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HomeMy WebLinkAbout2014 03 10 Public Hearing 503 Duke Energy Franchise Agreement, Ordinance 2014-07 First Reading COMMISSION AGENDA     Informational Consent ITEM503 Public Hearings X Regular       March 10, 2014KSKL Regular MeetingCity ManagerDepartment         REQUEST: The City Manager and City Attorney request that the City Commission consider adopting Ordinance No. 2014-07 granting a new franchise to Duke Energy Florida, Inc. for a term of 10 yearsto provide electric utility service within the City of Winter Springs.   SYNOPSIS: The City’s current electric franchise with Duke Energy expires on April 1, 2014.  Over the past several months, City Staff has been negotiating the terms and conditions of a new electric franchise agreement with representatives of Duke Energy.  Public electric utilities are primarily regulated by the Public Service Commission who has exclusive jurisdiction over public electric utilities.  However, municipalities may still require an electric utility to obtain a franchise from the municipality and pay a franchise fee.  Ordinance No. 2014-07 proposes the adoption of a new electric franchise.  The new franchise is for a ten year period.  The Ordinance is substantially different than the current electric franchise.  Importantly, the new franchise modifies the way the franchise fee is calculated.  This modification may potentially increase revenue to the City by approximately $72,000 annually because industrial customers and City sponsored street lights will now be included in the franchise fee calculation and, additionally, Duke Energy will no longer receive a credit for City ad valorem taxes paid annually by the company.  The other terms of the franchise are more specifically set forth in Ordinance 2014-07.  Duke Energy representatives have expressed that the terms and conditions set forth in Ordinance No. 2014-07 are acceptable and that the company is prepared to execute the Ordinance. CONSIDERATIONS: 1.   The current electric utility service franchise was established by City of Winter Springs Public Hearings 503 PAGE 1 OF 4 - March 10, 2014 Ordinance No.290, adopted on March 27, 1984, and amended by Ordinance No. 297, adopted June 26, 1984 (“Current Franchise Agreement”).  The Current Franchise Agreement has a term of thirty (30) years and expires on April 1, 2014.   2.   Electric utility companies are heavily regulated by the Florida Public Service Commission (PSC).  The jurisdiction conferred upon the PSC shall be exclusive and superior to that of all other boards, agencies, political subdivisions, municipalities, towns, villages, or counties, and, in case of conflict therewith, all lawful acts, orders, rules, and regulations of the PSC shall in each instance prevail. §366.04(1), Fla. Stat. (2013).   3.  Specifically related to electric utilities, the PSC, in the exercise of its jurisdiction, shall have power over electric utilities for the following purposes:   (a) To prescribe uniform systems and classifications of accounts.   (b) To prescribe a rate structure for all electric utilities.   (c) To require electric power conservation and reliability within a coordinated grid, for operational as well as emergency purposes.   (d) To approve territorial agreements between and among rural electric cooperatives, municipal electric utilities, and other electric utilities under its jurisdiction. However, nothing in this chapter shall be construed to alter existing territorial agreements as between the parties to such agreements.   (e) To resolve, upon petition of a utility or on its own motion, any territorial dispute involving service areas between and among rural electric cooperatives, municipal electric utilities, and other electric utilities under its jurisdiction. In resolving territorial disputes, the commission may consider, but not be limited to consideration of, the ability of the utilities to expand services within their own capabilities and the nature of the area involved, including population, the degree of urbanization of the area, its proximity to other urban areas, and the present and reasonably foreseeable future requirements of the area for other utility services.   (f) To prescribe and require the filing of periodic reports and other data as may be reasonably available and as necessary to exercise its jurisdiction hereunder. § 366.04(2), Fla. Stat. (2013).   4.   Notwithstanding the PSC’s jurisdiction, the City has the authority to levy a municipal tax and franchise tax on an electric utility providing electric service within the City.  §366.13, Fla. Stat. (2013).  The City may also require the electric utility to have a franchise and pay a franchise fee.  See e.g, Florida Power Corp. v. City of Winter Park, 887 So. 2d st 1237 (Fla. 2004); Santa Rosa County v. Gulf Power Company, 635 So. 2d 96 (Fla. 1 DCA 1994).    5.  Winter Springs City Charter requires that all franchises approved by the City be adopted by Ordinance.  §4.14(4), Winter Springs City Charter.   6.   The proposed new franchise materially differs from the Current Franchise Agreement as Public Hearings 503 PAGE 2 OF 4 - March 10, 2014 follows: A.  The formula for calculating the franchise fee owed to the City is significantly revised and will result in the City receiving additional franchise fee revenue.  