Description
The Franchise Agreement will result in the regulation of Southwest Gas' usage of City owned rights-of-way to transport gas to Goodyear citizens. The Agreement details each party's rights and regulations for the use of the public right-of-way and provides that the utility will pay a "franchise fee" for the use of that right-of-way.
Key Terms:
Southwest Gas will pay a franchise fee of 2% of all revenues.
Southwest Gas will pay all other applicable municipal taxes, including transactional privilege taxes, which Southwest Gas has not paid under the previous agreement.
The franchise would be non-exclusive. Should Grantee agree to pay a higher franchise fee to another Arizona municipality during the 25-year term, the City would be entitled to collect that higher rate.
Southwest Gas will be required to obtain and pay for appropriate permits before beginning construction projects.
Southwest Gas will be required to comply with City practices and ordinances regarding construction projects and street cuts.
The Agreement details cost allocation for relocation projects of Southwest Gas facilities in the rights-of-way.
Grantee would defend and indemnify the City against any liability arising out of its operations under the franchise.
Southwest Gas will be entitled to reimbursement for reasonable costs and expenditures incurred pursuant to the Franchise. In return, the Franchise will not add facilities affected by reimbursement to its rate base or seek a return on investment of such facilities during the term of the Franchise.