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HomeMy WebLinkAbout1974-18 08-05 CCO • CITY OF BROOKLYN CENTER ORDINANCE NO. 74 -18 THE REPEAL OF AN ORDINANCE GRANTING TO NORTHERN STATES POWER COMPANY, A MINNESOTA CORPORATION, ITS SUCCESSORS AND ASSIGNS, PERMISSION TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN, IN THE CITY OF BROOKLYN CENTER, MINNESOTA, AN ELECTRIC DISTRIBUTION SYSTEM AND TRANSMISSION LINES, INCLUDING NECESSARY POLES, POLE LINES, AND FIXTURES AND APPURTENANCES; FOR THE FURNISHING OF ELECTRIC ENERGY TO THE CITY AND ITS INHABITANTS, AND OTHERS, AND TO USE THE STREETS, ALLEYS, AND PUBLIC WAYS OF SAID CITY FOR SUCH PURPOSES; PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF, AND PRESCRIBING THE RATES TO BE CHARGED THEREFOR THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER DOES ORDAIN AS FOLLOWS: Section 1: Chapter 9 of the City Ordinances is hereby repealed as follows: [Section 9 -201 through Section 9 -228.1 • Section 2: This ordinance shall become effective after adoption and upon thirty (30) days following its legal publication. Adopted this 5th day of Aua , 19 74 Mayor ATTEST: C erk Published in the official newspaper July 18, 1974 Effective Date _A Z-,-J_g (Brackets indicate matter to be deleted.) CITY OF BROOKLYN CENTER . ORDINANCE NO. 74 -18 THE REPEAL OF AN ORDINANCE GRANTING TO NORTHERN STATES POWER COMPANY, A MINNESOTA CORPORATION, ITS SUCCESSORS AND ASSIGNS, PERMISSION TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN, IN THE CITY OF BROOKLYN CENTER, MINNESOTA, AN ELECTRIC DISTRIBUTION SYSTEM AND TRANSMISSION LINES, INCLUDING NECESSARY POLES, POLE LINES, AND FIXTURES AND APPURTENANCES; FOR THE FURNISHING OF ELECTRIC ENERGY TO THE CITY AND ITS INHABITANTS, AND OTHERS, AND TO USE THE STREETS, ALLEYS, AND PUBLIC WAYS OF SAID CITY FOR SUCH PURPOSES; PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF, AND PRESCRIBING THE RATES TO BE CHARGED THEREFOR THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER DOES ORDAIN AS FOLLOWS: Section 1: Chapter 9 of the City Ordinances is hereby repealed as follows: [Section 9 -201. PURPOSES. Northern States Power Company, a corporation organized under the laws of the State of Minnesota, owns and operates property used • and useful in the production, transmission, distribution and sale of electricity in the City of Brooklyn Center. The City Council has determined that it is desirable, in the public interest, and to the advantage of the consumers of electricity in Brooklyn Center, that a franchise be granted to Company upon the terms and conditions contained herein. Company, in consideration of benefits accruing to it under the franchise agrees to supply electric service in Brooklyn Center upon the terms and conditions contained herein.] [Section 9 -202. DEFINITIONS. Subdivision 1. In this ordinance "Municipality ", "Municipal Council ", and "Municipal Clerk" mean, respectively, the City of Brooklyn Center, the Council of the City of Brooklyn Center, and the • Clerk of the City of Brooklyn Center. If at any time the powers of the Municipality, the Municipal Council, or the Municipal Clerk shall be transferred to any other ORDINANCE NO. - 74-18 authority, board, office, or officers, then such authority, board, officer, or officers • shall have the rights, powers, and duties herein given to the Municipality, the Municipal Council, and the Municipal Clerk, respectively. Subd. 2. "Company" means Northern States Power Company, a Minnesota Corporation, its successors and assigns. Subd. 3. "Metro Area" includes all areas served with electricity by Company in the Counties of Hennepin, Ramsey, Washington, Dakota, Anoka, Carver, and Scott. Subd. 4. "Metro Rate Authority" or "Authority" means the organization of municipalities created by joint agreement and amendments thereto, pursuant to Minnesota Statutes Section 471.59 and which is authorized to administer provisions of this ordinance as herein provided. The Authority consists of representatives of • all municipalities which adopt this uniform franchise ordinance. Subd. 5. "Executive Committee" or "Committee" means the committee appointed by the Authority. The Committee shall consist of not more than 15 members. The Committee shall have those powers specified in this franchise and those delegated to it by the Authority pursuant to the joint agreement. Subd. 6. "Party" means the Municipality, the Authority or Company. Subd. 7. "Person" may extend and be applied to bodies politic and corporate, and to partnerships and other unincorporated associations. Subd. 8. "Notice" means a writing served by any party or parties on any art or parties. In the case of Company, party p p Y, notice shall be mailed to an officer thereof at 414 Nicollet Mall, Minneapolis, Minnesota. In the case of Authority, notice shall be mailed to the Rate Administrator. In the case of Municipality, notice shall be mailed to the Municipal Clerk. ORDINANCE NO. 74 -18 Subd. 9. "Rate Administrator" means a professional person qualified and experienced in public utility regulatory matters. The Rate Administrator is appointed by the Authority.] [Section 9 -203. GRANT. Subdivision 1 . There hereby is granted to Company for the period extending to January 1, 1983, (subject to termination on December 31 , 1977 upon notice from Company to Municipality and Authority, or upon notice of Municipality to Authority and Company at least 90 days before said date of December 31 , 1977) the