AN ORDINANCE GRANTING TO QUEST TRANSMISSION COMPANY, A DELAWARE LIMITED LIABILITY COMPANY, ITS SUCCESSORS AND ASSIGNS, A FRANCHISE ALLOWING THE CONTINUED OPERATION OF NATURAL GAS PIPELINES FOR THE SOLE PURPOSE OF SUPPLYING NATURAL GAS TO CITY POWER PLANT NO. II OR ANY OTHER POWER GENERATING FACILITY OF THE CITY OF AUGUSTA AND NOT FOR GENERAL COMMERCIAL SUPPLY OF GAS; PRESCRIBING THE TERMS THEREOF AND RELATING THERETO AND ANY OTHER MATTERS AS ARE NECESSARY TO CARRY OUT A FRANCHISE.
NOW THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF AUGUSTA, KANSAS:
Section 1. The City of Augusta, Kansas (the “City”) hereby grants to Quest Transmission Company, a Delaware limited liability company (the “Company”), the right, privilege and franchise for a period of twenty (20) years from the effective date hereof to construct, own, operate and maintain natural gas pipelines and facilities and appurtenances necessary thereto with the pipelines not to exceed 15 miles in length and for the sole purpose of transporting natural gas within the city limits for the purpose of the private use of the City at City Power Plant II or any other power generating station of the City, but not for the general commercial supply of gas to consumers within the City. Prior to commencing construction of any new pipeline, Company shall obtain the written consent of the City as to the proposed location, which consent shall not be unreasonably withheld. Company shall obtain natural gas from whatever source is available and do all things necessary or proper to carry out the purposes of this franchise within the limits of the City and beyond.
Section 2. As for the consideration for the granting of this franchise and in lieu of any city occupational license or revenue taxes, the Company shall pay to the City 5% of its gross revenue from the transportation of natural gas within the corporate limits of the City. Payments to the City under this provision shall be made on the 20’ of each month for the preceding monthly period. The City shall have access to and the right to examine, at all reasonable times, all books, receipts, files, records and documents necessary to verify the correctness of the statements and to correct them, if found to be erroneous. If statements of gross receipts are determined to be incorrect, then payment shall be made upon a corrected statement.
Section 3. All portions of the pipelines that shall be laid or installed under this franchise shall be so located and laid as to avoid interference or obstruction of any water pipes, drains, sewers or other structures already installed by the City. The Company shall have the right to occupy the streets or other public property easements or rights of way within the City as may be required to properly construct, operate or maintain pipelines and facilities and these pipelines shall be constructed in the most reasonably expeditious route from the nearest point of its gas supply interconnect to the physical facilities of Power Plant II. The Company shall, in the doing of the work in connection with construction and maintaining of its pipelines, so far as it may be practical, avoid interfering with the use of any street, alley or other public thoroughfare and where the Company disturbs the surface of any street, alley, avenue or other public thoroughfare, it shall at its own expense and in a manner satisfactory to the City replace the paving or surface in substantially as good condition as before the work was commenced. If the Company fails to repair these streets within 15 days of the completion of those repairs or installation, the City may institute replacement of pavement and the Company shall reimburse the City for its costs for this replacement or repair.
Section 4. The Company is further obligated to institute an orderly maintenance of the pipelines for transmission and distribution of natural gas and shall not allow said system to fall into disrepair. These pipelines shall be capable of supplying and transporting natural gas from distance sources and for the lengths of time as the sources and these pipelines are reasonably capable of supplying under normal use.
Section 5. The Company, its successors and assigns, in the construction, maintenance and operation of its natural gas system, shall use all reasonable and proper precaution to avoid damage or injury to persons and property and shall hold and save harmless the City from any and all damage, injury and expense caused by the sole negligence of the Company, its successors and assigns or its agents or servants.
Section 6. It is understood between the parties that the Franchise Authority granted herein is in accordance with the contract terms of the Gas Transportation Agreement dated April 20, 1992 as amended by and between Augusta Pipeline Company, predecessor-in-interest to the Company, and the City. This Agreement sets forth the quality and character of the service to be performed, charges to be paid for this service and safety standards, procedures, terms and conditions under which the pipelines shall be constructed and operated.
Section 7. This ordinance shall become effective and be in force and become a binding contract between the parties, their successors and assigns, from and after its passage, approval and publication as required by law and acceptance by the Company.
Section 8. This ordinance shall constitute the entire agreement between the City and the Company relating to this franchise and same supersedes and cancels any prior understandings and agreements unless specifically referred to herein.
(07-20-2009)