Specifically, as explained in more detail in the Fiscal Impact Section, the base revenue definition is expanded to include utility revenue generated from industrial customers and City sponsored street lights.  In addition, City ad valorem taxes paid by the electric utility will no longer be deducted from the gross amount of the franchise fees owed the City.  It is estimated that this changes could result in an increase of gross franchise fees paid to the City of $6,000 per month/$72,000 per year.  However, the gross franchise fees collected by the City are off-set by the amount of franchise fees that the City actually pays on its electric utility invoice due to the collection method utilized by the electric utility to proportionately spread the franchise fee required to be paid to the City over the entire electric utility customer base within the City including the City.   B.  The City will receive the benefit of a “Favored Nations Clause” which mainly provides that in the event the electric utility company hereafter accepts an electric utility franchise ordinance from any municipality providing for the payment of a franchise fee in excess of that provided for in the Winter Springs’ Ordinance, the City will receive the benefit of the higher franchise fee.  \[e.g. 6% rate and “base revenue” definition\]   C.  The Term is for ten (10) years and will commence on March 24, 2014.   D.  Section 4 memorializes in substantial form a right-of-way permit process which the City and the electric utility have mutually agreed to in recent years.   E.   An annual service review meeting will be required between the City and the electric utility to discuss electric service related issues including, but not limited to, reliability, upcoming capital projects and enhancements and any other specific concerns or issues of the City and the utility.   F.  Section 11 establishes more detailed record and reporting requirements including authorizing the City to audit the utility company’s records related to the franchise fee.   G.   The Current Franchise Agreement permits the City to purchase the utility company’s electric plant and facilities (excluding transmission lines and other equipment serving other communities) located within the City of Winter Springs upon the expiration of the franchise.  The purchase price would to be established in arbitration.  However, the electric utility stated that under no circumstances would they accept this or any other purchase provision for their electric utility equipment. Consequently, the new franchise agreement does not expressly allow the City to purchase the utility company’s power plant and equipment located within the City at the termination of the new franchise agreement.   7.   During the course of negotiations, the City requested a copy of Duke Energy’s customer list for accounts within the City’s jurisdictional boundaries. The purpose is to verify the accuracy of the list of accounts to ensure the proper accounts are paying their proportionate share of the City’s franchise fee.  Duke Energy has provided the list to City staff and staff is working with Duke Energy representatives to complete the verification which should result in an up-to-date list of accounts.  In the future, City staff anticipates performing this verification process on an annual basis in conjunction with the annual review and audit requirements set forth in Sections 11 and 21 of the proposed Ordinance. Public Hearings 503 PAGE 3 OF 4 - March 10, 2014   8.         Representatives of Duke Energy have indicated that the terms and conditions of Ordinance No. 2014-07 are acceptable and Duke Energy will accept and sign the Ordinance. FISCAL IMPACT: The Ordinance maintains a franchise fee of six percent (6%) on “base revenue” which Duke Energy receives from certain customers within the jurisdictional limits of the City.  Duke Energy then spreads the franchise fee paid to the City across their entire customer base within the jurisdictional limits of the City in accordance with Public Service Commission regulations.  Under the proposed Ordinance, the definition of “base revenue” is modified to include industrial customers and City sponsored street lighting.  Further, ad valorem taxes paid to the City by Duke Energy will no longer be deducted from the franchise fee amount owned the City.  Based on historical customer data, this modification results in an increase of base revenues as defined in the Ordinance.  When the six percent franchise fee is calculated on the increased base revenue amount and the ad valorem tax off-set is eliminated, the City anticipates that the gross franchise fee paid to the City by Duke Energy will increase by approximately $6,000 per month/$72,000 per year.  