right and privilege of constructing according to specifically approved permits, operating, repairing, and maintaining in, on, over, under, and across the streets, alleys and public ways of Municipality, an electric distribution system and electric transmission lines, including all poles, pole lines, conduits, and fixtures and appurtenances, usually, conveniently, or necessarily . used in connection therewith, for the purpose of transmitting and furnishing electric energy for light, heat, power, and other purposes for public and private use in and to Municipality and the inhabitants thereof, and others, and for the purpose of transmitting electric energy into and through Municipality. The electric distribution system and transmission lines shall be so located as not to interfere with the safety and convenience of ordinary travel along and over said streets, alleys and public ways. Subd. 2. This ordinance is intended to regulate the exercise of the rights and privileges granted to Company herein. Nothing in this ordinance is to be construed to modify, alter or amend any statutory or charter power of the Municipality to regulate the use of its streets, alleys and public ways. Such • regulations, insofar as they do not affect the rate regulation and administration provisions of this ordinance, need not be identical among members of the Authority. ORDINANCE NO. 74 -18 Subd. 3. Nothing in this ordinance prevents the powers of the Authority . from being hereafter delegated by law to some other governmental authority.] [Section 9 -204. EXTENSIONS: SERVICE: RULES AND REGULATIONS. Subdivision 1 . Company shall provide efficient, adequate and nondiscriminatory service, at reasonable rates, to all members of the public within the Municipality who apply for such service in accordance with rules and regulations of Company. Subd. 2. Company may, from time to time, promulgate rules and regula- tions which are reasonably necessary in the conduct of its business. The rules and regulations may govern matters, including but not limited to, forms, contracts, extensions of service, curtailment of service, reconnection charges, billings, security deposits, and late payment charges, if any. Existing rules and regulations of Company shall be filed promptly with the Authority and shall become effective on filing. They shall be kept open for public inspection. Thereafter Company may file amendments thereto or additional rules and regulations. Within 60 days after such filing the Executive Committee may, on its own motion or on the request of Municipality, review such amendments or rules and regulations. The Committee, after public hearing, may by resolution disapprove any such amendment or rule and regulation which is unreasonable or unlawful.] [Section 9 -205. SERVICE INTERRUPTION. Subdivision 1. Company will provide continuous, adequate and nondiscriminatory electrical service in the Municipality. Subd. 2. Company's provision of electric service to its customers is subject to interruption and disturbance of service due to: (a) conditions beyond its control; ORDINANCE NO. 74 -18 (b) necessary maintenance and operation of its system; (c) effect of operations of any interconnecting electric systems; or (d) curtailment of electric service as may be prudent to maintain service to priority loads or to maintain the operating stability of Company's system; neither Company, Municipality, the Authority nor any customer shall be liable for damage or loss for interruption or disturbance of service due to said causes. The Company shall make reasonable effort to notify affected customers of scheduled interruption and disturbance of service. Company will not be in breach of this franchise for interruptions of service due to such causes. Subd. 3. Company will promptly take such action as may be practicable under the circumstances to remove the cause of any interruption, disturbance, or curtailment and to resume normal delivery of electric service.] [Section 9 -206. NONEXCLUSIVE FRANCHISE. This is not an exclusive franchise.] [Section 9 -207. RATES. Subdivision 1. The rates and charges imposed and collected by Company for services in the Metro Area shall be fair, just, reasonable and compensatory and designed to recover all reasonable costs of service therein, including a reasonable return as herein provided on the capital investment in the business under an economical and efficient management. Subd. 2. The rates charged to any class of customers will not cast an undue burden on any other class of customers nor shall any rates charged to customers within the same class of service cast an undue burden on other customers within that class. ORDINANCE NO. 74 -18 Subd. 3. The schedule of rates contained in Appendix A, attached and made a part hereof by reference, is effective as to all bills computed on regular meter readings on and after the effective date of this ordinance. The schedule shall remain in effect until changed in accordance with Section 8 of this fran- chise. The cost to the Company of any franchise fee, street rental charge, gross receipts taxes, or any other duties or imposts, imposed by the Municipality will be recovered by Company as a surcharge to such rates within the Municipality. Ad valorem taxes may not be recovered by a surcharge. Such surcharge will be equitably distributed among electric customers in the Municipality.] [Section 9 -208. RATE CHANGES. Subdivision 1. Company may change its rate structure