ORDINANCE GRANTING

 

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                                                                    EXHIBIT 10.1

 

 

                 CITY OF HOUSTON, TEXAS, ORDINANCE NO. 2005-692

 

AN ORDINANCE GRANTING TO CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC THE RIGHT,

PRIVILEGE AND FRANCHISE TO USE THE PUBLIC RIGHTS-OF-WAY TO USE, LICENSE, OR

EXPLOIT THE COMPANY'S FACILITIES WITHIN THE PUBLIC RIGHTS-OF-WAY TO CONDUCT AN

ELECTRIC DELIVERY BUSINESS IN THE CITY AND FOR SUCH OTHER BUSINESS PURPOSES AS

THE COMPANY MAY DESIRE FROM TIME TO TIME, SPECIFICALLY INCLUDING, BUT NOT

LIMITED TO, THE GRANTING OF ACCESS TO THOSE FACILITIES FOR THE DELIVERY OF

BROADBAND THROUGH POWER LINES OR SIMILAR SERVICE WITHIN THE CITY OF HOUSTON,

TEXAS.

 

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         WHEREAS, City of Houston, Texas Ordinance No. 1957-929 (the "1957

Franchise") granted an electrical lighting and power franchise to Houston

Lighting & Power Company, for a term expiring August 21, 2007; and

 

         WHEREAS, Company is the successor to Reliant Energy,

Incorporated.("REI"), which was the successor to Houston Lighting & Power

Company, by virtue of a corporate restructuring of REI that occurred in August

2002, in which REI was merged with and into an indirect wholly owned subsidiary

of CenterPoint Energy, Inc., which was converted into a limited liability

company and was renamed CenterPoint Energy Houston Electric, LLC; and

 

         WHEREAS, Company owns and operates a electric delivery business within

the corporate limits of the City and Company is willing to continue to provide

electric delivery services within the corporate limits of the City; and

 

         WHEREAS, Company and the City have reached agreement on the terms and

conditions of a renewal franchise; and

 

         WHEREAS, it is hereby found and determined by the City Council of the

City of Houston that it is in the best interests of the City that a franchise to

use the public rights-of-way to conduct an electric delivery business in the

city and for such other business purposes as the company may desire from time to

time be granted to the Company, subject to the terms and conditions described in

this ordinance; NOW, THEREFORE,

 

BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HOUSTON, TEXAS:

 

         SECTION 1. That the facts contained in the preamble to the Ordinance

are determined to be true and correct and are hereby adopted.

 

         SECTION 2. Definitions.

 

         Annual Adjustment Factor has the meaning set forth in Section 11 below.

 

 

 

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         Annual Franchise Fee has the meaning set forth in Section 11 below.

 

         Base Amount has the meaning set forth in Section 11 below.

 

         Broadband over Power Lines (BPL) or "Access BPL" has the same meaning

as that used by the Federal Communications Commission in Section 15.3 of its

Rules as reprinted below:

 

                  Access Broadband over Power Line (Access BPL). A carrier

                  current system installed and operated on an electric utility

                  service as an unintentional radiator that sends radio

                  frequency energy on frequencies between 1.705 MHz and 80 MHz

                  over medium voltage lines or over low voltage lines to provide

                  broadband communications and Is located on the supply side of

                  the utility service's points of interconnection with customer

                  premises. Access BPL does not include power line carrier

                  systems as defined in Section 15.3(t) of this part or In-House

                  BPL as defined in Section 15.3(gg) of this part.

 

         City means the City of Houston, Texas, a municipal corporation of the

State of Texas.

 

         City Council means the governing body of the City, or its designee.

 

         Company means CenterPoint Energy Houston Electric, LLC, a Texas limited

liability company.

 

         Effective Date means the date on which this Franchise becomes effective

pursuant to Section 4 below.

 

         First Rate Case has the meaning set forth in Section 14 below.

 

         Force Majeure means forces or conditions not reasonably within the

control of a party, including a strike; war or act of war (whether an actual

declaration of war is made or not); insurrection; riot; act of public enemy;

accident; fire; flood or other act of God; sabotage; shortages in materials,

supplies and equipment; governmental regulations, limitations and restrictions

as to the use and availability of materials, supplies and equipment and as to

the use of services; unforeseen and unusual demands for service; or other

events, where the affected party has exercised all due care in the prevention

thereof and such causes or other events are without the fault or negligence of

the affected party.

 

         Franchise means this Ordinance and the rights and privileges granted by

this Ordinance.

 

 

 

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         Franchise Area means the area within the boundaries of the City as of

the Effective Date and as same may change from time to time during the term of

the Franchise.

 

         Other Services means any service exclusive of the transmission and

distribution of electricity provided or allowed to be provided through the use

or license of the System for a fee, including but not limited to BPL.

 

         Person means any individual, firm, partnership, association,

corporation, company or organization of any kind.

 

         Public Rights-of-Way means the areas in, under, upon, over, across, and

along any and all of the present and future Streets or streams now or hereafter

owned or controlled by City.

 

         PUC means the Public Utility Commission of Texas or its successor

agency with equivalent jurisdiction.

 

         Retail Customer means any Person taking delivery of electricity from

Company, at a point of delivery within the Franchise Area.

 

         Rider HOU Amount has the meaning set forth in Section 11 below.

 

         Street means the surface and the space above and below any public

street, road, highway, alley, bridge, sidewalk, or other public place or way.

