HomeMy WebLinkAbout2025-4576 - Ordinance - 02/27/2025ORDINANCE NO: 2025-4576
AN ORDINANCE GRANTING TO ATMOS ENERGY CORPORATION, MID-TEX DIVISION, A
TEXAS AND VIRGINIA CORPORATION, ITS SUCCESSORS AND ASSIGNS, A FRANCHISE
TO CONSTRUCT, MAINTAIN, AND OPERATE PIPELINES AND EQUIPMENT IN THE CITY
OF COLLEGE STATION, BRAZOS COUNTY, TEXAS, FOR THE TRANSPORTATION,
DELIVERY, SALE, AND DISTRIBUTION OF GAS IN, OUT OF, AND THROUGH SAID CITY
FOR ALL PURPOSES; RESERVING MUNICIPAL AUTHORITY; PROVIDING FOR
INDEMNITY TO THE MUNICIPALITY AND INSURANCE BY ATMOS ENERGY
CORPORATION; REQUIRING BOOK AND RECORD KEEPING; PROVIDING FOR THE
PAYMENT OF A FEE OR CHARGE FOR THE USE OF THE PUBLIC RIGHTS -OF -WAY; AND
PROVIDING THAT SUCH FEE SHALL BE IN LIEU OF OTHER FEES AND CHARGES,
EXCEPTING AD VALOREM TAXES; PROVIDING AN EFFECTIVE DATE AND TERM; AND
REPEALING ALL PREVIOUS GAS FRANCHISE ORDINANCES.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS:
SECTION 1. GRANT OF AUTHORITY:
A. The City of College Station, Texas, hereinafter called "City," hereby grants to Atmos Energy
Corporation, Mid -Tex Division, hereinafter called "Atmos Energy" or the "Company", its
successors and assigns, consent to use and occupy the present and future Public Rights -of -Way for
the purpose of laying, maintaining, constructing, protecting, operating, and replacing therein and
thereon the System to deliver, transport, and distribute gas in, out of, and through City for persons,
firms, and corporations, including all the general public, and to sell gas to persons, firms, and
corporations, including all the general public, within the City corporate limits, as such limits may
be amended from time to time during the term of this franchise. Atmos Energy acknowledges that
by this Franchise it obtains no rights to, or further use of, the Public Right -of -Way other than those
expressly granted herein. Atmos Energy acknowledges and accepts at its own risk that the City may
use future Public Rights -of -Way in which Atmos Energy's System is located in a manner
inconsistent with Atmos Energy's use of such Public Rights -of -Way.
B. The provisions set forth in this Ordinance represent the terms and conditions under which Atmos
Energy shall construct, operate, and maintain the System. In granting this franchise, the City does
not in any manner surrender or waive its sovereign immunity, its governmental immunity, its
regulatory or other rights and powers under and by virtue of the Constitution and statutes of the
State of Texas as the same may be amended, nor any of its rights and powers under and by virtue
of present or future ordinances of the City. Atmos Energy, by its acceptance of this Franchise,
agrees that all such lawful regulatory powers and rights as the same may be from time to time
ORDINANCE NO: 2025-4576 Page 2 of 17
vested in the City shall be in full force and effect and subject to the exercise thereof by the City at
any time.
SECTION 2. DEFINITIONS: For the purpose of this Franchise, the following words and
phrases shall have the meaning given in this section. When not inconsistent with the context, words used
in the present tense include future tense, words in the plural number include the singular number, and words
in the singular number include the plural number. The word "shall" is mandatory and "may" is permissive.
Words not defined in this section shall be given their common and ordinary meaning.
"Affiliate" means any entity controlling, controlled by or under common control with the entity in
question. As used in this definition, the term "control" means, with respect to an entity that is a corporation, the
ownership, directly or indirectly, of more than 50% of the voting securities of such entity or, with respect to an
entity that is not a corporation, the power to direct the management or policies of such entity, whether by
operation of law, by contract or otherwise.
"Atmos Energy" or "Company" means Atmos Energy Corporation's Mid -Tex Division, its successors
and assigns, but does not include its affiliates, subsidiaries or any other entity in which it has an ownership
interest, with its principal office at 5430 LBJ Freeway, Dallas, Texas 75240.
"City" means the municipal corporation designated as the City of College Station and includes the
territory as currently is or may in the future be included within the boundaries of the City, with its principal
office at 1101 Texas Ave. S., College Station, Texas 77840.
"City Council" means the governing body of the City of College Station, Texas.
"City Manager" means the City Manager of the City, or his or her duly authorized representative.