by changing classification of rates, the number of blocks, size of blocks, the price differential between blocks, or by adding a new classification . of rates or by closing or withdrawing any existing rate classification or schedule. Any such change which does not result in a higher rate for an existing customer may be made upon twenty days notice to the Rate Administrator and shall be supported by data showing the desirability of the change and the reasonableness thereof. Other changes in rate structure shall be made under Subd. 2 of this section. Subd 2 h The rates contained in Appendix A shall remain in effect until March 15, 1974. On or before February 1 , 1974, and thereafter on or before February 1 of each year during the term of this ordinance, Company shall file notice with the Authority that it will either continue, decrease, or increase the rates or continue or change the rate structure which will become effective on bills rendered on and after March 15 of that year, to enable Company to realize Actual Net Earnings during the calendar year of filing equal to the Allowable ORDINANCE NO. 74 -18 Annual Return, as defined in Section 10 plus part or all of any debit balance or A less part or all of any credit balance in the Stabilization Reserve Account estab- lished under Section 15. The filing shall recite the proposed change or continuance and the forecasts substantiating it. Provided, however, in order to minimize or prevent excessive fluctuation in the rates, the Company may additionally once during a calendar year, but not prior to July 15 thereof, adjust the rates in the same manner as provided above. Subd. 3. The rates to become effective on and after March 15, 1974, pursuant to Subd. 2 of this section, shall be subject to a temporary reduction during the year 1974 totaling $6,000,000. Such reduction and any credit balance in the Stabilization Reserve Account resulting from 1973 operations will be applied only to the bills of customers located in those areas of the Metro Area in which • the base electric rates for residential service, general service, and large general service were no less than such base electric rates charged in the City of Minneapolis on January 1, 1973. Base electric rate means the charge to the customer for electric service excluding any franchise fee, street rental charge, gross receipts tax or duties or imposts, imposed by the municipality included in or added to said charge. Subd. 4. Increases or decreases in rates or the continuance of existing rates shall be based on forecasts for the calendar year of filing of expenses, capital costs and of the revenue required to enable Company to earn an amount equal to the Allowable Annual Return defined in Section 10, plus part or all of any debit balance or less part or all of any credit balance in the Stabilization Reserve Account as provided in Section 15. ORDINANCE NO. 74 -18 Subd. 5. Company will annually supply forecast data to the Rate • Administrator in accordance with the following schedule: Revenue Budget November 1 Expense Budget December 1 Capital Budget December 15 or on such later dates as the Rate Administrator may authorize. Subd. 6. On or before December 1 , 1975, and at intervals of no more than five years thereafter, Company shall furnish a current study of its rate structure to the Authority. Subd. 7. On or before March 1 of each year Company will supply Authority with a tabulation of customers and revenues attributable to each Municipality in the Metro Area for the previous calendar year.] • (Section 9 -209. RATES; RATE FILING. Subdivision 1. Any filing by Company with the Authority to change or continue any rates or rate structures as provided in Section 8, Subd. 2, may be altered, amended, or revised by the Executive Committee in conformance with and subject to the provisions of this ordinance. Subd. 2. The Rate Administrator shall make written recommendations as to the filing to the Executive Committee within 20 days of the filing. Subd. 3. Any alteration, amendment, or revision in the filing shall be made by written order of the Executive Committee which sets forth its findings and conclusions upon all material issues. The order shall be served on Company within 35 days after notice of the proposed change or continuance of rates has been filed with the Authority. ORDINANCE NO. 74 -18 Subd. 4. Company may obtain judicial review de novo of any Executive Committee order of alteration, amendment or revision of rates in the District Court of Hennepin County if proper application is made therefor within 30 days after service of the order of the Executive Committee upon Company. If judicial i review is applied for, the rate proposed by Company in Section 8, shall be in effect until the question of such alteration, amendment, or revision is finally determined by the court. In such review and determination Company has the burden of proof. At the time of applying for judicial review, Company shall, if ordered by the Court, file with the Clerk a corporate undertaking obligating it to comply with such relief as the court may order consistent with the provisions of this franchise. Subd. 5. The rates determined under Section 8 or this Section are the • "Metro Area Rates".] [Section 9 -210. RATE MAKING: DEFINITIONS. Subdivision 1. For the purposes of this ordinance, the terms defined in this section have the meanings given them. Subd. 2. Allowable Annual Return" means the product obtained