However, the gross franchise fees collected by the City are off-set by the amount of franchise fees that the City actually pays on its electric utility invoice due to the collection method utilized by the electric utility to proportionately spread the franchise fee required to be paid to the City over the entire electric utility customer base within the City including the City. Further, the actual franchise fee amount paid is subject to actual energy usage by customers within the City which has been on a significant downward trend for several years. COMMUNICATION EFFORTS: This Agenda Item has been electronically forwarded to the Mayor and City Commission, City Manager, City Attorney/Staff, and is available on the City’s Website, LaserFiche, and the City’s Server. Additionally, portions of this Agenda Item are typed verbatim on the respective Meeting Agenda which has also been electronically forwarded to the individuals noted above, and which is also available on the City’s Website, LaserFiche, and the City’s Server; has been sent to applicable City Staff, Media/Press Representatives who have requested Agendas/Agenda Item information, Homeowner’s Associations/Representatives on file with the City, and all individuals who have requested such information. This information has also been posted outside City Hall, posted inside City Hall with additional copies available for the General Public, and posted at five (5) different locations around the City. Furthermore, this information is also available to any individual requestors. City Staff is always willing to discuss this Agenda Item or any Agenda Item with any interested individuals.   RECOMMENDATION: The City Manager and City Attorney recommend that the City Commission approve first reading of Ordinance No. 2014-07 granting a new ten (10) year franchise to Duke Energy Florida, Inc. to provide electric utility service within the City of Winter Springs.    ATTACHMENTS: 1.  Ordinance No. 2014-07  (13 pages) Public Hearings 503 PAGE 4 OF 4 - March 10, 2014 ORDINANCE NO. 2014-07 AN ORDINANCE GRANTING TO FLORIDA POWER CORPORATION d/b/a DUKE ENERGY FLORIDA, INC. A NON-EXCLUSIVE FRANCHISE RELATING TO THE PROVISION OF ELECTRIC UTILITY SERVICE WITHIN THE CITY OF WINTER SPRINGS; AUTHORIZING DUKE ENERGY FLORIDA, INC. TO OCCUPY MUNICIPAL RIGHTS OF WAY AND STREETS WITHIN THE CITY FOR THE PURPOSE OF PROVIDING ELECTRIC SERVICES; PRESCRIBING THE TERMS AND CONDITIONS RELATED TO THE FRANCHISE GRANTED HEREUNDER; PROVIDING FOR SEVERABILITY OF PROVISIONS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Commission is granted the authority, under Section 2(b), Article VIII, of the State Constitution, to exercise power for municipal purposes, except when expressly prohibited by law; and WHEREAS , Section 166.021(1) provides that municipalities shall have the governmental, corporate, and proprietary powers to enable them to conduct municipal government, perform municipal functions, and render municipal services, and may exercise any power for municipal purposes except when expressly prohibited by law; and WHEREAS, the City Commission of the City of Winter Springs, Florida recognizes that the City of Winter Springs and its citizens need and desire the continued benefits of electric service; and WHEREAS, Duke Energy Florida, Inc. (Company) is a public utility which has the demonstrated ability to supply such services; and WHEREAS, on March 27, 1984 (as amended on June 26, 1984), the City Commission granted a 30 year franchise to Florida Power Corporation, the predecessor of Company, for the purpose of supplying electricity to the City and for the other purposes stated therein effective April 1, 1984; and WHEREAS, there is currently in effect a franchise agreement between the City of Winter Springs and Company, the terms of which are set forth in City of Winter Springs Ordinance No.290, passed and adopted on March 27, 1984, and amended by Ordinance No. 297, passed and adopted June 26, 1984, and accept, granting to Florida Power Corporation WHEREAS, Companyand the City of Winter Springs desire to enter into a new agreement (New Franchise Agreement) providing for the payment of fees to the City of Winter Springs in exchange for the nonexclusive right and privilege of occupying city-owned rights of way within the City of Winter Springs pursuant to certain terms and conditions, and WHEREAS, the City Commission of the City of Winter Springs deems it to be in the best interest of the City of Winter Springs and its citizens to enter into the New Franchise Agreement; NOW THEREFORE, BE IT ENACTED BY THE COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA: SECTION 1.Findings. The City deems it necessary, desirable and in the interest of its citizens to establish by ordinance a franchise granting the Company a non-exclusive franchise relating to the provision of electric utility service within the City of Winter Springs and authorizing Duke Energy Florida, Inc. to occupy the Rights-of-Way in the City. SECTION 2. Short Title. This ordinance shall be known and may be cited as the "Duke Energy Florida Electric Franchise." City of Winter Springs Ordinance No. 2014-07 213 Page of SECTION 3. Definitions. For the purposes of this ordinance, the following terms, phrases, words, and their derivatives shall have the meaning given herein. When not inconsistent with the context, words in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The word "shall" is always mandatory and not merely permissive. (A) - For the Company, a loss of one percent (1%) of Base Revenues within the corporate City limits due to Retail Wheeling. For the City, a loss of one percent (1%) of franchise fees due to Retail Wheeling. (B) "Base Revenues" means all revenues from the retail sale of electricity, net of customer credits, to residential, commercial, and industrial customers and City sponsored street lighting all within the corporate limits of the City. (C) Florida Power Corp. d/b/a Duke Energy Florida Inc., its