"Contributions in Aid of Construction" or "CIAC" means monies received by Atmos Energy for
construction, removal, or relocation of facilities in the City's Public Rights -of -Way and does not include
donated property or reimbursements received for damages to the System.
"Customer" means all persons, businesses, industry, governmental agencies, and any other entity
whatsoever, located, in whole or part, within the City that are or may be served by Atmos Energy hereunder.
"Emergency" means sudden and unforeseeable damage to or malfunction of a portion of the System
that creates a threat to life, health, or property.
"Franchise" or "Agreement" or "Ordinance" or "Franchise ordinance" means the rights and obligations
of the City and Atmos Energy set forth in this Franchise ordinance, as the same may be amended from time to
time, and includes those rights and duties provided under the laws of Texas and of the United States.
"Gas" means such gaseous fuels as natural, artificial, synthetic, liquefied natural gas, liquefied
petroleum, manufactured, or any mixture thereof.
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"Gross Revenues" means:
(A) all revenues received by Atmos Energy from the sale of gas to all classes of customers
(excluding gas sold to governmental customers, industrial customers, and another gas utility in the City for
resale of gas to its customers within City) within the City including base rate revenues and revenues from
the Company's purchased gas adjustment tariff;
(B) "Gross Revenues" shall also include CIAC and the following "miscellaneous charges":
charges to connect, disconnect, or reconnect gas within the City, charges to handle returned checks from
consumers within the City, and State gross receipts fees.
(C) "Gross Revenues" shall not include:
(1) revenues billed but not ultimately collected or received by Atmos Energy;
(2) the revenue of any affiliate or subsidiary of Atmos Energy;
(3) sales taxes and franchise fees paid to the City;
(4) interest or investment income earned by Atmos Energy; and
(5) monies received from the lease or sale of real or personal property, provided,
however, that this exclusion does not apply to the lease of facilities within the
Public Rights -of -way.
"Public Rights -of -Way" means the public streets, medians, boulevards, roads, lanes, alleys,
highways, public utility easements, viaducts, and bridges across water ways and other public places that are
deeded or dedicated to the City and are available for Atmos Energy's non-exclusive use.
"Railroad Commission" means the Railroad Commission of the State of Texas or other authority
succeeding to the regulatory powers of the Railroad Commission.
"System" and/ or "System Facilities" means all of Atmos Energy's pipes, pipelines, gas mains,
laterals, feeders, regulators, meters, fixtures, connections or other appurtenant equipment used in or incident
to providing delivery, transportation, distribution, supply, and sales of natural gas for heating, lighting,
power, and any other purpose for which natural gas may now or hereafter be used, located within the
corporate limits of the City.
SECTION 3. COMPLIANCE WITH LAW: Atmos Energy, during the term of this Franchise,
shall be subject to and comply with all applicable local, state, and federal laws, including the rules and
regulations of any and all agencies thereof, whether presently in force or whether enacted or adopted at any
time in the future. This Franchise shall in no way affect or impair the rights, obligations, or remedies of
the parties under the Gas Utility Regulatory Act, or other state or federal law. Nothing herein shall be
deemed a waiver, release, or relinquishment of either party's right to contest, appeal, or file suit with respect
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to any action or decision of the other party, including ordinances adopted by the City, that it believes is
contrary to any federal, state, or local law or regulation. In constructing, maintaining, and operating the
System, Atmos Energy shall act in a good and workmanlike manner, observing industry standards of
engineering and workmanship and using materials of good and durable quality. Atmos Energy shall comply
in all respects with applicable codes and industry standards.
SECTION 4. CONSTRUCTION, MAINTENANCE, OPERATION & RELOCATION OF
ATMOS ENERGY FACILITIES:
A. Atmos Energy shall lay, maintain, construct, operate, and replace its pipes, mains, laterals, and
other equipment to minimize interference with traffic, place or cause to be placed appropriate
barriers to mark excavations or obstructions, and restore to approximate original condition all
Public Rights -of -Way that it may disturb. Before any work is commenced, the Company must
obtain any permits required by the City for construction within the Public Rights -of -Way in
accordance with the ordinances or process in place at the time the work is performed. It shall not
be necessary for the Company to obtain permits for the laying of service lines from the mainline
pipes of the Company to customers if no work will take place in the Public Rights -of -Way. It shall
not be necessary for the Company to obtain a permit in advance of resolving an Emergency. In the
event of an Emergency, the Company shall notify the City Manager no later than ten (10) days after
the last day of the Emergency, along with information that describes the circumstances of the
Emergency. If Atmos Energy damages any City facilities, Atmos Energy shall notify the City
immediately and shall reimburse the City for the City' s cost of repairing the damage. If City
damages any Atmos Energy facilities, the City shall notify Atmos Energy immediately and shall
reimburse Atmos Energy for its cost of repairing the damage.