by multiplying the Allowable Rate Base by the Allowable Rate of Return. Subd. 3. "Allowable Rate of Return" means the weighted average actual cost for the year of filing of 1) Senior Capital of Company and its utility sub- sidiaries and 2) the Allowable Return on Common Equity. The weight to be given to each class of capital shall be based on Company and its utility subsidiaries' actual average outstanding amount of each class throughout the year of filing. ORDINANCE NO. 74 -18 Subd. 4. "Allowable Return on Common Equity" means that return on • common equity capital determined pursuant to Section 12. Subd. 5. "Senior Capital" means all debt, including short -term debt, and preferred stock. Subd. 6. "Cost of Senior Capital" means the weighted average cost of all senior capital, where the cost of each issue is obtained by multiplying the principal amount of the issue by the interest rate in the case of debt and by the dividend rate in the case of preferred stock, and dividing by the net proceeds of the issue. Subd. 7. "Net proceeds" in the case of long -term debt capital means the principal amount issued, plus premiums received less issuance expense and discounts. In the case of short -term debt capital, the term means the sum of a) the principal amount of bank loans outstanding, and b) the principal amount of commercial notes, less prepaid interest. In the case of preferred stock, the term means the stated value plus premiums, less issuance expense and discounts. In the case of re- acquisition, retirement or refunding of long -term debt or pre- ferred stock, the call premiums, expenses and discounts are to be considered as part of the over -all cost of capital. Subd. 8. "Actual Net Earnings" for the year 1973 means actual gross revenues of Company received for electric utility service furnished in the Metro Area less operating expenses reasonably incurred in rendering such service. For subsequent years said term means gross revenues of Company for electric utility service furnished in the Metro Area computed at the Metro Area Rates, less operating expenses reasonably incurred in rendering such service. To the resulting net income shall be added that portion of the amount credited under the ORDINANCE NO. 74 -1 R Uniform System of Accounts to Allowance for Funds Used During Construction applicable to construction work in progress included in the Allowable Rate Base in Subd. 9 hereof. For the years 1973 and 1974 such allowance shall be com- puted at the rate of 8 %. Thereafter, the annual percentage rate applied to determine the Allowance for Funds Used During Construction shall be the lower of a) the nearest even one -half percent below the projected overall rate of return or b) the current incremental cost of financing new construction, and shall change only in increments of one -half percent, provided, however, that such annual percentage rate shall not be more nor less than that required by the Federal Power Commission. Operating expenses shall include Research and Development expenses and donations made for charitable, social, or community welfare purposes. Research and Development expenses shall be accounted for in the manner provided in the Uniform System of Accounts. Subd. 9. "Allowable Rate Base" means the average of net plant less cus- tomer contributed capital and plus working capital. Net plant means a) the original cost of electric utility plant and common utility plant used and useful in rendering electric service in the Metro Area, plus b) that portion of the original cost of plant held for future use and construction work in progress applicable to the Metro Area, less c) related booked reserves for depreciation and amortization. Customer contributed capital means amount related to service in the Metro Area contributed or advanced by customers for construction and amounts collected from customers through rates and charges for deferred operating expenses and taxes except where deduction of the deferred amount is specifically prohibited by Internal Revenue Laws. Said amounts shall include but are not necessarily ORDINANCE NO. 74 -18 limited to amounts credited under the current Federal Power Commission Uniform System of Accounts to Accounts 252 Customer Advances for Contruction, 255 Accumulated Deferred Investment Tax Credits (except that portion where deduction from the rate base is prohibited by the Internal Revenue Laws), 271 Contributions in Aid of Construction, 281 Accumulated Deferred Income Taxes - Accelerated Amortization, 282 Accumulated Deferred Income Taxes - Liberalized Depreciation, and 283 Accumulated Deferred Income Taxes - Other. Unless otherwise mutually agreed upon between Company and the Executive Committee, working capital means and includes the following, based on amounts allocable to the Metro Area: (a) cash working capital equal to one - eighth of operation and maintenance expenses excluding purchased power and one -half of fuel expenses, plus average compensating bank balances to support short -term borrowings, less the monthly average of accrued property and income taxes, but cash working capital shall not be less than zero; plus (b) monthly average pre- payments; plus (c) monthly average materials and supplies; plus (d) monthly average fuel stocks; plus (e) monthly average miscellaneous deferred debits.] [ Section 9 -211. ALLOWABLE RATES OF RETURN. Subdivision 1. At the time of an annual rate filing, a projection of Allowable Rate of Return