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Council approves first reading of Centerpoint franchise and fee for ethanol plant
Summary
Council approved the first reading of two ordinances establishing a natural-gas franchise for Centerpoint at the city’s ethanol plant and a fee equal to 5% of revenue with quarterly payments and a 20-year term.
City staff presented two related ordinances to grant a natural-gas franchise to Centerpoint for service to the ethanol plant located inside the city limits. The first ordinance establishes the franchise; the second sets the franchise fee at 5% of revenue, with payments changed from monthly to quarterly and with a proposed 20-year term.
Staff said the agreement language was prepared by a specialized attorney and reflected standard national practice for such franchises. The staff representative told the council that 5% is the national standard for franchise fees in comparable agreements and that a 20-year term is common; council members agreed the proposed term and rate were within typical parameters.
Council moved, seconded and approved the first reading of both the franchise ordinance itself and the ordinance establishing the fee. Additional reviews and the second reading will follow the city’s normal ordinance process.
