ORD 2017-14 Adopted ORDINANCE NO. 2017-14
AN ORDINANCE AUTHORIZING THE CITY OF NORTH AUGUSTA TO GRANT A
NONEXCLUSIVE FRANCHISE AGREEMENT TO AIKEN ELECTRIC
COOPERATIVE, INC., ITS SUCCESSORS AND ASSIGNS, FOR THE PROVISION OF
ELECTRIC SERVICES WITHIN THE CITY
WHEREAS, Aiken Electric Cooperative, Inc. has requested that the City
grant to said company a new franchise agreement related to said company's use of the
streets and public places of the municipality to construct, install, maintain, and operate its
facilities; and
WHEREAS, the existing franchise for electric services is scheduled to
terminate in 2020; and
WHEREAS, Aiken Electric Cooperative, Inc. and South Carolina Electric
and Gas Company have recently entered into an agreement related to service areas within
the City and have requested that the City grant new franchises to both companies at this
time; and
WHEREAS, the Mayor and City Council have considered this request and
determined that such request is proper and in the interest of the citizens.
NOW, THEREFORE, BE IT ORDAINED by the Mayor and City Council of
the City of North Augusta, South Carolina, in meeting duly assembled and by the authority
thereof, that:
1. The City grant to Aiken Electric Cooperative, Inc. a nonexclusive
franchise as specified in the Franchise Agreement attached hereto,
marked as "Exhibit A", and incorporated by reference.
2. All other ordinances or parts of ordinances in conflict herewith are, to the
extent of such conflict, hereby repealed.
3. This Ordinance shall become effective immediately upon its adoption on
third and final reading.
4. The City Administrator is authorized to execute any documents necessary
to complete the granting of this franchise agreement.
DONE, RATIFIED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF
NORTH AUGUSTA, SOUTH CAROLINA,ON THIS lh DAY OF OCTOBER,2017.
FIRST READING: Dc. ` /j
Zi—e/AM,47
S
SECOND READING:�a 'i 7 ROBERT A. PETTIT,MAYOR
THIRD READING: ATTEST:
DONNA B.YOUNG,CI CLERK
FRANCHISE AGREEMENT
FOR PROVISION OF ELECTRIC SERVICES
BY AIKEN ELECTRIC COOPERATIVE, INC.
This non-exclusive franchise agreement is between the City of North Augusta, South Carolina, hereinafter
referred to as "the City," and Aiken Electric Cooperative, Inc., hereinafter referred to as "the Company," and
collectively referred to as"the Parties." This non-exclusive franchise agreement allows the Company the use of
portions of public rights-of-way for the purpose of providing electric services to customers within certain areas
of the City and outlines the conditions for doing so.
This franchise agreement provides that the Company, or its successors, or assigns, shall have the right, power,
and authority to erect,to install,to maintain,and to operate in,over,upon, and under the streets,alleys, and public
places of the City electric lines, poles, wires, guys, push braces,transformers, and appurtenant facilities,together
with any necessary right of access thereto, for the period of time set forth herein to render electric service to its
customers in the City from those facilities; install communication lines if initially used solely for the purpose of
electric utility operating controls should the Company desire to use the communication lines for purposes other
than for the provision of electric controls,it shall first obtain from the City a business license,franchise agreement,
or consent agreement, whichever is deemed appropriate; to set the amount of franchise fee to be paid by the
Company to the City; to levy franchise fees on third parties selling electricity using the Company's electric
distribution or transmission systems; and to allow for a fund and special franchise fee districts for non-standard
services.
I. Basic Provisions:
a. The Company shall have the right to construct and extend its electric distribution system to connect new
services in the parcels shaded in green on Exhibit A and in newly annexed parcels which have been assigned to
the Company by the Public Service Commission of South Carolina prior to the annexation. The Company shall
supply standard electric service to the meters of customers at standard voltages under rates and general terms and
conditions as authorized by law.
b. The Company shall install underground electric distribution in all new commercial and residential
subdivisions of the City, under terms and conditions customarily applicable to "aid to construction payments."