shall be used as a basis for calculating allowable revenue for the calendar year of filing. At the close of such year the Allowable Rate of Return shall be determined and shall be used as a basis for the Allowable Annual Return. Subd. 2. Allowable Rates of Return and projections thereof shall be cal- culated to the nearest one - hundredth of one percent.] ORDINANCE NO. 74 -18 [Section 9 -212. ALLOWABLE RETURN ON COMMON EQUITY. • Subdivision 1. Company shall be allowed a Return on Common Equity for the Metro Area for the calendar year 1973 of 13.25 %. For the calendar year 1974 Company shall be allowed a Return on Common Equity for the Metro Area of 12.95 %. For years subsequent to 1974, Company or the Executive Committee may request a prospective change in the Allowable Return on Common Equity. Such requests shall be made during the period between November 15 and December 15 in any year, to be effective as of January 1 of the next year, by serving upon the other Party a notice stating the reasons supporting such change and specifying the proposed Allowable Return on Common Equity for the year. If no request is made the Allowable Return on Common Equity remains in effect. Subd. 2. The request for change in the Allowable Return on Common • Equity shall be reviewed by the Rate Administrator who shall forthwith set a date prior to January 15 for hearing upon such request. He shall give 10 days notice of such hearing published once in a legal newspaper in each county in the Metro Area. At least two days prior to the hearing date, any person may file with the Rate Administrator a written notice of intention to appear at the hearing and of the nature and extent of his participation. Only persons complying with this notice provision may be heard at the hearing. The Rate Administrator shall prescribe reasonable rules and regulations for the conduct of such hearings. Upon completion of the hearing, and no later than February 15, the Rate Adminis- trator will serve on Company and the Authority a written order determining the Allowable Return on Common Equity for the current year and setting forth his • findings and conclusions on all material issues relative to his determination. If no appeal is taken from the Rate Administrator's order of determination, the ORDINANCE NO. 74 -18 order is final. If an appeal is taken from the Rate Administrator's order of deter- mination, the order is an interim order and shall remain in effect until finally determined, provided that the effective Allowable Return on Common Equity for interim rates shall not be less than that existing at the time of the filing for a change in the Allowable Return on Common Equity. The Allowable Return on Common Equity finally determined shall be effective as of the proposed effective date. Subd. 3. Within ten days after receipt of the order of determination, any Party may appeal the order to a hearing panel by filing a notice of appeal with the Authority and Company. The panel shall consist of three members of professional standing, each having one vote. The members of the hearing panel shall be selected as follows: Within 20 days of notice of appeal the Company • and the Authority shall each appoint a panel member and each shall immediately notify the other of such appointment. The two panel members so appointed shall within five days after the second member is appointed, select a third panel member. If the first two panel members are unable to agree on a third panel member, the third panel member shall be appointed by the Chief judge of the Hennepin County District Court upon application of either Company or Authority with five days notice to the other. In the event either Company or Authority fails within said twenty days to appoint a panel member, the member appointed by the other party shall proceed as a single member and issue his order, which shall constitute the order of the panel. Subd. 4. The review by the panel of the Rate Administrator's determina- tion shall be de novo and the panel shall consider all evidence material and relevant to the issues raised by such appeal. The hearing shall be conducted in the manner prescribed by Chapter 15, Minnesota Statutes, for conduct of ORDINANCE NO. 74 -18 administrative hearings. The burden of proof shall be upon the appellant. Only those Parties and Persons who appeared before the Rate Administrator may appear before the panel. Subd. 5. The panel shall determine the Allowable Return on Common Equity by written order served on Company and the Authority, which order shall set forth its findings and conclusions, including the bases therefor, upon all material issues relative to such determination. The determination of the panel shall be made within 60 days after the third panel member is selected. If no appeal is taken from the panel's order of determination the order is final. Subd. 6. Any Party aggrieved by a final order of the hearing panel is entitled to judicial review thereof in the District Court of Hennepin County if proper application is made therefor within thirty days after the hearing panel has • served its order. The review shall be conducted by the Court without a jury and shall be confined to the record, except that in cases of alleged irregularity in procedure before the hearing panel not shown on the record, testimony thereon may be taken by the Court. Except as otherwise provided, all proceedings shall be conducted according to the provisions of Minnesota