§ 12-10. Gas Franchise.

(a)

Franchise History and Location in City Code. A franchise to the Minneapolis Gas Company was passed by the Council as Chapter 85, Ordinance 62-12, on November 27, 1962, published in the official newspaper on January 17, 1963, and accepted by the Minneapolis Gas Company on February 8, 1964. This franchise expired by its terms on January 1, 1983 but was renewed by Ordinance No. 84-9. The franchise granted by Ordinance No. 84-9 expired by its terms on June 30, 2003, but was replaced by Ordinance No. 03-08 prior to its expiration. Reference to the gas franchise appears in Chapter 12 of the City Code and the franchise itself is Appendix G of the City Code.

(b)

Definitions. For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings:

(1)

City. The City of New Hope, County of Hennepin, State of Minnesota.

(2)

City Utility System. Facilities used for providing public utility service owned or operated by City or agency thereof, including, but not limited to sewer, storm sewer, water service, street lighting, traffic signals, and all necessary equipment and appurtenances required to provide utility services.

(3)

Commission. The Minnesota Public Utilities Commission, or any successor agency or agencies, including an agency of the federal government, which preempts all or part of the authority to regulate gas retail rates now vested in the Minnesota Public Utilities Commission.

(4)

Company. CenterPoint Energy Minnegasco, a division of CenterPoint Energy Resources Corp., a Delaware corporation, its successors and assigns including all successors or assigns that own or operate any part or parts of the Gas Facilities subject to this franchise.

(5)

Gas Facilities. Gas transmission and distribution pipes, lines, ducts, fixtures, and all necessary equipment and appurtenances owned or operated by the Company for the purpose of providing gas energy for public or private use.

(6)

Gas. Natural gas, manufactured gas, mixture of natural gas and manufactured gas or other forms of gas energy. "Gas" includes Gas that is:

a.

Manufactured by the Company or its affiliates and delivered by the Company;

b.

Purchased and delivered by the Company; or

c.

Purchased from another source by the retail customer and delivered by the Company.

(7)

Non-Betterment Costs. Costs incurred by Company from relocation, removal or rearrangement of Gas Facilities that do not result in an improvement to the Gas Facilities.

(8)

Notice. A writing served by any party or parties on any other party or parties. Notice to Company shall be mailed to CenterPoint Energy Minnegasco, V.P., Regulatory & Supply Service, 800 LaSalle Avenue, Minneapolis, MN 55402-2006. Notice to the City shall be mailed to the City Manager, City of New Hope, 4401 Xylon Avenue North, New Hope, MN 55428. Any party may change its respective address for the purpose of this Ordinance by written notice to the other parties.

(9)

Public Way. Public right-of-way within the City as defined in Minn. Stat. § 237.162, subd. 3.

(10)

Public Ground. Land owned or otherwise controlled by the City for park, open space, utility easements, or similar public purpose, which is held for use in common by the public. "Public Ground" specifically includes any property now owned or hereafter purchased by the City for redevelopment purposes.

(11)

ROW Ordinances. "ROW Ordinances" means:

a.

The City's Right of Way Management Ordinance located at Section 6-14, et. seq. of the City Code;

b.

All other applicable City ordinances and regulations; and

c.

All other applicable permit procedures and customary practices of the City.

(c)

Adoption of Franchise.

(1)

Grant of Franchise. City hereby grants Company, the right to import, manufacture, distribute and sell gas for public and private use within and through the limits of the City as its boundaries now exist or as they may be extended in the future.

(2)

Commencement of the Franchise Duration. The franchise duration shall commence running on the date this Ordinance is passed and approved by the City,

(3)

Franchise Duration. The franchise shall run for 5 years from the commencement date.

(4)

Effective Date; Written Acceptance. This franchise shall be in force and effect from and after its passage of this Ordinance and publication as required by law and its acceptance by Company. If Company does not file a written acceptance of this franchise as passed by the City with the City within 60 Days after the commencement date this Ordinance shall be deemed refused. Upon refusal the City Council may either repeal this ordinance or seek its enforcement in a court of competent jurisdiction.

(5)

Automatic Renewal of the Franchise Duration. The franchise duration shall automatically renew for an additional 5 years on the fifth, tenth and fifteenth anniversaries of the commencement date unless notice is given to the contrary. Notice of non-renewal must be in writing. Either the City or Company may give notice of non-renewal. Notice of non-renewal must be given at least 90 days prior to the end of the then current franchise duration.

(6)

Expiration Discussions. On the nineteenth anniversary of the commencement date the parties will meet and discuss renewal of this franchise agreement.