 

         System means the Company's facilities erected, constructed, maintained,

operated, used, extended, removed, replaced, and repaired, as necessary, by

Company pursuant to this Franchise, including without limitation, all poles,

pole lines, towers, transmission lines, wires, guys, conduits, cables, and other

desirable instrumentalities and appurtenances (including telegraph and telephone

poles and wires for use of Company), necessary and proper for the purpose of

transmitting and distributing electricity to the City and the inhabitants of

said City or other Persons, for any purpose for which electricity may be used.

 

         Tracking Rider has the meaning set forth in Section 14 below.

 

         SECTION 3. Subject to the terms, conditions and provisions of this

Franchise, City hereby grants to Company the right, privilege and franchise to

use City's Public Rights-of-Way to construct, maintain, operate and use

Company's System to conduct within the City an electric delivery business and

the right to use, license, or exploit the System within the Public Rights-of-Way

for Other Services. This Franchise does not restrict City's right to impose

reasonable fees upon third parties for the use of the Public Rights-of-Way to

provide Other Services, including the right to impose fees upon providers of BPL

service, so long as such fees are assessed on a non-discriminatory basis with

those charged to other companies providing services competitive with the Other

Services.

 

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         SECTION 4. Upon the filing with City by Company of the acceptance

required hereunder, this Franchise shall be in full force and effect for a term

and period of thirty (30) years from and after the first day of July, 2005.

 

         SECTION 5. All poles erected by Company pursuant to the authority

herein granted shall be of sound material and reasonably straight, and shall be

so set that they shall not interfere with the flow of water in any gutter or

drain, and so that the same shall interfere as little as practicable with the

ordinary travel, on the Streets or other Public Rights-of-Way. Within the

Streets or other Public Rights-of-Way of City, the location and route of all

poles, stubs, guys, anchors, lines, conduits and cables placed and constructed

and to be placed and constructed by Company in the construction and maintenance

of Company's System in the City, shall be subject to the reasonable and proper

regulation, control and direction of City, or of any City official to whom such

duties have or may be duly delegated, which regulation and control shall

include, but not by way of limitation, the right to require in writing, to the

extent provided in Section 10, the relocation of Company's System at Company's

cost within the Streets or other Public Rights-of-Way whenever such shall be

reasonably necessary to accommodate City Public Works improvement projects

within such Streets or Public Rights-of-Way.

 

         SECTION 6. In consideration for the compensation set forth in Sections

11 and 15, City agrees that if City sells, convoys, or surrenders possession of

any portion of the Public Right-of-Way that is being used by Company pursuant to

this Franchise, City, to the maximum extent of its right to do so, shall first

grant Company an easement for such use; and the sale, conveyance, or surrender

of possession of the Public Right-of-Way shall be subject to the right and

continued use of Company.

 

         SECTION 7. Company and its contractors shall give City reasonable

notice of the dates, location, and nature of the work to be performed on the

System within the Public Rights-of-Way. Following completion of work in Public

Rights-of-Way, Company shall repair the affected Public Rights-of-Way as soon as

possible, but in all cases shall comply with all City ordinances governing time

periods and standards relating to excavating in the Public Rights-of-Way. No

Street or other Public Right-of-Way shall be encumbered by construction,

maintenance or removal work by Company for a longer period than shall be

necessary to execute such work.

 

         SECTION 8. The service furnished hereunder to City and its inhabitants

shall be first-class in all respects, considering all circumstances, and Company

shall furnish the grade of service to Retail Customers as provided by its rate

schedules and shall maintain its System in reasonable operating condition during

the continuance of this Franchise. Company's tariffs shall govern the rates,

access to service, terms and quality of electric delivery services provided by

Company. An exception to this requirement is automatically in effect when due to

Force Majeure. In any Force Majeure event, Company shall do all things

reasonably within its power to restore normal service.

 

         SECTION 9. Company, on the written request of any person, shall remove

or raise or lower its wires temporarily to permit construction work in the

vicinity thereof or

 

 

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to permit the moving of houses or other bulky structures. The expense of such

temporary removal, raising or lowering of wires shall be paid by the benefited

party or parties, and Company may require such payment in advance, being without

obligation to remove, raise, or lower its wires until such payment has been

made. Company shall be given not less than forty-eight (48) hours advance notice

to arrange for such temporary wire changes.

 

         SECTION 10. Company shall construct, operate, and maintain its

transmission and distribution facilities in substantial accordance with

Company's own Service Standards and the National Electrical Safety Code

("NESC"). Company shall determine the specific location and the method of

construction and types of materials used in building, maintaining, and operating

Company's transmission and distribution facilities. City shall require its

employees and contractors performing work for the benefit of City to comply with

all applicable laws, statutes codes and standards (including, without

limitation, Section 752 of the Texas Health and Safety Code, as the same may be

amended or replaced, and the NESC) when working near Company's System and to

report as soon as practicable any damage done to Company's System. Company also

agrees to require its employees and contractors performing work for the benefit

of City to comply with all applicable laws, statutes codes and standards

(including, without limitation, Section 752 of the Texas Health and Safety Code,

as the same may be amended or replaced, and the NESC) when working near City's

facilities and to report as soon as practicable any damage done to City's

facilities. Company shall relocate facilities within Public Rights-of-Way at

Company's own expense, exclusive of street lighting and facilities installed for

service directly to City, to accommodate City Public Works improvement projects,

including but not limited to street widening, change of grade, water, sewer, or

drainage upgrades, construction or reconstruction projects and