, distributing and
measuring gas within the limits of the City, as said limits now
or may hereafter exist, and the acceptance of the Franchise
hereby granted shall operate as an abandonment of all such
franchises within the limits of this City, as such limits now or
may hereafter exist, in lieu of which this Franchise is granted.
SECTION SIX
The Franchise granted hereunder shall not become
effective until written acceptance thereof shall have been filed
by the Grantee with the Clerk of the City. When so filed, such
acceptance shall constitute a continuing agreement of the Grantee
that if and when the City shall thereafter annex or consolidate
with additional territory, any and all franchise rights and
privileges owned by Grantee therein shall likewise be deemed to
be abandoned within the limits of such territory.
k
SECTION SEVEN
The Franchise granted hereunder shall not in any way or
to any extent impair or affect the right of the City to acquire i
the property of the Grantee hereof either by purchase or through €
the exercise of the right of eminent domain, and nothing herein
contained shall be construed to contract away or to modify or to 3
abridge, either for a term or in perpetuity, the City's right of
eminent domain in respect to the Grantee; nor shall this
Franchise ever be given any value before any court or other
public authority in any proceeding of any character in excess of
the cost to the Grantee of the necessary publication and any
other sum paid by it to the City therefor at the time of the
acquisition thereof.
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3117
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Page 7
s
SECTION EIGHT
(a) Grantee shall construct, install and maintain all
pipes and appurtenances in accordance with all of the ordinances,
rules and regulations theretofore, or hereafter adopted by the
legislative body of this City in the exercise of its police
powers and not in conflict with the paramount authority of the
State of California, and, as to State highways, subject to the
provisions of general laws relating to the location and
maintenance of such facilities;
(b) Grantee shall pay to the City, on demand, the cost
of all repairs to public property made necessary by any
operations of the Grantee under this Franchise;
(c) Grantee shall indemnify, defend, and hold harmless
the City and its officers from any and all liability for damages
proximately resulting from any operations under this Franchise;
and be liable to the City for all damages proximately resulting
from the failure of said Grantee well and faithfully to observe
and perform each and every provision of this Franchise and each
and every provision of Division 3, Chapter 2 of the California
Public Utilities Code and Article VI, SECTION 615 of the City
Charter of Huntington Beach.
(d) Upon abandonment of any of Grantee's facilities or
equipment located above or below the surface of any street,
Grantee shall notify the Engineer in writing of such abandonment
within ninety (90) days thereafter.
(e) City shall have the right to change the grade,
width or location of any street, or improve any street in any
manner, including but not limited to the laying of any sewer,
storm drain, conduit, water or other pipe, or construct and
install any pedestrian tunnel, traffic signal, street lighting
facility or other public improvement. If, in the opinion of the
Engineer, such work shall require a change in the position or
location of any of Grantee' s facilities or equipment, Grantee, at
its sole expense, within ninety (90) days after written notice
from the Engineer, shall commence the work of doing any and all
things to effect such change in position or location in
conformity with the Engineers' written instructions; provided,
however, that Grantee shall not be required to bear the expense
of such work done at the request of the City if and to the extent
that such request is on behalf, or for the benefit, of any
private developer or other non-governmental entity so long as no
expense, direct or indirect, results to the City. Nothing
herein, however, is intended to modify or limit the provisions of
Public Utilities Code §6297 (and as amended in the future) or the
judicial appellate decisions of the State of California
:$ interpreting Public Utilities Code §6297 (and as amended in the
future) .
3117
Page 8
(f) This franchise may not be transferred
(voluntarily, involuntarily, or by operation of law) , leased or
assigned by the grantee except by consent in writing of the City
Council, which shall not be unreasonably withheld or conditioned,
and unless the transferee or assignees thereof shall covenant and
agree to perform and be bound by each and all of the terms
hereof. The grantee shall file with the City Clerk and City
Administrator of the City within thirty (30) days after any sale,
transfer, assignment of lease of this Franchise, or any part
hereof, or of any of the rights or privileges granted hereby,
written evidence of the same, certified thereto by the Grantee or
its duly authorized officers.