Statutes Sections 15.0424 - 15.0426. Subd. 7. The Court may affirm the decision of the hearing panel or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the appellant have been prejudiced because the hearing panel's findings or conclusions are: (a) In violation of constitutional provisions; or • (b) In excess of the authority conferred upon said hearing panel by this ordinance; or ORDINANCE NO. 74 -18 (c) Made upon unlawful procedures; or (d) Affected by other error of law; or (e) Unsupported by substantial evidence in view of the entire record as submitted; or (f) Arbitrary or capricious.] [ Section 9 -213. STANDARDS FOR DETERMINING ALLOWABLE RETURN ON COMMON EQUITY. The Allowable Return on Common Equity is determined by and must satisfy the following standards: (a) The Allowable Return on Common Equity shall permit Company to earn a return on its equity investment in property which it employs for the convenience of the public equal to that generally being made at the same • time and in the same general part of the country on similar investments in other business undertakings which are attended by corresponding risks and uncertainties. (b) The Allowable Return on Common Equity shall be reasonably sufficient to assure confidence in the financial soundness of Company. (c) The Allowable Return on Common Equity shall be adequate under efficient and economical manage- ment to maintain and support Company's credit and enable it to raise the money necessary for the proper discharge of its public duties.] ORDINANCE NO. 74 -18 [Section 9 -214. ACTUAL NET EARNINGS. Subdivision 1. In the . computation of Actual Net Earnings, appropriate items may be amortized or accrued according to generally accepted accounting principles and, except as otherwise provided in this ordinance for specific items, the amounts and rates of amortization or accrual shall be based upon the actual experience of Company where such experience exists. Subd. 2. An allocation shall be made by Company of operating expenses and utility plant within and outside the Metro Area on a basis that reasonably reflects the occurrence of such expenses and plant for rendering service within and outside the Metro Area.] [Section 9 -215. STABILIZATION RESERVE ACCOUNT. Subdivision 1. Actual Net Earnings greater or less than the Allowable Annual Return in any calendar year shall be credited or debited to an account designated the "Stabilization Reserve Account". Subd. 2. Any credit balance in said account shall be credited monthly with interest computed at the current prime interest rate. Subd. 3. All or part of any debit or credit balance in said account may be amortized over not more than two years to balance earnings and to minimize fluctuations and stabilize rates in the Metro Area. By agreement of the Executive Committee and Company all or part of any debit or credit balance in said account may be amortized over more than two years to balance earnings and to minimize fluctuations and stabilize rates in the Metro Area. Subd. 4. Any credit balance in the Stabilization Reserve Account shall not • be used to benefit customers located in Municipalities where rates lower than the Metro Area Rates were charged in the period during which such credit accrued. ORDINANCE NO. 74 - 18 Subd. 5. Any balance in said account at termination of the rate - making i process in the Metro Area provided for in this franchise shall be promptly refunded or otherwise recognized for customer's benefit.] [ Section 9 -216. RESERVE FOR DEPRECIATION AND AMORTIZATION OF UTILITY PLANT. Subdivision 1. The Company's books of account shall contain an account designated as "Reserve for Depreciation and Amortization of Utility Plant" , or similar caption, which shall show accumulated charges to operating expenses on account of depreciation adjusted for salvage and retire- ments in accordance with Subd. 2. of this section. The annual charges to operating expenses for depreciation of depreciable property used and useful in rendering electric service in the Metro Area shall be an amount designed to recover ratably the original cost of such depreciable property over the estimated average service life of each group of property. Annual depreciation rates shall be revised periodically so as to reflect all factors bearing on the recovery of the original cost of such depreciable property over its estimated average service life. At least once every five years the Company shall prepare a depreciation study analyzing retirement experience and other factors relevant to the establishment of depreciation rates. Such study shall be used as a guide in determining the depreciation rates to be used to recover the original cost of depreciable property. Subd. 2. The actual original cost of property abandoned, otherwise retired from service or not used and useful in the public service for any cause, shall be credited to the appropriate plant account. Such original cost plus the costs incidental to said abandonment or retirement shall be debited to the Reserve for Depreciation and Amortization of Utility Plant, subject, however, to the provisions of Subd. 3 of this section. The salvage value received and any other amounts recovered from said property shall be credited to said Reserve. ORDINANCE NO. 74 -18 Subd. 3. When a substantial segment of Company's utility plant is i abandoned or retired from service because of unusual obsolescence or property damage and such property is not fully