The City of Allen's current Franchise Agreement with Oncor Electric Distribution expired in 2019 and while we are in a grace period for re-negotiation, there are no further extensions remaining in the current agreement. During the past several months, the City has negotiated through Counsel a new, long term electric Franchise Ordinance with Oncor. The new agreement is of mutual advantage to both parties by establishing conditions under which Oncor will operate its electric delivery system, equipment and facilities in the City.

The purpose of this action is to grant Oncor Electric Delivery Company LLC., its successors and assigns, an electric power franchise and use of present and future streets, avenues, alleys, roads, highways, sidewalks, easements, and public ways and other property of the City of Allen in order to construct and operate an electricity distribution system and for delivering electricity to residents and businesses in Allen, Texas.

In addition to standard franchise language, the new ordinance provides clarity around management of abandoned Public Rights-of-Way and delineation of responsibilities of all involved parties, as well as relocation costs. Additional updates to the agreement include:

• Language updates to comply with statutory and regulatory changes
• Indemnification language updated
• Language incorporated to protect the City's ability to regulate ancillary uses on Oncor's system

The terms of this franchise agreement will extend through August, 2040. 

There is no change in franchise fees received or costs to operations related to the Oncor Franchise Agreement compared to our current agreement.

The terms of this new Franchise Agreement will produce an indeterminable amount of revenue in the General Fund, attributable to a quarterly franchise fee based on each kilowatt hour of electricity delivered by Oncor to each retail customer whose consuming facility's point of delivery is located within the City's municipal boundaries, as well as, the annual franchise fee based on 4% of the gross revenues received by Oncor identified as "Discretionary Service Charges", as defined in the agreement.

For reference, Oncor Electric Franchise Fee Revenue received in FY 2019-20 was $2,560,720.

Staff recommends that the City Council adopt an Ordinance granting to Oncor Electric Delivery Company, its successors and assigns, a non-exclusive franchise to use public rights-of-way of the City of Allen for the purposes of constructing and operating an electric distribution and transmission system for a period of twenty (20) years.

I make a motion to adopt Ordinance No. ________________ granting to Oncor Electric Delivery Company, its successors and assigns, a non-exclusive franchise to use public rights-of-way of the City of Allen for the purposes of constructing and operating an electric distribution and transmission system for a period of twenty (20) years.