SECTION NINE
(a) The City Treasurer, or any certified public
accountant, or qualified person designated by the City, at any
reasonable time during business hours, may make examination at
the Grantee's offices of its books, accounts, and records,
germane to and for the purpose of verifying the data set forth in
the statement required by SECTION FOUR hereof and to and for any
other purpose relating to the rendition of gas service by the
Grantee within the City, or the charges to be made therefor.
SECTION TEN
(a) The Engineer shall have the right to give the
Grantee such directions for the location of any pipes and
appurtenances as may be reasonably necessary to avoid sewers,
water pipes, conduits or other structures lawfully in or under
the streets; and before the work of constructing any pipes and
appurtenances is commenced by Grantee, the Grantee shall file
with said Engineer plans showing the location thereof, which
shall be subject to the approval of such Engineer (such approval
not to be unreasonably withheld) ; and all such construction shall
be subject to the inspection of said Engineer and done to his or
her reasonable satisfaction. All street coverings or openings of
traps, vaults, and manholes shall at all times be kept flush with
the surface of the streets; provided, however, that vents for
underground traps, vaults and manholes may extend above the
surface of the streets when said vents are located in parkways,
between the curb and the property line, and are not, in the
reasonable opinion of the Engineer, hazardous to the public.
(b) Where it is necessary to lay any underground pipes
through, under or across any portion of a paved or macadamized
street, the same, where practicable and economically reasonable
shall be done by a tunnel or bore, so as not to disturb the
foundation of such paved or macadamized street; and in the event
that the same cannot be so done, such work shall be done under a
3117
Page 9
permit to be granted by the Engineer upon application therefor,
` and grantee shall restore such street, or portion of street, to
as good a condition as existed before such work was done and such
restoration shall be completed to the reasonable satisfaction of
the Engineer.
SECTION ELEVEN
If any portion of any street shall be damaged by reason
of defects in any of the pipes and appurtenances maintained or
constructed under this grant, or by reason of any other cause
arising from the operation or existence of any pipes and
appurtenances constructed or maintained under
this grant, said Grantee shall, at its own cost and expense,
immediately repair any such damage and restore such portion of
street, to as good condition as existed before such defect or
other cause of damage occurred, such work to be done under the
direction of the Engineer, and to his or her reasonable
satisfaction.
SECTION TWELVE
(a) If the Grantee shall fail, neglect or refuse to
comply with any of the provisions or conditions hereof, and shall
not, within ten (10) days after written demand for compliance,
begin the work of compliance, or after such beginning shall not I
prosecute the same with due diligence to completion, then the
City, by its legislative body, may declare this Franchise
forfeited.
(b) The City may sue in its own name for the
forfeiture of this Franchise, in the event of noncompliance by
the Grantee, its successors or assigns, with any of the
conditions hereof.
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SECTION THIRTEEN
I
The Grantee shall pay to the City a sum of money
sufficient to reimburse it for all publication expenses incurred i -
by it in connection with the granting of this Franchise; such
payment to be made within thirty (30) days after the City shah.
furnish Grantee with a written statement of such expenses.
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3117
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Page 10
L f SECTION FOURTEEN
Not later than thirty (30) days after the publication i
of this ordinance, the Grantee shall file with the City Clerk a
written acceptance of the Franchise hereby granted, and an
agreement to comply with the terms and conditions hereof. '
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SECTION FIFTEEN 3
This ordinance shall take effect thirty (30) days after i
its adoption, and shall be deemed effective as of (January 1,
1990. The City Clerk shall certify to the adoption of this
ordinance and shall cause a synopsis of the same to be published
once in the Daily Pilot newspaper.
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.City Clerk Mayor
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`- I1V T l' D xls A R D:
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City Attorney
y 0ity A in' strator ,:
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3117
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Ord. No. 3117
STATE OF CALIFORNIA )
COUNTY OF ORANGE ss:
CITY OF HUNTINGTON BEACH
I, CONNIE BROCKWAY, the duly elected, qualified City
Clerk of the City of Huntington Beach and ex-officio Clerk of the
City Council of the said City, do hereby certify that the whole number
of members of the City Council of the City of Huntington Beach is seven;
i
that the foregoing ordinance was read to said City Council at a regular
meeting therof held on the 20th day of May
19 91 and was again read to said City Council at a regular
meeting therof held on the 3rd day of June 19 91 and
was passed and adopted by the affirmative vote of at least a majority of
all the members of said City Council.