covered by the Reserve for Depreciation and Amortization of Utility Plant, other reserves or by insurance, the unrecovered balance of such property after consideration of tax effects shall be credited to said Reserve or other appropriate reserve and be debited to a deferred account designated as "Extraordinary Property Losses ", or similar caption. Debits to said deferred account shall be amortized by charges to operating expenses as provided for in Section 14, and the unamortized balance shall be included in the Allowable Rate Base. Subd. 4. If the actual original cost is not shown by the books and records of Company or its predecessors, such amount shall be estimated and a record be made by Company showing the facts upon which said estimate was based, the manner in which it was determined, and the person by whom it was made.] [Section 9 -217. ACCOUNTS AND RECORDS. Subd. 1. All expense items, whether charged directly and entirely in a calendar year or amortized or accrued over a longer period, all revenue items and all balance sheet items shall be recorded in substantial accordance with the applicable provisions of the Uniform System of Accounts, as amended from time to time, by the Federal Power Commission. When optional accounting is permitted under the Federal Power Commissions Uniform System of Accounts, Executive Committee and Company shall agree on the option to be followed for book and rate making purposes. Subd. 2. Company shall file with the Authority (a) schedules showing all of its rates and charges, (b) forms of service contracts or agreements, and (c) any rules and regulations relating to rates, charges or service by Company ORDINANCE NO. 74 -18 to its customers in the Metro Area, all of which shall be open for public inspec- tion. Such schedules, forms and rules and regulations shall also be kept by Company, and shall be available at all reasonable times for public inspection. Subd. 3. Company shall keep, maintain and preserve proper and accurate engineering, accounting, financial and statistical records relating to the con- struction, cost, maintenance and operation of its utility plant which show all financial transactions, including receipts and disbursements and the particulars thereof. Subd. 4. The Authority shall have access at all reasonable times to inspect, examine or audit all of the accounts, books, records, reports, contracts, documents and papers of Company relating to its electric operations. Subd. 5. Procedures and Accounting Manual. As soo n aspracticable • after the effective date of this Ordinance, Company and the Rate Administrator shall compile a manual of procedures and accounting methods to implement this ordinance in accordance with the standards set forth herein. The terms of said manual shall apply to all rate filings and determinations until changed, modified or amended by mutual agreement of the Company and the Rate Administrator. Subd. 6. Company shall prepare and file with the Rate Administrator statements for its electric utility operations as provided in the Procedures and Accounting Manual.) [Section 9 -218. INDEMNIFICATION. Company shall indemnify, keep, and hold Municipality, its officers, employees and agents free and harmless from any and all liability on account of injury to persons or damage to property • occasioned by the construction, maintenance, repair, removal or operation of Company's property located in, on, over, under, or across the streets, alleys ORDINANCE NO. 74 -18 and public ways of Municipality, unless such injury or damage is the result of • the negligence of Municipality, its employees, officers or agents, or results from the performance in a proper manner of acts reasonably determined to be hazardous by Company, but such performance is, nevertheless, ordered or directed by Municipality after notice of such determination by Company. In the event that suit shall be brought against Municipality under circumstances where the above agreement to indemnify applies, Company, at its sole cost and expense, shall defend Municipality in such suit if written notice of the suit is promptly given to Company within a period wherein Company is not prejudiced by lack of such notice. If such notice is not seasonably given as hereinbefore provided, Company shall have no duty to indemnify nor defend. If Company is required to indemnify and defend, it will thereafter have complete control of such litigation, • but Company may not settle such litigation without the consent of the Municipality unless Municipality unreasonably withholds such consent.] [Section 9 -219. RELOCATIONS. Subdivision 1. Whenever Municipality shall grade, regrade or change the line of any street or public place or otherwise improve any street or public place or construct or reconstruct any sewer or water system therein and shall, with due regard to seasonal working conditions, reasonably order Company to relocate permanently its electrical facilities located in said street or public place, Company shall relocate its facilities at its own expense. Municipality shall give Company reasonable notice of plans requiring such relocation. Nothing in this ordinance contained shall deprive Company of its rights under Minnesota Statutes Section 161 .46, as amended. is Subd. 2. Where the Municipality orders Company to temporarily relocate any of its facilities, Company shall proceed with such relocation. If such ORDINANCE NO. 74 -18 relocation is done without an agreement