B. In determining the location of the facilities of the City and other users of Public Right -of -Way
within City, City shall minimize interference with then existing System facilities and shall instruct
other users of Public Rights -of -Way to minimize interference with existing System facilities. The
placement of all System facilities shall be subject to the City's approval. In the event of a conflict
between the location of the Company's proposed facilities and the location of the existing City
facilities or other users of Public Rights -of -Way within Public Rights -of -Way that cannot otherwise
be resolved, the City or an authorized agent of the City shall resolve the conflict and determine the
location of the respective facilities within the Public Rights -of -Way.
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C. Atmos Energy or contractors working on behalf of Atmos Energy shall not be required to pay for
street cutting, street excavation or other special permits related to excavations in Public Rights -of -
Way in connection with Atmos Energy's operations in Public Rights -of -Way. A copy of the City's
annual capital improvement plan ("CIP") will be made available on the City's website or upon
request. City shall notify Atmos Energy as soon as reasonably possible of any projects that will
affect Atmos Energy's facilities located in the Public Rights -of -Way. When required by City to
remove or relocate its mains, laterals, and/or other facilities lying within Public Rights -of -Way,
Atmos Energy shall do so as soon as practicably possible with respect to the scope of the project.
In no event shall Atmos Energy be required to remove or relocate its facilities in less than thirty
(30) days from the time notice is given to Atmos Energy by the City.
D. The City reserves the right for any reason whatsoever to change the grade of, alignment of,
construct, install, repair, alter, maintain, relocate, modify, close, reduce, or widen (together,
"change") any Public -Right -of -Way within the present or future limits of the City. If City, in
constructing its sewers, drainage, water lines, electric lines, streets, traffic signals, sidewalks, or
any other types or categories of utilities or facilities, should request that Atmos Energy remove or
relocate its mains, laterals, and other facilities lying within Public Rights -of -Way, Atmos Energy
shall do so at its own expense for facilities that are in conflict, unless such work is for the primary
purpose of beautification. However, if such work is being performed because of or to accommodate
a private development project, the private developer shall be required to reimburse Atmos Energy
for the cost of removal or relocation of its System facilities. System facilities are deemed to be in
conflict to the extent that the proposed City facilities are determined by Atmos Energy to be
inconsistent with gas distribution industry standard safe operating practices for existing facilities.
Atmos Energy shall not be required to relocate facilities to a depth of greater than four (4) feet
unless prior agreement is obtained from Atmos Energy.
E. When Atmos Energy is required by the City to remove or relocate its mains, laterals, and other
facilities lying within Public Rights -of -Way to accommodate a request by City, and costs of utility
removals or relocations are eligible under federal, state, county, local or other programs for
reimbursement of costs and expenses incurred by Atmos Energy as a result of such removal or
relocation, and such reimbursement is required to be handled through City, Atmos Energy costs
and expenses shall be included in any application by City for reimbursement if Atmos Energy
submits its cost and expense documentation to City prior to the filing of the application. City shall
provide reasonable written notice to Atmos Energy of the deadline for Atmos Energy to submit
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ORDINANCE NO: 2025-4576 Page 6 of 17
documentation of the costs and expenses of such relocation to City. Upon receipt of an amount of
reimbursement intended for utility relocations including gas utilities, City shall remit to Atmos
Energy, within thirty (30) days of receipt, any portion of such reimbursement specifically
designated as a reimbursement of Atmos Energy's costs incurred in the relocation or removal of
Atmos Energy's facilities but only after City has been fully reimbursed for its own costs of
relocation or removal of utilities and related facilities.
F. If Atmos Energy is required by City to remove or relocate its mains, laterals, or other facilities lying
within Public Rights -of -Way for any reason other than: (a) the changing of the grade, alignment
of, construction, installation, repair, alteration, maintenance, relocation, modification, closing,
reducing, or widening (together, "change" or "changing") of any Public -Right -of -Way within the
present or future limits of the City; or (b) the construction or reconstruction of sewers, drainage,
water lines, electric lines, streets, traffic signals, sidewalks, or any other types or categories of
utilities or facilities by City, Atmos Energy shall be entitled to reimbursement from City or others
of the reasonable cost and expense of such removal or relocation.