AYES: Councilmembers:
MacAllister, Winchell , Silva, Green, Kell Robitaille Moulton-Patter-son
HOES: Councilmembers:
None
ABSENT: Councilmemb ers:
is
!, Cotmie BMW AY My Ct ERE cf the City of
HunW.in SKch and ex4fr6a Durk-c'fI7$ Cl,y E`
Cc:.kr[cii, :'a.hvrr5y certify that a synapsis of INS City Clerk and ex-officio Clerk
ardinarl.c n p LVIishe in{h;Dail Mtort of the City Coun
cil l of the City
of Huntington Beach, California
x ;In act^t
Gi;y Clack.
.'y try C�erit
.................
W
ATTACHMENT #2
ORDINANCE NO. -6 98
AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH
AMENDING ORDINANCE NO. 3117 WHICH GRANTED TO SOUTHERN
CALIFORNIA GAS COMPANY THE FRANCHISE TO LAY AND USE PIPES
AND APPURTENANCES FOR TRANSMITTING, DISTRIBUTING
AND MEASURING GAS FOR ANY AND ALL PURPOSES
The City Council of the City of Huntington Beach does hereby ordain as follows:
SECTION 1. That Section 3(c)of Huntington Beach Ordinance No. 3117 is hereby
amended to read as follows:
(c) The"In Lieu Fee"shall be equal to one and five-tenths percent(1.5%)of
the "imputed value" of"non-proprietary gas" conducted, conveyed, transported, supplied
and distributed to the City and/or its inhabitants within the City per calendar year, or
fractional calendar year, during the term of this franchise. As used herein,
"non-proprietary gas"means gas that is conducted, conveyed, transported,
supplied and distributed, but not sold, to the City and/or its inhabitants within the
City by Grantee;
"imputed value" means the product of the actual volumes of such non-proprietary
gas conducted, conveyed, transported,supplied and distributed, but not sold,to
the City and/or its inhabitants within the City by Grantee during the period of
calculation multiplied by the adjusted core procurement serve rate most recently
approved by resolution of the California Public Utilities Commission and as that
resolution may be later amended, so long as that rate reasonably reflects the
imputed value of non-proprietary gas;
"non-core gas"means that gas which, in accordance with rules and directives
adopted from time to time by the Commission, is purchased by the Grantee to
serve its non-core classified commercial, industrial, utility electrical generating
and wholesale customers (including,but not limited to,the category of customers
for which it also transports and delivers non-proprietary gas within the City), and
currently includes short-term discretionary gas purchased by Grantee for such
customers.
SECTION 2. Except as specifically modified herein, all other Sections and subsections
of Ordinance No. 3117 shall remain in full force and effect.
05 ord/aas franchise/]/l9/05 1
i
Ordinance No. 3698
SECTION 3. This ordinance shall become effective 30 days after its adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 22nddayof February - , 2005.
ATTEST:
APPROVED AS TO FORM-
q"n)-
V City Clerk
City Attorney
REVIEWED AND APPROVED:
INMA ED AND APPR VED-
Cit dministrator
irector of A ministrative Services
05 ord/gas franchise/1/24/05 2
Ord. No. 3698
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS.-
CITY OF HUNTINGTON BEACH }
1, JOAN L. FLYNN, the duly elected, qualified City Clerk of the City of
Huntington Beach, and ex-officio Clerk of the City Council of said City,do hereby
certify that the whole number of members of the City Council of the City of Huntington
Beach is seven; that the foregoing ordinance was read to said City Council at a regular
meeting thereof held on the 7th day of February, 2005,and was again read to said City
Council at a re ular meeting thereof held on the 22nd day of February,2005, and was
passed and adopted by the affirmative vote of at least a majority of all the members of
said City Council.
AYES: Hansen, Coerper, Sullivan, Hardy, Green, Bohr, Cook
NOES: None
ABSENT: None
ABSTAIN: None
1,Joan L.Flynn,CITY CLERK of the City of Huntington
Beach and ex-officio Clerk of the City Council,do hereby
certify that a synopsis of this ordinance has been
published in the Huntington Beach Fountain Valley
Independent on March 3,2005.