The Company will include underground facilities on public rights-of-way to such projects so far as technically
practical and economically feasible under terms and conditions customarily applicable to "aid to construction
payments" as set forth by the South Carolina Public Service Commission.
c. No street,alley,bridge,right-of-way,or other public place used by the Company shall be obstructed longer
than necessary during its work of construction or repair, and will be restored to the same good order and condition
as when said work was commenced. No part of any street, alley, bridge, right-of-way, or other public place of
the City, including any public drain, sewer, catch basin, water pipe,pavement, or other public improvement, will
be damaged. However,should any such damage occur due to the Company's failure to use due care,the Company
will repair the same as promptly as possible. In default thereof, the City, upon prior written notice, may make
such repairs and charge the reasonable cost thereof to and collect the same from the Company. The Company
will save the City harmless from all liability or damage (including judgment, decrees, attorney's fees, and legal
court costs)resulting from its failure to use due care in the exercise of the privileges herein granted or of its rights
under this section.
d. All work performed within the municipal limits by the Company or its contractors shall be in accordance
with the National Electric Safety Code and the applicable rules and regulations. All contractors and
subcontractors employed by the Company shall hold current North Augusta business licenses.
e. All work upon the streets and public places of the City shall be done under the general supervision of the
Mayor and Council (and legally authorized staff) of the City.
II. Assignment of Electric Service Rights:
Upon approval of this Franchise Agreement and the franchise agreement between South Carolina Electric & Gas
Company ("SCE&G") in accordance with the terms of the Agreement Concerning Electric Service Rights
Between Aiken Electric Cooperative and South Carolina Electric & Gas Company, dated August 23, 2017
("Electric Service Rights Agreement"), the Company shall have electric service rights to the parcels shaded in
green on Exhibit A, and SCE&G shall have electric service rights to the parcels shaded in red on Exhibit A,
provided, however, that:
a. The Company may continue to provide electric service to any building or structure to which it is already
providing electric service as of the effective date of the Franchise Agreements until such building or structure is
removed,torn down, razed to the ground, or demolished, even if Exhibit A provides electric service rights for the
parcel on which the building or structure is located to SCE&G; and SCE&G may continue to provide electric
service to any building or structure to which it is already providing electric service as of the effective date of the
Franchise Agreements until such building or structure is removed,torn down,razed to the ground, or demolished,
even if Exhibit A provides electric service rights for the parcel on which the building or structure is located to the
Company. After any building or structure that is being served by SCE&G or the Company pursuant to the terms
of this Paragraph II(a) is removed, torn down, razed to the ground, or demolished, the service rights designation
in Exhibit A shall be the sole determining factor as to whether SCE&G or the Company has the right to provide
electric service to any future replacement building or structure within that parcel.
b. Where any new building or structure is constructed so that part of the building or structure resides on a
red parcel in Exhibit A and part of the building or structure resides on a green parcel of Exhibit A, the customer,
in its sole discretion,may choose whether the Company or SCE&G provides electric service to such new building
or structure.
c. Upon any future annexation by the City, the Company shall have electric service rights to those annexed
parcels assigned to it by the Public Service Commission of South Carolina prior to the annexation, and SCE&G
shall have electric service rights to those annexed parcels assigned to it by the Public Service Commission of
South Carolina prior to the annexation.
d. If the City Council does not approve this Franchise Agreement and the franchise agreement with SCE&G
pursuant to the terms of the Electric Service Rights Agreement, the Electric Service Rights Agreement shall be
considered terminated, null, and void.
III. Street Lighting:
The Company shall be responsible for the provision of reliable street lighting service for the areas of the City
within which it provides electric services as outlined below.
a. Materials furnished will be of standard quality and kind, and the lamps will be in conformity with the
requirements of good street lighting practice.
b. The Company shall make additions to or changes in the type, style, and location of streetlights in
accordance with written requests of the City.
c. Where streetlights are desired by the City, lamp unit specifications and rates will be agreed upon by the
parties.
d. Upon receipt of notification that there is a defective standard lamp, the Company shall correct the defect
within three (3) working days. Non-standard lamps shall be corrected as soon as reasonably possible.
e. The City will have at all reasonable times access to all maps, records, and rates relating to the street
lighting system of the City.
f. The City shall be responsible for payments to the Company for standard street lighting in accordance with
rates approved by the South Carolina Public Service Commission, and for non-standard street lighting payments
as have been mutually agreed upon by the City and the Company.