G. When Atmos Energy is required to remove or relocate its mains, laterals or other facilities to
accommodate construction by City without reimbursement from City, Atmos Energy shall have the
right to seek recovery of relocation costs as provided for in applicable state and/or federal law.
Nothing herein shall be construed to prohibit, alter, or modify in any way the right of Atmos Energy
to seek or recover a surcharge from customers for the cost of relocation pursuant to applicable state
and/or federal law. City shall not oppose recovery of relocation costs when Company is required
by City to perform relocation. City shall not require that Company document request for
reimbursement as a pre -condition to recovery of such relocation costs. Notwithstanding any
provision of this Ordinance and Franchise, the City shall have the right to participate and challenge
any other capital costs or expenses of Atmos Energy and request full documentation to the full
extent provided by state law.
H. If City abandons any Public Rights -of -Way in which Atmos Energy has facilities, such
abandonment shall be conditioned on Atmos Energy's right to maintain its use of the former Public
Right -of -Way and on the obligation of the party to whom the Public Right -of -Way is abandoned to
reimburse Atmos Energy for all removal or relocation expenses if Atmos Energy agrees to the
removal or relocation of its facilities following abandonment of the Public Right -of -Way. If the
party to whom the Public Right -of -Way is abandoned requests Atmos Energy to remove or relocate
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its facilities and Atmos Energy agrees to such removal or relocation, such removal or relocation
shall be done within a reasonable time at the expense of the party requesting the removal or
relocation. If relocation cannot practically be made to another Public Right -of -Way, the expense
of any right-of-way acquisition shall be considered a relocation expense to be reimbursed by the
party requesting the relocation.
I. Atmos Energy hereby agrees that it will not arbitrarily refuse to provide service to any customer
that it is economically feasible for Atmos Energy to serve if the customer to be benefitted will pay
a reasonable portion of the cost thereof or if it can be shown that the revenue resulting from such
extension will, within a reasonable time after same is made, pay a reasonable return on Atmos
Energy's investment.
J. Atmos Energy shall furnish reasonably adequate service to customers using reasonable rates and
charges therefor, and Atmos Energy shall maintain its System in good order and condition.
SECTION 5. INDEMNITY & INSURANCE:
A. IN CONSIDERATION OF THE GRANTING OF THIS FRANCHISE, ATMOS ENERGY
AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS THE CITY, ITS
OFFICERS, AGENTS, EMPLOYEES, BOARDS AND COMMISSIONS (THE
"INDEMNITEES") FROM AND AGAINST ALL SUITS, ACTIONS OR CLAIMS OF
INJURY TO ANY PERSON OR PERSONS, OR DAMAGES TO ANY PROPERTY
BROUGHT OR MADE FOR OR ON ACCOUNT OF ANY DEATH, INJURIES TO, OR
DAMAGES RECEIVED OR SUSTAINED BY ANY PERSON OR PERSONS OR FOR
DAMAGE TO OR LOSS OF PROPERTY ARISING OUT OF, OR OCCASIONED BY
ATMOS ENERGY'S INTENTIONAL AND/OR NEGLIGENT ACTS OR OMISSIONS IN
CONNECTION WITH ATMOS ENERGY'S OPERATIONS, EXCEPT THAT THE
INDEMNITY PROVIDED FOR IN THIS PARAGRAPH SHALL NOT APPLY TO ANY
LIABILITY DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM THE SOLE NEGLIGENCE OR INTENTIONAL ACTS OR
OMISSIONS OF THE CITY, ITS OFFICERS, AGENTS OR EMPLOYEES. IN THE
EVENT OF JOINT AND CONCURRENT NEGLIGENCE OR FAULT OF BOTH THE
CITY AND ATMOS ENERGY, RESPONSIBILITY AND INDEMNITY, IF ANY, SHALL
BE APPORTIONED COMPARATIVELY IN ACCORDANCE WITH THE LAWS OF THE
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ORDINANCE NO: 2025-4576 Pagc 8 of 17
STATE OF TEXAS WITHOUT, HOWEVER, WAIVING ANY NECESSARY CONSENT
TO SUIT OR GOVERNMENTAL IMMUNITY AVAILABLE TO THE CITY UNDER
TEXAS LAW AND WITHOUT WAIVING ANY OF THE DEFENSES OF THE PARTIES
UNDER TEXAS LAW. FURTHER, IN THE EVENT OF JOINT AND CONCURRENT
NEGLIGENCE OR FAULT OF BOTH THE CITY AND ATMOS ENERGY,
RESPONSIBILITY FOR ALL COSTS OF DEFENSE SHALL BE APPORTIONED
BETWEEN THE CITY AND ATMOS ENERGY BASED UPON THE COMPARATIVE
FAULT OF BOTH.