(7)

Gas Facilities. Company may construct, operate, repair and maintain Gas Facilities in, on, over, under and across the Public Ways and Public Grounds, subject to the provisions of this Ordinance.

(8)

Use of Franchise. Subject to the City's lawful regulation, Company may do all reasonable things necessary or customary to accomplish the purpose of this franchise. "Lawful regulations" mean:

a.

All City ordinances as they exist at the commencement of this franchise;

b.

All future amendments to current City ordinances (subject to the notice and negotiation provisions of this franchise);

c.

All future new City ordinances (subject to the notice and negotiation provisions of this franchise); and

d.

The permit procedures and customary practices of the City.

(9)

Ordinance Changes. The Company shall be notified 60 days in advance of proposed changes to Section 6-14, et. seq. of the City Code. If such change interferes with this franchise, the City and Company shall negotiate in good faith to reach mutually acceptable changes. If the City and Company are unable to agree, disputes will be handled under the terms of Dispute Resolution Section of this Ordinance. Changes enacted prior to completion of the dispute resolution provided for in this franchise shall be effective as to all persons, entities and other franchises, but shall only become effective as to this franchise upon completion of and in accordance with the dispute resolution. Lack of notice shall not be a defense to non-compliance with a change that does not interfere with this franchise.

(10)

Ordinance Conflicts. If a provision of ROW Ordinances conflicts with a provision on the same subject in this Ordinance, this Ordinance will control.

(11)

Non Exclusive Franchise. This ordinance does not grant an exclusive franchise.

(12)

Legal Fees. Each party is responsible for its own legal fees incurred related to granting of this franchise.

(13)

Service and Gas Rates. The service to be provided and the rates to be charged by Company for gas service in City are subject to the jurisdiction of the Commission.

(14)

Publication Expense. The expense of publication of this Ordinance shall be paid by Company.

(15)

Dispute Resolution. If either party asserts that the other party is in default in the performance of any obligation hereunder, the complaining party shall notify the other party of the default and the desired remedy. The notification shall be written. Representatives of the parties must promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the dispute is not resolved within 30 days of the written notice, the parties may jointly select a mediator to facilitate further discussion. The parties will equally share the fees and expenses of this mediator. If a mediator is not used or if the parties are unable to resolve the dispute within 30 days after first meeting with the selected mediator, either party may commence an action in District Court to interpret and enforce this franchise or for such other relief permitted by law.

(16)

Continuation of Franchise. If the City and the Company are unable to agree on the terms of a new franchise by the twentieth anniversary of the commencement date, this franchise will remain in effect until a new franchise is agreed upon, or until 90 days after the City or the Company serves written Notice to the other party of its intention to allow the franchise to expire.

(d)

Location, Other Regulations.

(1)

Location of Facilities. Subject to ROW Ordinances, Gas Facilities in the Public Ways and Public Grounds shall be located, constructed, and maintained so as not to disrupt normal operation of any City Utility System, customary traffic, travel and the use of the Public Way and Public Ground. Gas Facilities may be located on Public Ways and Public Grounds as determined by the City.

(2)

Restoration of Public Ways and Public Ground. Restoration of the Public Way shall be subject to ROW Ordinances. After completing work requiring the opening of Public Ground, the Company shall restore the Public Ground to as good a condition as formerly existed, and shall maintain the surface in good condition for two (2) years thereafter. All work shall be completed as promptly as weather permits. If Company shall not promptly perform and complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground in the said condition and after demand to Company to cure, City shall, after passage of a reasonable period of time following the demand, but not to exceed three (3) business days, have the right to make the restoration of the Public Ground at the expense of Company. Company shall pay to the City the cost of such work done for or performed by the City, including administrative expense and overhead, plus ten percent of cost and administrative expense. This remedy shall be in addition to any other remedy available to the City for noncompliance with this Section.

(3)

Non-Waiver of Performance Security. The City reserves all rights under ROW Ordinances to enforce Company performance requirements for work in the Public Way or Public Ground.

(4)

Avoid Damage to Gas Facilities. Nothing in this Ordinance relieves any person from liability arising out of the failure to exercise reasonable care to avoid damaging Gas Facilities while performing any activity.

(e)

Relocations.

(1)

Relocation of Gas Facilities. Relocation of Gas Facilities in Public Ways and upon Public Grounds shall be subject to ROW Ordinances and shall comply with any other applicable City ordinances. City may require Company at Company's expense to relocate or remove its Gas Facilities from Public Ways or from Public Grounds upon a finding by City that the Gas Facilities have become or will become an impairment to the existing or proposed use of the Public Ways or Public Grounds.