first ben made as to who shall a for being pay • the relocation cost, such relocation of the facilities by Company shall not be construed as a waiver of its right to be reimbursed for the relocation cost. If Company claims that it should be reimbursed for such relocation costs, it shall notify the Municipality within ten (10) days after receipt of such order. Subd. 3. Except where required primarily for a municipal improvement project, the vacation of any street, alley or public way, after the installation of electrical facilities, shall not operate to deprive Company of the right to operate and maintain such electrical facilities, until the reasonable costs of relocating the same and the loss and expense resulting from such relocation are first paid to Company.] [Section 9 -220. TREE TRIMMING. Company shall have the permission • and authority to trim all trees and shrubs in the streets, alleys and public ways of Municipality, interfering with the proper construction, operation, repair, and maintenance of any poles, pole lines, conduits, fixtures or appurtenances, installed in pursuance of the authority hereby granted, provided that Company shall save Municipality harmless from any liability in the premises.] [ Section 9 -221. FRANCHISE TERMINATION. If Company shall be in default in the performance of any of the material terms and conditions of this ordinance and shall continue in default for more than ninety (90) days after receiving notice from the Municipality of such default, the Municipal Council may, by ordinance duly passed and adopted, terminate all rights granted under this ordinance to Company. The notice of default shall be in writing and shall • specify the provisions of this ordinance in the performance of which it is claimed that Company is in default. The validity and reasonableness of any ordinance so ORDINANCE NO. 74 -18 passed declaring a forfeiture of the rights and privileges granted by this fran- c chise ordinance shall be subject to review by a court of competent jurisdiction.] [Section 9 -222. CHANGE IN FORM OF GOVERNMENT. Any change of the form of government of the Municipality as authorized by the State of Minnesota shall not affect the validity of this franchise. Any municipal cor- poration succeeding the Municipality shall, without the consent of Company, succeed to all the rights and obligations of the Municipality provided in this franchise.] [Section 9 -223. COSTS OF ADMINISTRATION. The Company agrees to pay to the Authority, an initial sum of $150, 000 within 30 days after written acceptance of this franchise by Company, and not less than $160,000 per year payable in quarterly installments commencing on January 10, 1974, to be . allowed as an operating expense to the Company and which shall be used to secure compliance with this ordinance, and for such other purposes relating to the Company's costs of service as the Authority shall deem necessary. The amount of such annual payment shall be subject to review and revision by the Authority and Company at the end of 1975 and thereafter as mutually agreed to.] [Section 9 -224. ASSIGNMENT. Company upon notice to the municipality shall have full right and authority to assign all rights conferred upon it by this ordinance to any person, persons, firm or corporation. The assignee of such rights, by accepting such assignment, shall become subject to the terms and provisions of this ordinance.] [ Section 9 -225. WRITTEN ACCEPTANCE. Company shall, if it accepts this ordinance and the rights hereby granted, file a written acceptance of the rights hereby granted with the Municipal Clerk within 30 days after the effective date of the agreement establishing the Authority.] ORDINANCE NO. 74 -18 [Section 9 -226. REVOCATION. If this uniform franchise ordinance is not adopted by July 31, 1973, by Municipalities in which 60% of Company's electric customers in the Metro Area were located on January 1 , 1973, the Municipal Council may revoke the same. However, this right of revocation shall terminate when the Authority is established. For the purpose of this section each Customer Account of Company shall be deemed a customer. Company shall notify the Municipal Clerk in writing whether the above condition has been met. If revoked, the provisions of this ordinance shall be without prejudice in any subsequent proceeding.] [Section 9 -227. EFFECT ON EXISTING FRANCHISE. It is the intention of the Council that this franchise ordinance is effective upon compliance with Section 25 and that it shall thereafter govern the rights and duties of Company . and Municipality until its termination. It is further the intention of the Council that the existing ranchise ranted to Company b the Village of Brooklyn Center, g g p Y Y g Y , dated September 23, 1953, is not repealed but is superseded by the terms of this ordinance and that upon termination of this ordinance the existing franchise p g will continue to govern the rights and duties of Company and Municipality until the termination thereof.] [Section 9 -228. PUBLICATION EXPENSE. The expense of publication of this franchise ordinance shall be paid by Company.] Section 2: This ordinance shall become effective after adoption and upon thirty (30) days following its legal publication. Adopted this 5th day of 19 74 . ORDINANCE NO. 74-18 Mayor ATTEST: Clerk Published in the official newspaper Tilly 1 R 1 q74 Effective Date August 17, 197 (Brackets indicate matter to be deleted.) Seal