B. Atmos Energy shall, at its sole cost and expense, obtain, maintain, or cause to be maintained, and
provide, throughout the term of this Franchise, insurance in the amounts, types and coverages in
accordance with the following requirements. Such insurance may be in the form of self-insurance
to the extent permitted by applicable law or by obtaining insurance, as follows:
(1) Commercial general or excess liability on an occurrence or claims made form with
minimum limits of five million dollars ($5,000,000) per occurrence and ten million dollars
($10,000,000) aggregate.
This coverage shall include the following:
(a) Premises / Operations,
(b) Independent contracts/contractors,
(c) Products/completed operations (to be maintained for a warranty period of at least
three years),
(d) Personal and advertising injury,
(e) Contractual liability (insuring the indemnity provided herein), and
(f) Explosion, collapse, or underground (XCU) hazards.
(2) Business automobile liability coverage with a minimum policy limit of two million dollars
($2,000,000) combined single limit each accident. This coverage shall include all owned
autos, leased or rented autos, hired autos, any autos, and non -owned automobiles.
(3)
Workers' compensation and employer's liability coverage. Statutory workers'
compensation benefits in accordance with the statutes and regulations of the State of Texas.
Atmos must provide the City with a waiver of subrogation for workers' compensation
claims.
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ORDINANCE NO: 2025-4576 Page 9 of 17
(4) Additional Insured and Waiver of Subrogation in Favor of City. Those policies set forth
in Section 5(A) and Section 5(B) shall contain an endorsement listing the City as
Additional Insured and further providing that Atmos Energy's policies are primary to any
self-insurance or insurance policies procured by the City. The additional insured
endorsement shall be in a form acceptable to the City. Waiver of subrogation in a form
acceptable to the City shall be provided in favor of the City on all policies obtained by
Atmos Energy in compliance with the terms of this Agreement. Atmos Energy shall be
responsible for all deductibles which may exist on any policies obtained in compliance
with the terms of this Agreement. All Certificates of Insurance and endorsements shall be
furnished to the City at the time of execution of this Agreement and approved by the City
before this Franchise becomes effective.
(5)
Annually, Atmos Energy, or its insurance carrier/broker, will provide proof of insurance in
accordance with this Franchise within thirty (30) days after each certificate of insurance
renews and in the event of any material reduction in coverage.
SECTION 6. NON-EXCLUSIVE FRANCHISE: The rights, privileges, and franchises granted
by this ordinance are not to be considered exclusive, and City hereby expressly reserves the right to grant,
at any time, like privileges, rights, and franchises as it may see fit to any other person or corporation for the
purpose of transporting, delivering, distributing, or selling gas to and for City and the inhabitants thereof.
SECTION 7. RIGHT OF CONDEMNATION RESERVED: Nothing in this Franchise shall
limit any right the City may have to acquire by eminent domain any property of Atmos Energy.
SECTION 8. TERM OF FRANCHISE: If Atmos Energy accepts this Franchise ordinance
pursuant to Section 20, and sixty (60) days pass following its second and final passage by the City Council
pursuant to Section 105 of the College Station City Charter, and no proper petition is filed challenging the
granting of this Franchise, the parties agree that the retroactive effective date for Atmos Energy to pay
franchise fees to the City shall be January 1, 2025. Franchise payments remitted to City prior to the final
passage date of this ordinance shall be calculated pursuant to the previous franchise agreement. This
Franchise shall terminate on December 31, 2034, unless terminated earlier by either party in accordance
with the provisions herein.
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SECTION 9. PAYMENTS TO CITY:
A. Atmos Energy, its successors and assigns, agrees to pay and City agrees to accept, on or
before the 15th of May, August, and November, 2025, and February 2026, and on or before
the same days of each succeeding year during the term of this franchise, the last payment
of the initial term being made on the 15th day of February, 2035, a sum of money which
shall be equivalent to five percent (5%) of the Gross Revenues, as defined in Section 2
above, received by Atmos Energy during the preceding calendar quarter.
B. The initial payment for the rights and privileges herein provided shall be for the privilege
period January 1 through March 31, 2025, and each succeeding payment shall be for the
privilege period of the calendar quarter preceding the quarter in which the payment is made.