In accordance with the City Charter of said City
Joan L. Flynn,City Clerk Cit lerk and ex-officio Jk
Deputy City Clerk of the City Council of the City
of Huntington Beach, California
ATTACHMENT #3
ORDINANCE NO.
LEGISLATIVE DRAFT
(c) The "In Lieu Fee" shall be equal to one and five-tenths percent (1.5%) of
the "imputed value" of"non-proprietary gas" conducted, conveyed,transported, supplied
and distributed to the City and/or its inhabitants within the City per calendar year, or
fractional calendar year, during the term of this franchise. As used herein,
"non-proprietary gas"means gas that is conducted, conveyed, transported,
supplied and distributed,but not sold,to the City and/or its inhabitants within the
City by Grantee;
"imputed value"means the product of the actual volumes of such non-proprietary
gas conducted, conveyed, transported, supplied and distributed, but not sold, to
the City and/or its inhabitants within the City by Grantee during the period of
calculation (1)iififil August 1, l991the ghted eestofnen
eeTegas" or-sueh per-ied�(z) aftafter-Augpsl, 1991,thhe aver-age weigl4eaT,.-;R_t
shAl app4y multiplied by the adjusted core procurement serve rate
most recently approved by resolution of the California Public
Utilities Commission and as that resolution may be later
amended, so long as that rate reasonably reflects the imputed
value of non-proprietary gas;
"non-core gas"means that gas which, in accordance with rules and directives
adopted from time to time by the Commission, is purchased by the Grantee to
serve its non-core classified commercial, industrial, utility electrical generating
and wholesale customers (including, but not limited to, the category of customers
for which it also transports and delivers non-proprietary gas within the City), and
currently includes short-term discretionary gas purchased by Grantee for such
customers.
05 ord/gas franchise/IA9/05 3
ATTACHMENT #4
Y
. ' DEC
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
ENERGY DIVISION RESOLUTION G 33357 A
OCTOBER lb, 2003 RECEIVED
OCT 27 2003
R E S O L U T I O N TIRII•F AIM,
Resolution G-3357. Southern California Gas Company (SoCaiGas)
requests revisions to several tariff schedules to accommodate the ---
impending elimination of the core subscription tariff. SoCalGas's
request is approved.
AAA , .
By SoCalGas leas Advice Letter(AL) 3268, filed'.T. 1 2003.
�; 2 1 `,OW
tn,f:�ES CGNfVIESSION
SUMMARY
With the termination of Core Subscription service (G-CS), SoCalGas needs a new
mechanism to comply with the intent of PU Code Section 6353(b), which directs
gas utilities to determine the franchise fee surcharge for certain transportation
customers according to its "... tariffed core subscription weighted average cost of
gas (WACOG) exclusive of any California sourced franchise fee factor.""' The
franchise fee surcharge is used to collect funds to reimburse municipalities and
counties for the utility's use of public lands. The condition noted in the PU Code
is very soon to become inapplicable for SoCalGas as the last of its Core
Subscription contracts expires on December 1, 2003.
The Procurement Charge component of the G-CS rate has also been used as an
input in several other tariff schedules. In this AL, SoCalGas develops an
equivalent replacement for the G-CS Procurement Charge, to be called the
adjusted core procurement rate (Schedule G-CPA). This G-CPA is used in
calculating the municipal surcharge (Schedule G-MSUR), the Buy-Back rate for
Transportation Imbalance charges (Schedule G-IMB), the rate cap for utility -
payments to customers related to Voluntary Core Protection Purchase
Agreements (VCPPA) deliveries as defined in Rule 23; and purchases of storage
1 "Core subscription"i5 a service whereby a utility procures aas for noncore customers.
157993 1
Resolution G-3357 October 16, 2003
SoCalGas AL 3268/LOE
gas as defined in Rule 32. This Resolution approves the modifications to the
various tariff schedules necessary to accommodate the inmpending`termination of
the SoCalGas Core Subscription Service (Schedule G-CS).
BACKGROUND
Franchise Fee Surcharge:
The franchise fee surcharge was established in response to regulatory policies
which affected the amount collected by energy utilities to pay municipalities and
counties for the use of public lands in the course of i�zlillulg thezr service
obligations Sgecfzcay, the franchise fee sar�harge a �.s devzsed to " .. replace;
but not increase, franchise fees that would have been collected pursuant to this
division if not for changes in the regulatory environment such as the
"unbundling" of the gas industry.'3
SoCalGas collects the franchise fee surcharge from the appropriate gas
transportation customers under Schedule G-MSUR, as published in its tariff. The
schedule stipulates that the franchise fee surcharge applies to the volume of gas
sent over the utility's transportation system.