IV. Franchise Fee:
a. As payment for the right to use the public rights-of-way within the corporate limits of the City for the
provision of electric services, the Company will pay to the City a franchise fee. The franchise fee shall be in an
amount not to exceed five per-cent (5%) of the gross sales revenue accruing to the Company from all residential
and commercial sales of energy within the City. Gross receipts shall include all revenues received by the
Company resulting from its facilities located within the City, including, but not limited to, wheeling or
transportation service.
b. With approval of this agreement the franchise fee shall be set at five per-cent (5%). Any change in the
franchise fee shall be by ordinance duly adopted by City Council. The City shall notify the Company ninety (90)
days prior to the effective date of any franchise fee change.
c. Franchise fees imposed by the City upon the Company on gross energy sales may be collected from
customers of the Company within the corporate boundaries should the company desire to do so.
d. Franchise fees, based upon the gross sales revenues accruing to the Company from all residential and
commercial sales of electricity during the preceding calendar year and all wheeling or transportation services to
such customers within the corporate limits and which have been collected from said customers during the
preceding year, shall be due and payable by the Company no later than April 1 each year.
e. The City's receipt of the franchise fee as provided herein will be in lieu of all other municipal fees and
business licenses which are based on the gross sales of electricity or the Company's electric operations within the
City. The company shall be responsible for payment of all ad valorem taxes or sales taxes, as may be provided
for by state law. Any other products or businesses and other revenue accruing to the Company within the City
shall be subject to further franchise agreements, consent agreements, or business licenses as may be appropriate.
f. Upon the request of the City, the Company shall provide a listing of all customers included under the
franchise fee,sorted alphabetically and by street address. The parties acknowledge and agree that this information
shall only be used for the purpose of auditing the franchise fee. This information is proprietary to the Company
and shall not be disclosed under the South Carolina Freedom of Information Act.
g. The City shall notify the Company in writing of areas annexed into the City and provide pertinent maps
and tax numbers so that newly annexed customers will be subject to franchise fees. Said notification shall be a
precondition to franchise fee payments on those accounts. Franchise fees shall be applicable with the first
customer billing following the Company's receipt of the above notifications.
h. Upon request of the City,the Company shall collect and transmit to the City franchise fees and/or business
license fees on all electricity sold by third parties to customers within the City using the Company lines or facilities
as may be required or permitted by state law. This fee is to be in all respects equivalent to the franchise fees
established herein plus a proportional share of all other payments to the City.
V. Tree Trimming:
The intent of this section is to maintain the aesthetic qualities and tree canopy of the City. The City recognizes
the need for the Company and/or its subcontractors to periodically trim, cut,prune, etc. trees and other vegetation
within the rights-of-way upon which its facilities are located. It is also recognized that the health and aesthetics
of trees is of paramount importance and contribute to the quality of life within the community
a. Prior to trimming, cutting, pruning, etc. of trees or other growth within the public rights-of-way of the
City, the Company or its subcontractors shall meet with the official of the City responsible for maintaining the
City's public rights-of-way. The City and the Company shall mutually agree upon the extent to which the
trimming, cutting, pruning, etc. shall occur. If agreement as suggested is not reached, the City's decision shall
govern.
b. Notwithstanding the requirements above,permission by the City shall not be unreasonably withheld. The
City shall not prevent said work when to do so would cause the Company to be unable to provide reliable electrical
service within the Aileen Cooperative System as required by this franchise agreement.