C. It is also expressly agreed that the aforesaid payments shall be in lieu of any and all other
and additional occupation taxes, easement, franchise taxes or charges (whether levied as
an ad valorem, special, or other character of tax or charge), municipal license, permit, and
inspection fees, bonds, street taxes, and street or alley rentals or charges, and all other and
additional municipal taxes, charges, levies, fees, and rentals of whatsoever kind and
character that City may now impose or hereafter levy and collect from Atmos Energy or
Atmos Energy's agents, excepting only the usual general or special ad valorem taxes that
City is authorized to levy and impose upon real and personal property. If the City does not
have the legal power to agree that the payment of the foregoing sums of money shall be in
lieu of taxes, licenses, fees, street or alley rentals or charges, easement or franchise taxes
or charges aforesaid, then City agrees that it will apply so much of said sums of money
paid as may be necessary to satisfy Atmos Energy's obligations, if any, to pay any such
taxes, licenses, charges, fees, rentals, easement or franchise taxes or charges aforesaid.
D. The franchise fee amounts that are due based on CIAC shall be paid at least once annually on or
before April 30 each year based on the total CIAC recorded during the preceding calendar year.
The initial CIAC franchise fee amount will be paid on or before April 30, 2026, and will be
based on the calendar year January 1 through December 31, 2025. The fmal CIAC franchise
fee amount under the initial term will be paid on or before April 30, 2035, and will be based on
the calendar year January 1 through December 31, 2034.
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E. Atmos Energy agrees that at the time of each payment, Atmos Energy shall also submit to the
City a statement showing its Gross Revenues for the preceding calendar quarter.
F. Payments received after the due date shall be subject to interest charged at the greater of the rate
of the prime rate for the due date or the rate for customer deposits under Texas Utilities Code
Section 183.003 in effect for the time period involved, from such due date until payment is
received by the City.
G. Atmos Energy may file with the City a tariff or tariff amendment(s) to provide for the
recovery of the franchise fees under this agreement. City agrees that (i) as regulatory
authority, it will adopt and approve the ordinance, rates or tariff which provide for 100%
recovery of such franchise fees as part of Atmos Energy's rates; (ii) if the City intervenes
in any regulatory proceeding before a federal or state agency in which the recovery of
Atmos Energy's franchise fees is an issue, the City will take an affirmative position
supporting 100% recovery of such franchise fees by Atmos Energy and; (iii) in the event
of an appeal of any such regulatory proceeding in which the City has intervened, the City
will take an affirmative position in any such appeals in support of the 100% recovery of
such franchise fees by Atmos Energy. City agrees that it will take no action, nor cause any
other person or entity to take any action, to prohibit the recovery of such franchise fees by
Atmos Energy.
SECTION 10. ACCOUNTING MATTERS:
A. Maintenance of Records. Atmos Energy shall keep and maintain complete and accurate
books, records, accounts, documents and papers (regardless as to whether in paper or electronic
format) pertaining to Atmos Energy's System, its business operations under and in connection with
this Franchise, and all underlying books, records, and working documents on which the Gross
Revenue calculations were based and the determination of any other amounts due to the City under
this Franchise, in accordance with Atmos Energy's record retention policy or for a period of four
(4) years, whichever is greater. Said records shall be available or accessible to the City at Atmos
Energy's principal office in Dallas, Texas.
B. The City may conduct an audit or other inquiry in relation to a payment made by Atmos
Energy. As a part of the audit process, the City or City's designee may inspect Atmos Energy's
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books of accounts, records, and documents relative to the City at any time during regular business
hours and on ten (10) business days' prior notice. The City or City's designee may also request (1)
the amount of the sale of gas service provided to each class of customer in the city and (2) the type
of service delivered for any additional service distributed directly to customers through Atmos
Energy's System within the City's Public Rights -of -Way for which Atmos Energy receives
compensation.
C. Access to Records. All records deemed by City or City's designee to be reasonably
necessary for such audit shall be made available by Atmos Energy at Atmos Energy's corporate
office in the Dallas, Texas. Atmos Energy agrees to give its full cooperation in any audit and shall
provide complete responses to inquiries within twenty (20) calendar days of a written request,
unless a different schedule is agreed to by the City and Atmos Energy.
D. In the event that a dispute arises regarding an audit performed on Atmos Energy's books
and records, Atmos Energy agrees to participate in mediation in an attempt to resolve the dispute.
Atmos Energy agrees that it will consult with the City and the parties will mutually agree on a
mediator to preside over the mediation.
D. The omission by the City to exercise its rights to an audit shall not constitute waiver of
such right.