successors and assigns. (D) City The City of Winter Springs, Florida. (E) their lessees, trustees or receivers), including any unit of state, federal or local government (including City herein), which owns, maintains, or operates an electric generation, transmission, or distribution system or facilities, or which otherwise provides, arranges for, or supplies electricity or electric energy to the public, or which supplies electricity to itself utilizing distribution or other facilities. Without limitation electric power marketer, or electric power aggregator. . (F) Florida Statutes (2013 366.02(1), Florida Statutes (2013 owned, municipally or governmentally owned, or cooperatively owned electric utility (including their lessees, trustees or receivers), which owns, maintains, or operates an electric generation, transmission, or distribution system in any State or Country. (G) "Electric Utility System" means an electric power system installed and operated in the Franchise Area in accordance with the provisions of the Florida Public Service Commission establishing technical standards, service areas, tariffs and operating standards, which shall include but not be limited to electric light, heat, power, and energy facilities, and a generation, transmission, and distribution system, with such extensions thereof and additions thereto as shall hereafter be made. City of Winter Springs Ordinance No. 2014-07 313 Page of (H) "Franchise Area" means that area for which Company provides electric utility service within the corporate City limits of the City. (I) (J) 2014-___, which is also sometimes referred (K) "Person" means any person, firm, partnership, association, corporation, company or organization of any kind. (L) CommissionCommission. (M) "Rights-of-Way" - All of the public streets, alleys, highways, waterways, bridges, sidewalks and parks, and any other public ways or places owned by the City, as they now exist or may be hereafter constructed, opened, laid out or extended within the present limits of the City, or in such territory as may hereafter be added to, consolidated or annexed to the City. (N) - A customer/supplier arrangement whereby an Electric Energy Provider utilizes transmission and/or distribution facilities of Company to make energy sales directly to an end use customer located within the Franchise Area. SECTION 4. Grant of Authority. (A) This grant of authority is limited to the provision by Company to place its Facilities within the Rights-of-Way for its electric utility services. Accordingly, subject to City permit requirements set forth in this Section, the City hereby grants to the Company, its successors and assigns the non-exclusive right, authority, and franchise to lay, erect, construct, maintain, repair and operate its Facilities in, under, upon, over and across the present and future Rights of Way, as they now exist or may be hereafter constructed, opened, laid out or extended within the present limits of the City, including but not limited to conduits, cables, poles, wires, supports and such other structures or appurtenances as may be reasonably necessary for the construction, maintenance and operation of an electric generation, transmission and distribution system, including information, telecommunication, and video transmission used solely by Company for the provision of electric service provided that all portions of the same shall conform to accepted industry standards, including but not limited to the National Electrical Safety Code. Company agrees that without the prior written permission of City, it will not allow any entity providing a wireless communication system to acquire rights to occupy Rights-of-Way under this Ordinance. In the event that Company desires to use its existing facilities, or constructs new facilities, in order to provide public communications, leased fiber optic capacity, City of Winter Springs Ordinance No. 2014-07 413 Page of or video services to existing or potential consumers, Company must obtain additional and separate written permission from the City Commission prior to allowing any such activity. During the term of this agreement, subject to Section (9), nothing in this Ordinance shall require Grantee to remove, de-energize, or cease using any poles, wires, or other things or Facilities identified herein above that were in place under previous ordinances or permits prior to the Effective Date of this Ordinance, regardless of whether such poles, wires or other Facilities are locat The Company agrees to apply for and obtain a Right-of-Way permit from the City prior to laying, erecting, constructing, or repairing any Facilities within the Right-of-Way, except a permit shall not be required in situations where the subject Work does not require any underground work. In addition, in emergency situations, the Company is not required to apply for and obtain a Rights-of-Way permit prior to conducting any emergency Work, provided however, Company agrees to apply for and obtain a permit as soon as practicable after the emergency Work has been completed. City agrees that permits will not be unreasonably withheld and no fees will be imposed by the City for said permits. Furthermore, the permit requirements set forth in this Section shall not to be construed to grant or imply authority upon the City to regulate the design, placement, distribution