PU Code section 6353 (b) specifies that one determinant used to develop the
franchise fee surcharge for gas utilities is its "... tariffed core subscription
weighted average cost of gas (WACOG) exclusive of any California sourced
franchise fee factor." Until recently, SoCalGas was able to set the surcharge rate
in harmony with this statutory provision by using the Procurement Charge of the
Core Subscription rate. However, SoCalGas will terminate its Core Subscription
service on December 1, 2003.
'- Senate Bill 2,S(Stat. 1993,Ch. 233)
' See PU Code section 6350.
2
'Resolution G-3357 October 16, 2003
SoCalGas AL 3268/LOE
Termination of the Core Subscription rate:
In Decision (D.) 01-12-018 the Commission ordered SoCalGas to discontinue
Core Subscription service.{ Core Subscription service was closed to new
customers on January 1, 2002 and will be completely eliminated effective
December 1, 2003 as the last of the core subscription contracts expires. The
expiration of this rate necessitates a new mechanism to fulfill the intent of PI
Code 6353 (b).
The Core Subscription rate has also been used in the Buy-Back Rate associated
with the Transportation Imbalance.Service; Schedule G-TYiB, as well as in Rules
. 23 and 32. In Rule 23; the Core Subscription~rate is used.to cap the utility
payments to customers related to Voluntary Core Protection Purchase
Agreements (VCPPA) deliveries. In Rule 32 the Core Subscription rate is used to
value gas placed in storage.
Creation of New Rate:
In the instant filing, SoCalGas proposes a new rate, the adjusted Gas
Procurement Service rate (G-CPA), to take the place of the expiring Procurement
Charge of the Core Subscription rate. This rate is comprised of: (1) the Weighted
Average Cost of Gas (WACOG), as detailed in D.98-07-068; (2) authorized
franchise fees and uncollectible expenses; (3) Core Purchased Gas Account
(CPGA) adjustments; (4) Gas Cost Incentive Mechanism (GCIM)
rewards/penalties. It is exclusive of core storage withdrawals and authorized
core brokerage fees.
4 SoCalGas filed compliance AL 3100 on December 26, 2001 and AL 3100-A on January
28, 2002, discontinuing Core Subscription service. On February 27, 2003, the
Commission passed Resolution G-3334, denying nine ALs associated with D.01-12-018,
including AL 3100-A. The Commission explained in a follow-up letter that as a result of
the filings and Commission actions, AL 3100-A had gone into effect on January 1,2002
and gone out of effect on February 27, 2003. On April 1, 2003 SoCalGas tiled AL 3252
closing Core Subscription service and requesting an effective date of February 27, 2003.
This was approved on June 4, 2003. As fax as Core Subscription is concerned, the result
of this procedural flurry is that Core Subscription service has been continuously closed
to new customers since January 1, 2002.
3
Resolution G-3357 October 16, 2003
SoCalGas AL 3268/LOE
PG&E proposed the same methodology when it faced the termination of its core
subscription service last year. The Commission approved PG&E's proposal in
Resolution G-3326 on April 22, 2002.
NOTICE
Notice of AL 3268 was made by publication in the Commissions Daily Calendar. is
SoCalGas states that a copy of the Advice Letter was mailed and distributed in
accordance with Section III-G of General Order 96-A.
PROTESTS
Advice Letter AL 3268 was not protested.
DISCUSSION
We have reviewed the AL filing by SoCalGas and find that it complies with the
intent of PU Code 6353 (b) in correctly assessing the municipal surcharge. The
tariff changes to other schedules and rules correctly incorporate the new G-CPA
rate which was created to accommodate the elimination of Core Subscription
service.
COMMENTS
This is an uncontested matter in which the resolution grants the relief requested.
Accordingly, pursuant to PU Code 311(g)(2), the otherwise applicable 30-day
period for public review and comment is being waived.