SECTION 11. EFFECT OF OTHER MUNICIPAL FRANCHISE ORDINANCE FEES: If Atmos
Energy should at any time after the effective date of this Ordinance agree to a new municipal franchise
ordinance, or renew an existing municipal franchise ordinance, with another municipality in Atmos
Energy's Mid -Tex Division, which municipal franchise ordinance determines the franchise fee owed to that
municipality for the use of its public rights -of -way in a manner that, if applied to the City, would result in
a franchise fee greater than the amount otherwise due City under this Ordinance, then the franchise fee to
be paid by Atmos Energy to City pursuant to this Ordinance may, at the election of the City, be increased
so that the amount due and to be paid is equal to the amount that would be due and payable to City were
the franchise fee provisions of that other franchise ordinance applied to City. The City acknowledges that
the exercise of this right is conditioned upon the City's acceptance of all terms and conditions of the other
municipal franchise in toto. The City may request waiver of certain terms and Company may grant, in its
sole reasonable discretion, such waiver.
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SECTION 12. LEASE OF FACILITIES WITHIN THE CITY'S RIGHTS -OF -WAY: Intentionally
omitted.
SECTION 13. CITY TERRITORY AND ANNEXATION: This Franchise shall extend to and
include any and all territory that is within the corporate limits of the City. Additionally, this Franchise shall
extend to any and all territory that is annexed by the City during the time of this Franchise. In the event of
disannexation, this Franchise shall be reduced to the territory that continues to be in the City. City shall
within thirty (30) days of final approval, give Company notice of annexations and disannexations of
territory by the City, which notice may include a map and addresses, if known. Upon receipt of said notice,
Company shall promptly initiate a process to reclassify affected customers into the city limits no later than
sixty (60) days after receipt of notice from the City. The annexed areas added to the city limits will be
included in future franchise fee payments in accordance with the sales tax effective date of the annexation
if notice was timely received from City. Upon request from City, Company will provide documentation to
verify that affected customers were appropriately reclassified and included for purposes of calculating
franchise fee payments. In no event shall the Company be required to add premises for the purposes of
calculating franchise payment prior to the earliest date that the same premises are added for purposes of
collecting sales tax.
SECTION 14. DEFAULTS:
Events of Default.
The occurrence, at any time during the term of this Franchise, of any one or more of the following events,
shall constitute an Event of Default by Atmos Energy under this Franchise:
A. The failure of Atmos Energy to pay the Franchise Fee on or before the due dates specified
herein;
B. Atmos Energy's substantial breach or violation of any of the material terms contained
herein.
C. The foregoing shall not constitute a breach if the violation occurs without fault of Atmos
Energy or occurs as a result of circumstances beyond its control which could not have been avoided as a
result of the exercise of reasonable care. The Company shall not be excused by mere economic hardship
or by misfeasance or malfeasance of its directors, officers or employees.
Uncured Events of Default.
A. Upon the occurrence of an Event of Default which can be cured by the immediate payment
of money to the City, Atmos Energy shall have thirty (30) calendar days after written notice from City of
College Station — Atmos Energy Mid -Tex Division Gas Franchise
ORDINANCE NO: 2025-4576 Page 14 of 17
an occurrence of such Event of Default to cure the same before City may exercise any of its rights or
remedies provided under this Franchise.
B. Upon the occurrence of an Event of Default by Atmos Energy which cannot be cured by
the immediate payment of money to the City, Atmos Energy shall have ninety (90) calendar days after
written notice from City of an occurrence of such Event of Default to cure the same before City may exercise
any of its rights or remedies under this Franchise.
C. If any Event of Default is not cured within the time period provided herein, such an Event
of Default shall, without additional notice, become an Uncured Event of Default, which shall entitle City
to exercise the remedies provided in the section below.
SECTION 15. REMEDIES:
Upon the occurrence of any Uncured Event of Default as described above, City shall be entitled to exercise
any and all of the following cumulative remedies: (1) The commencement of an action against Atmos
Energy for monetary damages; (2) the commencement of an action in equity seeking injunctive relief or the
specific performance of any of the provisions that, as a matter of equity, are specifically enforceable; (3)
the termination of this Franchise in accordance with the provisions of Section 16.
The rights and remedies of City and Atmos Energy set forth in this Franchise shall be in addition to, and
not in limitation of, any other rights and remedies provided by law or in equity. City and Atmos Energy
understand and intend that such remedies shall be cumulative to the maximum extent permitted by law and
the exercise by City of any one or more of such remedies shall not preclude the exercise by City, at the
same or different times, of any other such remedies for the same Uncured Event of Default.