facilities or authority upon the Company to regulate the use of Rights-of-Way. (B) Annexation or Contraction. City and Company agree that the Franchise Area is subject to expansion or reduction by annexation and contraction of municipal boundaries. If City approves any Franchise Area expansion or reduction by annexation or contraction, City will provide written notice to Company, at the address provided below, within sixty (60) days of such approval and this Ordinance shall automatically extend to include any such annexed areas. Additionally, within sixty (60) days of any such annexation or contraction, City shall provide to Company an updated list containing the new or removed street names, known street name aliases, street addresses, and zip codes associated with each street name located within the annexed or contracted area at the time of annexation or contraction. All address listings shall be addressed to the Annexation Coordinator as follows with the address subject to change: Duke Energy Annexation Coordinator P. O. Box 33199 St. Petersburg, FL 33733-8199 Or by email to: AnnexationRequests@pgnmail.com Company must revise its payments due to any expansion or reduction by annexation within a reasonable time after Company has received such notice and updated list from City, but no later than sixty (60) days after receipt of notice and the list. In the event the City fails to provide notice and an updated list within the aforementioned notice period, the Company will not be required to revise its payments due to the expansion or reduction until such time the City City of Winter Springs Ordinance No. 2014-07 513 Page of provides written notice and Company is afforded a maximum of sixty (60) days to make said revision. (C) Non-Exclusive Use. The Company right to use and occupy Rights-of-Way for the purposes herein set forth shall be non-exclusive as to entities not engaged in the provision of electric energy and service, and the City reserves the right to grant to others the right to utilize the Rights-of-Way, to any person at any time during the period of this Franchise so long as such grant does not materially interfere with the rights granted to Company herein and create an unsafe condition or unreasonably conflict between utilities based on industry standards utilized by cities and public utilities for managing rights-of-way.. SECTION 5. Notice of Acceptance and Term of Franchise. This Ordinance shall become effective upon being legally passed and adopted by the City Commission; and it is further agreed that Grantee shall accept this Franchise as of the date of the passage and adoption by the City Commission and shall signify its acceptance in writing within thirty (30) days after the City Commission approval of this Ordinance by filing its written acceptance with the City Manager, with a copy to the City Attorney. If Grantee fails to accept this Franchise within thirty (30) days of its date of passage, then this Ordinance shall be null and void, and of no force and effect of any kind. Commencing on the Effective Date, the term of the Franchise granted herein shall be for a period of ten (10) years with an option to renew for an additional ten (10) years with the prior written approval of the parties. For purposes of calculating the ten (10) year term, the first day of this Franchise shall be March 24, 2014. SECTION 6. Payment to City. (A) Effective the first day of the second month beginning after the Effective Date of this ordinance, City shall be entitled to receive from Company a monthly franchise amount that r the preceding month, which amount shall be the total compensation due City for any and all rights, authority and privileges granted by this Franchise, including compensation for any required permits, parking fees, or any other fee or cost related to the rights granted hereunder or to do business within the Franchise Area. Any franchise amounts that will be paid to the City will be to the City in the manner described herein. The City expressly acknowledges that no additional or other amounts shall be due or remitted by Company for the exercise of its rights granted hereunder. Payment shall be made to City for each month no later than the twentieth (20th) day of the following month. The monthly payment shall be made by wire transfer. Any monthly payment or any portion thereof made twenty (20) days after the due date without good cause shall be subject to interest calculated at the rate of ten percent (10%) per annum until all payments are paid in full. City of Winter Springs Ordinance No. 2014-07 613 Page of (B) Only disputed amounts shall be allowed to be withheld by Company, and any such amounts shall not accrue any interest during the pendency of any such dispute. (C) The City acknowledges that all classifications and categories of customers of Company shall be subject to the payment of the Franchise Fee due hereunder subject to applicable rules of the Public Service Commission. SECTION 7. Favored Nations. (A) In the event Company shall hereafter accept an electric utility franchise ordinance from any municipality providing for the payment of a franchise fee in excess of that provided for in Section 6 above , or by providing another municipality more favorable terms, as to the subject matter of Section 6(A) above, Company shall notify City, and City reserves