(2)

Projects with Federal Funding. Relocation, removal, or rearrangement of any Company Gas Facilities made necessary because of the extension into or through City of a federally aided state trunk highway project shall be governed by the provisions of Minnesota Statutes Section 161.46, as supplemented or amended. City shall not order Company to remove or relocate its Gas Facilities when a Public Way is improved or realigned because of a renewal or a redevelopment plan which is financially subsidized in whole or in part by the Federal Government or any agency thereof, unless agreement is made that the reasonable Non-Betterment Costs of such relocation and the loss and expense resulting therefrom will be paid to Company when available to the City. The City need not pay those portions of such for which reimbursement to it is not available.

(3)

No Waiver. The provisions of Section (e) apply only to Gas Facilities:

a.

Located on Public Ways;

b.

Located on Pubic Grounds;

c.

Constructed in reliance on a permit or franchise from City, or

d.

Maintained in reliance on a permit or franchise from City.

Company does not waive its rights under an easement or prescriptive right or State or County permit.

(f)

Change In Form of Government. Any change in the form of government of the City shall not affect the validity of this Ordinance. Any governmental unit succeeding the City shall, without the consent of Company, succeed to all of the rights and obligations of the City provided in this Ordinance.

(g)

Franchise Fee. Franchise Fees. The City reserves all rights under Minn. Stat. § 216B.36, to require a franchise fee at any time during the term of this franchise. If the City elects to require a franchise fee it shall notify Company. The franchise fee shall be set forth in a separate ordinance. The separate ordinance adopting a franchise fee shall not be adopted until at least 60 days after Notice of the proposed ordinance has been served upon the Company.

(h)

Limitation on Applicability; No Waiver. This Ordinance constitutes a franchise agreement between the City and its successors and the Company and its successors and permitted assigns, as the only parties. No provision of this franchise shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person as a third party beneficiary of the agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. This franchise agreement shall not be interpreted to constitute a waiver by the City of any of its defenses of immunity or limitations on liability under Minnesota Statutes, Chapter 466.

(i)

Amendment Procedure. Either party to this franchise agreement may at any time propose that the agreement be amended. This Ordinance may be amended at any time by the City passing a subsequent ordinance declaring the provisions of the amendment, which amendatory ordinance shall become effective upon the filing of Company's written consent thereto with the City Clerk within 60 days after the effective date of the amendatory ordinance. An ordinance passed by the City for the purpose of updating City Code references to Minnesota Statutes or other laws shall not constitute an amendment to this franchise.

(j)

Previous Franchises Superseded. This franchise supersedes and replaces previous franchises granted to the Company or its predecessors. Upon Company's acceptance of this franchise the previous franchise shall terminate.

(k)

Indemnification and Defense. The Company shall indemnify, keep and hold the City, its elected officials, officers, employees, and agents free and harmless from any and all claims and actions (including reasonable attorneys' fees incurred by the City) on account of injury or death of persons or damage to property occasioned by the construction, maintenance, repair, removal, or operation of the Company's property located in, on, over, under, or across the Public Ways or Public Ground of the City, unless such injury or damage is the result of the negligence of the City, its elected officials, employees, officers, or agents. The City shall not be entitled to reimbursement for its costs incurred prior to notification to the Company of claims or actions and a reasonable opportunity for the Company to accept and undertake the defense. If a claim or action shall be brought against the City under circumstances where indemnification applies, the Company, at its sole cost and expense, shall defend the City if written notice of the claim or action is promptly given to the Company within a period wherein the Company is not prejudiced by lack of such notice. The Company shall have complete control of such claim or action, but it may not settle without the consent of the City, which shall not be unreasonably withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise available to the City, and the Company in defending any action on behalf of the City shall be entitled to assert every defense or immunity that the City could assert in its own behalf.

(l)

Severability. If any portion of this franchise is found to be invalid for any reason whatsoever, the validity of the rest of this franchise shall not be affected.

(m)

Additional Costs. Company shall reimburse City for any additional costs incurred by the City under the following circumstances:

a.

The additional costs are caused in part by inaccuracies in information provided by Company to City regarding the placement of Gas Facilities; and

b.

The additional costs could have been avoided or reduced had the information provided to the City been accurate.

This provision specifically contemplates, but is not limited to, additional costs incurred by the City due to delays in construction projects because Gas Facilities could not be accurately located in advance. In the event that the Gas Facilities are not the sole cause of any such additional costs, the additional costs shall be pro rated by the City in a reasonable manner and the Company shall only be liable for its pro rated share.

(Ord. No. 03-08, § 2, 4-14-2003)