FINDINGS
1. Pursuant to Commission orders, SoCalGas' Core Subscription service has _
been closed to new customers since January 1, 2002.
2. The last existing Core Subscription service contract will expire December 1,
2003.
3. PU Code Section 6353(b) directs gas utilities to determine the franchise fee
surcharge for certain transportation customers according to its "... tariffed
core subscription weighted average cost of gas (WACOG) exclusive of any
California sourced franchise fee factor."
4
Resolution G-3357 October 16, 2003
SoCalGas AL 3268/LOE
S
4. The impending termination of the Core Subscription service necessitates a
new way to comply with the intent of PU Code Section 6353(b) in Schedule
G-MSUR.
5. A new rate schedule is also required for Schedules G-IMB and for Rule 23
and Rule 32 to acconznlodate the elimination of the Core Subscription
Procurement Charge.
6. In the instant tiluig, SoCalGas proposes a new rate, the adjusted Gas
Procurement Service rate (G-CPA), to take the place of the expiring
Procurement Charge of the Core Subscription rate. This rate is comprised of:
(1) the Weighted Average Cost of Gas (WACOG), as detailed in D.98-07-068;
(2) authorized franchise,fees and uncollectible expenses; (3) Core Purchased
Gas Account (CPGA) adjustments; (41)'Gas Cost Incentive Mechardsm (GC'Evi)
rewards/penalties. It is exclusive of core storage withdrawals and
authorized core brokerage fees.
7. In Resolution G-3326, the Commission approved a similar proposal by PG&E
when it faced the termination of its core subscription service.
8. The instant tiling complies with the intent of PU Code 6353 (b) in correctly
assessing the municipal surcharge.
9. The tariff changes to other schedules and rules correctly incorporate the new
G-CPA rate which was created to accommodate the elimination of Core
Subscription service.
THEREFORE IT 1S ORDERED THAT:
1. The request of SoCalGas in AL 3268 to create a new adjusted Core
Procurement service rate, equivalent to and replacing the Procurement
Charge of the Core Subscription rate, is approved.
5
Resolution G-3357 October 16, 2003
SoCalGas AL 3268/LOE
This Resolution is effective December 1, 2003.
I certifv that the foregoing resolution was duly introduced, passed and adopted
at a conference of the Public Utilities Commission of the State of California held
on October 16, 2003; the following Commissioners voting favorably thereon:
WI LIAMAHERh:
Executive Director
MICHAEL R. PEEVEY
President
CARL W. WOOD
LORETTA M. LYNCH
GEOFFREY F. BROWN E
SUSAIN P. KENNEDY
Commissioners
E
I
6
RCA ROUTING SHEET
INITIATING DEPARTMENT: Administrative Services
SUBJECT: Revision to Franchise Ordinance 3117 wiSempra Energy
COUNCIL MEETING DATE: February 7, 2005
RCA ATTACHMENTS STATUS
Ordinance (w/exhibits & legislative draft if applicable) Attached
Not Applicable ❑
Resolution (w/exhibits & legislative draft if applicable) Attached ❑
Not Applicable ❑
Tract Map, Location Map and/or other Exhibits Attached ❑
Not Applicable ❑
Attached ❑
Contract/Agreement (w/exhibits if applicable) Not Applicable ❑
(Signed in full by the City Attorney)
Attached ❑
Subleases, Third Party Agreements, etc. Not Applicable ❑
(Approved as to form by City Attorney)
Certificates of Insurance (Approved b City Attorne Attached ❑
( pp y the y y� Not Applicable ❑
Attached ❑
Fiscal Impact Statement (Unbudget, over$5,000) Not Applicable ❑
Attached ❑
Bonds (If applicable) Not Applicable ❑
Attached ❑
Staff Report (if applicable) Not Applicable ❑
Commission, Board or Committee Re ort applicable If a Attached El
p ( pp ) Not Applicable ❑
s/Conditions for Approval and/or Denial Attached ❑
Finding pp Not Applicable ❑
E PLAN '1 I N FOR MI SI G ATTACHii ENTs
REVIEWED iETURNEA FORWARQED
Administrative Staff )
Assistant City Administrator(initial)
City Administrator(initial)
( )
City Clerk
EXPLANATION FOR RETURN OF ITEM:
s �
Only)
RCA Author: Robert 5edlak