the right to amend this Franchise to increase the franchise fee payable under this Ordinance to no more than the greater franchise fee that Company has agreed to pay to such other municipality. Company's obligation to pay such greater franchise fee to City shall apply prospectively beginning with the next monthly franchisee fee payment following City's timely notice of its exercise of its amendment right to which Company may collect such increased fee from its customers. Company's failure to notify City of such additional payments does not limit City's right to amend to require such additional franchise fees. (B) It is the intent and agreement of City and Company that Company shall not be required to pay City a franchise fee under Section 6 of a percentage greater than that paid to City by any other Electric Utility or Electric Energy Provider utilizing City's Rights-of-Way on such Electric Utility's or Electric Energy Provider's revenues attributable to services that are the same or substantially the same as those performed by Company. It is further the intent and agreement of City and Company that Company should not be placed at a competitive disadvantage by the payments required by Section 6 of this Ordinance in the event other Electric Utilities or Electric Energy Providers provide services in competition with Company without utilizing Rights- of-Way. Company agrees that City shall have the right and the sole responsibility, to the fullest extent provided by law, to enforce and collect a franchise fee under this Section from other Electric Utilities or Electric Energy Providers. (C) If City imposes a lesser fee, or no fee, or is unable to impose a fee on another Electric Utility or Electric Energy Provider providing or seeking to provide services in competition with Company to customers within City CityRights-of-Way or not utilizing City-of-Way, Company such services shall be automatically reduced to the lesser fee charged the other Electric Utility or Electric Energy Provider (or to zero, if no fee is charged such other Electric Utility or Electric Energy Provider). In all events, City shall not grant more favorable treatment to other Electric Energy Providers than is granted to Company under this Ordinance, it being the intent of the parties that no future provider of electric service, be it generation, transmission or distribution service, to customers within the corporate limits of City shall be given a competitive advantage over Company. City of Winter Springs Ordinance No. 2014-07 713 Page of SECTION 8. City Rights. The right is hereby reserved to the City to adopt such regulations as it shall find necessary in the exercise of its police power, provided that such regulations, by ordinance or otherwise, shall not be arbitrary and capricious, and shall not be in conflict with the laws of the State of Florida or the lawful regulations of any state agency possessing the power to regulate the activities of the Company, or conflict with or otherwise materially interfere with the benefits conferred on the Company hereunder. In the event of a conflict between this Franchise Agreement and any other ordinance or regulation adopted by the City rights to perform work in and/or occupancy of the Rights-of-Way as permitted hereunder, the rights under this Franchise Agreement shall govern and control. SECTION 9. Work In Rights-Of-Way. The Company is hereby granted the right, authority and privilege to perform all necessary work and excavations in said Rights-of-Way of the City related to its Facilities and necessary or incidental to carrying out such rights and obligations as permitted hereunder subject to the City permit requirements set forth in Section 4 (A). The Company shall have the right to fasten and to stretch and lay along the lines of said poles, conduits, pipes and cables necessary for transmitting and conveying the electric current to be used in t with all the right and privileges necessary or convenient for the full use including the right to trim, cut and keep clear all trees and limbs near or along that may in any way endanger the proper operation of same. Moreover, the Company shall have the right to construct, erect, operate and maintain within the City an electric system consisting of its Facilities for carrying on t purposes, the streets of said City shall not be unnecessarily obstructed for an unreasonable amount of time and work in connection therewith shall be done and carried on in conformity with such reasonable rules, standards,regulations and local ordinances with reference thereto as may be adopted by the City for the protection of the public and which are not in material conflict with or otherwise materially interfere with the benefits conferred on the Company hereunder. Nothing in this Ordinance shall be considered as a surrender by City of its right and power to use and relocate the use of, and to reasonably relocate the uses within, its Rights of Way. SECTION 10. Indemnification. (A) The acceptance of this Franchise by Company shall be deemed an agreement on the part of Company to indemnify City and its employees and hold them harmless against any and all direct dama costs that City and its employees may incur to the extent arising out of or resulting from the negligence, default, or misconduct of Company, its contractors and agents in the