SECTION 16. TERMINATION: Should City intend to exercise the remedy of termination in
accordance with Section 15, City shall notify Atmos Energy in writing of its right to have a hearing before
the City Council to present any objections or defenses the Company may have that are relevant to the
proposed termination. The notice shall specify a hearing date which shall be at least thirty (30) days from
the date of the notice. After such hearing, the City may determine whether to continue or to terminate the
Franchise. The final decision of the City Council may be appealed to any court or regulatory authority
having jurisdiction. Upon timely appeal by Atmos Energy of the City Council's decision terminating the
Franchise, the effective date of such termination shall be either when such appeal is withdrawn or a court
order upholding the termination becomes final and unappealable, and until the termination becomes
effective, the provisions of this Franchise shall remain in effect for all purposes.
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ORDINANCE NO: 2025-4576 Page 15 of 17
SECTION 17. NO THIRD -PARTY BENEFICIARIES: This Franchise is made for the exclusive
benefit of the City and Atmos Energy, and nothing herein is intended to or shall confer any right, claim or
benefit in favor of any third party.
SECTION 18. SUCCESSORS AND ASSIGNS: No assignment or transfer shall be made in whole
or in part except in the case of assignment or transfer to an affiliate, parent, or subsidiary of the Company
without approval of the City Council. Notice of said transfer or assignment shall be provided to the City.
City shall grant approval unless the assignee is materially weaker than Company. For purposes of this
Section, "materially weaker" means that the long-term unsecured debt rating of the assignee is less than
investment grade as rated by both S&P and Moody's (or their successor entities). If the assignee is
materially weaker, the City may request additional documents and information reasonably related to the
transaction and the legal, financial, and technical qualifications of the assignee. City agrees that said
approval shall not be unreasonably withheld or delayed. Upon approval, the rights, privileges and franchise
herein granted to the Company shall extend to and include all successors and assigns. The terms, conditions,
provisions, requirements and agreements contained in this Franchise shall be binding upon the successors
and assigns of the Company.
SECTION 19. SEVERABILITY: This Ordinance and every provision hereof shall be considered
severable, and the invalidity and unconstitutionality of any other portion of this Ordinance shall not affect
the validity or constitutionality of any other portion of this Ordinance. If any term or provision of this
ordinance is held to be illegal, invalid or unenforceable, the legality, validity or enforceability of the
remaining terms or provisions of this Ordinance shall not be affected thereby.
SECTION 20. ACCEPTANCE OF FRANCHISE: In order to accept this Franchise, Atmos Energy
must file with the City Secretary its written acceptance of this Franchise ordinance within sixty (60) days
after its final passage and approval by City. If such written acceptance of this Franchise ordinance is not
filed by Atmos Energy, the Franchise ordinance shall be rendered null and void.
SECTION 21. REPEAL: When this Franchise ordinance becomes effective, all previous
ordinances of City granting franchises for gas delivery purposes that were held by Atmos Energy shall be
automatically canceled and annulled, and shall be of no further force and effect, with the exception of
Atmos Energy's obligations to continue paying Franchise Fees under the previous franchise ordinance until
this Franchise Ordinance becomes effective.
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ORDINANCE NO: 2025-4576 Page 16 of 17
SECTION 22. PARAGRAPH HEADINGS, CONSTRUCTION: The paragraph headings
contained in this Ordinance are for convenience only and shall in no way enlarge or limit the scope or
meaning of the various and several paragraphs hereof. Both parties have participated in the preparation of
this ordinance and this ordinance shall not be construed either more or less strongly against or for either
party.
SECTION 23. NOTICES: Any notices required to be sent to the parties under this Franchise shall
be sent to the following:
CITY: ATMOS ENERGY:
City of College Sation
Attn: City Manager
P.O. Box 9960
College Station, Texas 77842
Atmos Energy
Attn: Public Affairs Manager
297 N. Earl Rudder Freeway
Bryan, Texas 77802
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ORDINANCE NO: 2025-4576
Page 17 of 17
SECTION 24. EFFECTIVE DATE: If Atmos Energy accepts this Franchise ordinance pursuant
to Section 20, it becomes effective after sixty (60) days following its second and final passage by the City
Council pursuant to Section 105 of the College Station City Charter.
FIRST READING: PASSED AND APPROVED on this the 13th day of February , 2025.
SECOND READING: PASSED AND APPROVED on this the 27th day of February , 2025.
ATTEST:
Tanya Smith;'City Secretary
APPROVED AS TO FORM:
City Attorney
Joh 'P. Nichols, Mayor
City of College Station, Texas
College Station — Atmos Energy Mid -Tex Division Gas Franchise