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Home My WebLink AboutOrd. 1147 Franchise Fee - Centerpoint EnergyCITY OF APPLE VALLEY ORDINANCE NO. 1147 AN ORDINANCE IMPOSING AND IMPLEMENTING A GAS UTILITY SERVICE FRANCHISE FEE ON THE FOLLOWING COMPANIES PURSUANT TO THEIR RESPECTIVE FRANCHISE AGREEMENT WITH THE CITY OF APPLE VALLEY FOR PROVIDING GAS SERVICE WITHIN THE CITY OF APPLE VALLEY: CENTERPOINT ENERGY RESOURCES CORP., DB/A CENTERPOINT ENERGY, A MINNESOTA CORPORATION, ITS SUCCESSORS AND ASSIGNS; AND The City Council of the City of Apple Valley, Dakota County, Minnesota, ordains: Section 1. Chapter 119 of the Apple Valley City Code is amended by adding Section 119.62 to read as follows: Section 1. Purpose. The Apple Valley City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide gas, electric, or both services within the City of Apple Valley. Pursuant to duly adopted Ordinances, Franchise Agreement between the City of Apple Valley and CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Minnesota Gas ("Company"), its successors and assigns and the City has the right to impose a franchise fee on the Company. See Exhibit A for identification of each Franchise Ordinance. The term "Company" as used herein shall mean and refer to each of the foregoing identified franchisee and the terms set forth shall apply to each of the franchisee independently, but equally. Section 2. Terms. A franchise fee is hereby imposed on the Company under its gas franchise in accordance with the amount and fee design set forth in the fee schedule attached as Exhibit B to this Ordinance, commencing with the Company's October 2025, billing month. This fee is a meter -based fee for each account holder. In the event that an account holder covered by this ordinance has more than one meter at a single premise, the fee shall be assessed for each meter for that account. If a premise has two or more meters being billed at different rates, the Company may have an account for each rate classification, which will result in more than one franchise fee assessment for gas service to that premise. If the Company combines the rate classifications into a single account, the franchise fee assessed to the account will be the largest franchise fee applicable to a single rate classification for energy delivered to that premise. In the event any account holder(s) covered by this ordinance have more than one premise, each premise (address) shall be subject to the appropriate fee. In the event a question arises as to the proper fee amount for any premises, the Company's manner of billing for energy used at all similar premises in the city will control. Section 3. Payment and Fee Modification. The franchise fee shall be payable in January, April, July, and October of each year and each 3-month billing period shall be based on the amount collected by the Company during complete billing months during the period for which payment is to be made. The payment shall be due the last business day of the month following the period for which the payment is made. Such fee shall not exceed any amount that the Company may legally charge to its customers prior to payment to the City by imposing a surcharge equivalent to such fee in its rates for gas service. The franchise fee may be increased or decreased by ordinance from time to time, however any such change may not occur more often than annually. No franchise fee shall be payable by Company if Company is legally unable to first collect an amount equal to the franchise fee from its customers in each applicable class of customers by imposing a surcharge in Company's applicable rates for gas service. Company may pay the City the fee based upon the surcharge billed subject to subsequent reductions to account for uncollectables, refunds and correction of erroneous billings. Company agrees to make its records available for inspection by the City at reasonable times provided that the City and its designated representative agree in writing not to disclose any information which would indicate the amount paid by any identifiable customer or customers or any other information regarding identified customers that is non- public by law. Section 4. Surcharge. The City recognizes that the Minnesota Public Utilities Commission may allow the Company to add a surcharge to customer rates of city residents to reimburse the Company for the cost of the franchise fee imposed herein. The Company agrees that it is prohibited from adding an administrative fee of any kind on to the franchise fee. Section 5. Enforcement. Any dispute, including enforcement of a default regarding this ordinance will be resolved in accordance with the provisions of the Franchise Ordinance/Agreement. Section 6. Mandatory 5 Year Review. This Ordinance shall be reviewed by the City Council at least once within every five-year period to ensure that the Ordinance's purpose is being met. Section 7. Filing. The City Clerk shall file a copy of this Ordinance in the Office of the City Clerk, which copy shall be available for inspection by any persons during regular office hours. Section 8. Publication. The City Clerk shall publish this Ordinance in the official newspaper of the City with notice that a printed copy of the Ordinance is available for inspection by any person during regular office hours at the Office of the City Clerk. Section 9. Effective Date of Franchise Fee. The effective date of the franchise fee under this Ordinance shall be October 1, 2025, with the first billing period fee due and payable on January 31, 2026, or ninety (90) days after the City sends written notice enclosing a copy of this adopted Ordinance to the Company by certified mail, whichever date is later. This Ordinance does not nullify or cancel the franchise fee imposed upon the Company pursuant to Ordinance No. 1140 (City Code Section 119.61) to the extent of the franchise fee imposed in the amount and fee design thereunder through September 30, 2025. The franchise fee(s) due and owing 2 EXHIBIT A This Franchise Fee Ordinance applies to the following public utility companies that provide natural gas services within the City of Apple Valley pursuant to the following Franchise Agreements: The Franchise Agreement between the City of Apple Valley and CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Minnesota Gas, its successors and assigns is pursuant to City Ordinance No. 1138, effective February 14, 2025. 0 EXHIBIT B The following is the fee rate schedule for the Franchise Fee(s) imposed under this Ordinance: Customer Classification Monthly Fee Amount per Customer* Residential Firm A Firm B Firm C Small Volume, Dual Fuel A ("SVDF A") Small Volume, Dual Fuel B ("SVDF B") Large Volume, Firm and Dual Fuel ("LVDF") *Fee rate is per meter per month within the City. 3% of gross revenues per month 3% of gross revenues per month 3% of gross revenues per month $ 35.00 per month $ 3 5.00 per month $ 35.00 per month $ 35.00 per month Franchise fees are to be collected monthly by the Company in the amounts set forth in the above schedule, and remitted to the City on a quarterly basis as set forth herein: January — March collections due by April 30. April — June collections due by July 31. July — September collections due by October 31. October — December collections due by January 31. pursuant to Section 119.61 remains due and owing and does not merge with this Ordinance. Section 10. Effective Date of this Ordinance. This ordinance becomes effective from and after its passage and publication. PASSED this 1 Oth day of July, 2025. 0 4A Clint 1 ooppaw, Mayo ATTEST: 04A ## "�� Christina M. Scipioni, City erk r i i• City of Apple Valley i• • •• City Clerk's Office 7100 147th Street W. Apple Apple Valley, MN 55124 Phone: (952)953-2500 Valley Fax: (952)953-2515 July 11, 2025 July 11, 2025 CenterPoint Energy Via Certified Mail Attn: Brad Steber 505 Nicollet Mall Minneapolis, MN 55402 Dear Mr. Steber, At its July 10, 2025, meeting, the Apple Valley City Council approved the following ordinance: • Ordinance No. 1147 Imposing and Implementing a Gas Utility Service Franchise Fee Ordinance No. 1147 imposes and implements a gas utility service franchise fee effective October 1, 2025. A copy of this ordinance is being mailed to you in conformance with Apple Valley City Code Chapter 119.62 Section 9. Sincerely, fifi Christina M. Scipioni City Clerk 952-953-2506 Enclosure Copy: Matt Saam, Public Works Director Sharon Hills, City Attorney 9. applevalleymn.gov