construction, repair, operation, or maintenance of its electric utility Facilities hereunder. In no event shall City of Winter Springs Ordinance No. 2014-07 813 Page of Company be liable to the City for any consequential, incidental, punitive, exemplary, multiple, or indirect damages. (B) Company shall maintain throughout the term of this Franchise sufficient financial resources to provide self-insurance insuring City and Company with regard to all damages set forth in Section 8(A) in the minimum amounts of: (i) $1,000,000 for bodily injury or death to a person; $3,000,000 for bodily injury or death resulting from any one accident. (ii) $500,000 for property damage resulting from any one accident. (iii) $1,000,000 for all other types of liability. (C) City acknowledges that Company provides its own liability insurance (self-insured). Upon request by the City, Company will submit documentation that it has accumulated sufficient financial resources in order to provide insurance coverage as indicated in this Section. SECTION 11. Records and Reports. (A) Company Rules and Regulations. The following records and reports shall be available to City upon City's reasonable request: copies of rules, regulations, terms and conditions adopted by Company that relate to Company's use of City's Rights-of-Way. (B) Accounting. Company shall use the system of accounts and the form of books, accounts, records, and memoranda prescribed by the Florida Public Service Commission or such other applicable governing agency having jurisdiction over Company. (C) Reports. Company will submit monthly a statement of its estimated Base Revenues for the period on which such payment is based in such reasonable form which is sufficient to show the source and method of computation of Base Revenues and the amount of Franchise Fees owned. The acceptance of any statement or payment shall not prevent the City from asserting that the amount paid is not the amount due, or from recovering any deficit by any lawful proceeding, including interest to be applied at the rate set forth in Section 6(A). (D) Availability of Records and Reports. Company shall supply information that City or its representatives may from time to time reasonably request relative to the calculation of franchise fees. Such records shall, on written request of City, be open for examination and audit by City and City's representatives during ordinary business hours and such records shall be retained by Company for a period of three (3) years. Company and City may also agree to exchange such information by electronic communication to the extent feasible and practicable. (E) Audit. City may require, upon prior written notice and during Company normal business hours, an audit of Company's books related to this Agreement notmore than once every five (5) years and then only for the preceding three years. Company will reimburse City's audit costs if the audit identifies errors in Company's franchise Base Revenues of five City of Winter Springs Ordinance No. 2014-07 913 Page of percent (5%) or more for the period audited. If an underpayment of franchise fees has occurred period computed at a rate of ten (10) percent per annum. Both the underpayment and interest shall be paid within sixty (60) days from completion of the audit. SECTION 12 Retail Wheeling. In the event the appropriate governmental authorities authorize Retail Wheeling, then either party, if Adversely Affected thereby, may reopen this ordinance upon thirty (30) days written notice to the other for the sole purpose of addressing the Franchise Fee payments between The Company and The City. If the parties are unable to agree within ninety (90) days of reopening, either party may declare an impasse and may file an action in the Circuit Court in Seminole County, Florida for declaratory relief as to the proper Franchise Fee in light of Retail Wheeling. SECTION 13Renewable Energy. . (A) Nothing contained in this Ordinance shall be construed as prohibiting or impeding the residents, businesses, and inhabitants within the incorporated area of the City from installing and using renewable energy systems provided the renewable energy systems referred to are otherwise permitted by Florida law. (B) City may, if permitted by law, (i) generate electric capacity and/or energy at any facility owned by the City for storage or utilization at that facility or other City facilities, operations or equipment; (ii) use renewable energy sources to generate electric capacity and/or energy for use in demonstration projects or at City (iii) sell electric capacity and/or energy to Company or other wholesale purchaser in compliance with applicable rules and regulations controlling such transactions. SECTION 14. Severability. Should any section or provision of this Ordinance or any portion thereof, the deletion of which would not adversely affect the receipt of any material benefits or, substantially increase the burden of any party hereunder, be declared by a court of competent jurisdiction to be invalid, such decision shall not affect the validity of the remainder, as a whole or any part thereof, other than the part declared to be invalid. In the event of any such partial invalidity, City and Company shall meet and negotiate in good faith to obtain a replacement provision that is in SECTION 15. Governing Law and Venue. (A) This Ordinance