VI. Non-Standard Service Projects
There are times when it shall be in the best interest of the Company and the City to mutually agree to provide
non-standard street lighting projects,or non-standard electrical service such as underground service not otherwise
provided for in this agreement. Underground service to new residential and commercial customers is provided
for elsewhere within this agreement and shall not be included within the definition of non-standard service.
There will be established a "non-standard service" program for the purpose of financing electrical projects that
are outside the scope of this franchise agreement. This non-standard service program shall be utilized and funded
as follows.
a. The City and the Company will match on a dollar for dollar basis the costs associated with providing non-
standard services. The Company's maximum contribution to this non-standard service provision shall be an
amount equal to one-half of one percent applied to the Company's annual gross revenue from electric service.
This gross revenue shall be the same amount used to compute the city franchise fee payment for the previous 12
months. If the amount designated is not encumbered for specific non-standard service projects within any given
year in which it is calculated,that amount shall be accrued and shall be available in ensuing years to match dollar
for dollar the City's contribution to the costs of providing the non-standard service. The accumulated funds
available for the Company's contribution to non-standard projects shall be calculated yearly on the anniversary
of this agreement.
b. Special Franchise Fee District- For any non-standard service project, the City may designate by action of
City Council a special "franchise fee district" within which non-standard service will be provided. A special
franchise fee surcharge, not to exceed seven percent (7%), could be applied to customer accounts for electricity
within the boundaries of the special franchise fee district. The franchise fee surcharge will be applied beginning
with commencement of the project for a definite time, which shall not exceed ten (10) years. Proceeds shall be
used to cover the City's costs associated with the non-standard services.
If the City or the Company has advanced the funds for non-standard service for which the franchise fee surcharge
has been levied, the fee surcharge will be used to reimburse the City or the Company as appropriate, such
reimbursement to be made on a monthly basis. The cost of borrowing funds to pay for the non-standard service
will be included in the reimbursement. The Company's weighted average cost of capital as filed with the South
Carolina Public Service Commission will apply to any amounts advanced by the Company.
c. The City will establish, in consultation with the Company, priorities for non-standard service projects.
All non-standard service projects will conform to good utility practices as to reliability and safety.
d. The Company will be required to undertake non-standard service projects only to the extent that balances
designated to the fund are reasonably projected to be adequate to cover the costs of the projects as they are
incurred.
e. The amounts designated for the program will be used exclusively to defray the reasonable and necessary
costs of planning, designing, permitting, and construction of the electric utility projects involving non-standard
service.
f. Costs for non-standard service projects will be paid from amounts designated to the program as the costs
are incurred.
g. The City will use its best efforts to acquire all necessary rights-of-way,transformer sites, or other use and
access rights for non-standard projects. Within three (3) months of completion of an overhead to underground
conversion project, the Company will remove overhead facilities and the City will require property owners to
connect to underground facilities.
VII. Terms of Agreement:
a. This franchise shall become effective upon its adoption by ordinance of City Council and its acceptance
in writing by the Company, which shall be on the same date that the Franchise Ordinance for SCE&G becomes
effective. This franchise is granted for a period of thirty (30) years from the effective date. Upon acceptance by
the Company in writing, this franchise supersedes and replaces all prior franchise ordinances concerning the
parties.
b. The decision by the City of whether to renew this franchise shall be made by those elected officials then
in office under such circumstances as may then apply.
c. This franchise is subject to the constitution and laws of the State of South Carolina. The rights hereunder
accrue exclusively to the parties, their successors and assigns. It is the express intent of the parties that this
agreement shall not create any rights in third parties.
d. This agreement shall become effective upon its adoption by ordinance of City Council and its acceptance
in writing by the Company.
Dated this the l ' day of aC 0 6-e"--,J2017.
IN WITNESS WHEREOF, the City of North Augusta and Aiken Electric Cooperative, INC. have
executed this Franchise Agreement as of the date and year first above written.
THE CITY
fAZatLed
MAYOR
APPROVE i• ATTEST:
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CITY O'r4 EY CITY CLERK
THE COMPANY / //
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APIj' •VED: ATTEST:
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C ORATE COUNSEL SECRETARY
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