shall be construed and interpreted according to the laws of the State of Florida. City of Winter Springs Ordinance No. 2014-07 1013 Page of (B) In the event that any legal proceeding is brought to enforce the terms of this Ordinance, the same shall be brought in Seminole County, Florida, or, if a federal claim, in the U.S. District Court in and for the Middle District of Florida, Orlando Division. SECTION 16. Merger. The terms and conditions set forth herein, upon written acceptance of Company, shall constitute the full, complete and entire understanding and agreements of the parties as to its subject matter, and the written terms supersede all prior contemporaneous representations, discussions, negotiations, understanding and agreements relating to the subject matter of this agreement. The parties shall not be bound or liable for any statement, prior negotiations, correspondence, representation, promise, draft agreements, inducements, or other understanding of any kind or nature not set forth or provided herein. SECTION 17. Notices. Except in exigent circumstances, all notices by either City or Company to the other shall be made by depositing such notice in the United States Mail, Certified Mail return receipt requested or by recognized commercial delivery, e.g. FedEx, UPS or DHL or facsimile. Any notice served by certified mail return receipt shall be deemed delivered five (5) days after the date of such deposit in the United States mail unless otherwise provided. Any notice given by facsimile is deemed received by next Business Day. "Business Day" for purposes of this section shall mean Monday through Friday, with Saturday, Sunday and City and Company observed holidays excepted. All notices shall be addressed as follows: To City: To Company: City Clerk External Relations Department 1126 East State Road 434 Duke Energy Services Company, LLC Winter Springs, FL 32708 P.O. Box 14042 Phone: (407) 327-5955 St. Petersburg, FL 33733-4042 Facsimile No.: (407) 327-4653 Facsimile No.: (727) 820-5715 The aforementioned contact information may be freely amended by either party by providing written notice to the other party. SECTION 17. Non-Waiver Provision. The failure of either party to insist in any one or more instances upon the strict performance of any one or more of the terms or provisions of this Ordinance shall not be construed as a waiver or relinquishment for the future of any such term or provision, and the same shall continue in full force and effect. No waiver or relinquishment shall be deemed to City of Winter Springs Ordinance No. 2014-07 1113 Page of have been made by either party unless said waiver or relinquishment is in writing and signed by the parties. SECTION 18. Repealer And Superseding Provision. Ordinance No. 290, passed and adopted March 27, 1984, and Ordinance No. 297, passed and adopted June 26, 1984, and all other prior ordinances and parts of prior ordinances and all prior resolutions and parts of prior resolutions in conflict herewith, are hereby repealed SECTION 19. Dispute Resolution. It is in the best interests of the City and Company to avoid costly litigation as a means of resolving disputes which may arise hereunder under this Ordinance. Accordingly, the Company and City agree that prior to pursuing their available legal remedies, the City and Company will meet in an attempt to resolve any differences. If such informal effort is unsuccessful, then the Company or the City may exercise any of their available legal remedies. SECTION 20. Nothing in this Ordinance shall prevent the City from levying and collecting taxes and assessments as City may from time to time be empowered by law to levy and collect provided such taxes and assessments shall be applied in accordance with law and shall not constitute an -of-Way. Such taxes and assessments shall not be considered part of the Franchise Fee authorized by this Ordinance. SECTION 21. Annual Service Review Meeting. The Company and City will endeavor to cooperate regarding Company providing electric utility services within the City. Commencing on or about April 1, 2015 and each year thereafter, the Company and City agree to hold an annual service review meeting at Winter Springs City Hall. The City will be responsible for coordinating the meeting. The purpose of the meeting will be to discuss electric service related issues including, but not limited to, reliability, upcoming capital projects and enhancements and any other specific concerns or issues of the City and Company. City of Winter Springs Ordinance No. 2014-07 1213 Page of ADOPTED by the City Commission of the City of Winter Springs, Florida, in a regular meeting assembled on the 24th day of March, 2014. FIRST READING AND PUBLIC HEARING: March 10, 2014. SECOND READING AND PUBLIC HEARING: March 24, 2014. ATTEST: ___________________________ __________________________ Andrea Lorenzo-Lucas, City ClerkCharles Lacey, Mayor Approved as to form and legality for the Use and reliance by the City of Winter Springs, Florida, only: _____________________________ Anthony Garganese, City Attorney The terms and conditions of this Ordinance are hereby duly accepted by Company on this ____day of _______, 2014: ___________________________________ Robert Alexander Glenn, State President Duke Energy Florida, Inc. City of Winter Springs Ordinance No. 2014-07 1313 Page of