1962-11ORDINANCE NO« 4.05
Village of Richfield
UNIFORM SUBURBAN FRANCHISE POR MINNEAPOLIS GAS' COMPANY
GRANTING TO THE MINNEAPOLIS GAS COMPANY, A CORPORATION ORGAN IZED UNDER THE LAW5
OF THE STATE OF DELAWARE, ITS SLGCESSORS AND ASSIGNS, PERMISSION TO USE THE
STREETS AAA PUBLIC PIACES IN THE VILLAGE OF RICHFIELD POR THE CONSTRLCTION,
MAINTENANCE Ah~ OPERATION OF A SYSTEM OF MAYNS , PIPE LINES AND OTHER FACILITIES
FOR THE MANUFACTLRE, DISTRIBUTION AND SALE OF GAS, SUBJECT TO CERTAIN TERMS AIv"D
CONDITION , AAU PRESCRIBING THE RATES TO BE CHARGED THEREFOR, AND REPEALING ALL
ORDINANCES, OR PARTS' OF ORDINANCES, INCONSISTENT HEREih~ITH.
Whereas, the Minneapolis Gas Company,. a corporation organized under the laws of the State of
Delaware, owns property used and useful in the manuf acture, distribution and sale of gas in said
Village; and
j>>hereas,, the Villa ge Council of the Village of Richfield on the 9tli day of September, 1946,
adopted"an ordinance granting a franchise to the Minneapolis Gas Company, its successors and
assigns, for the manufacture, distribution and sale of'gas in said Village for a period of twenty
(20) years, which said franchise was amended August 14,. 1950; and
t~Ihereas, meetings have been held between representatives of the Minneapolis Gas Company and
the Village Council of the Village of Richfield relative to a revision of the franchise previous-
ly granted; and
Whereas, the Minneapolis Gas Company, as and for consideration and compensation for the
rights and privileges herein granted, has agreed to surrender its present franchise ordinance
d has agreed, during the term hereof, to continuously supply gas service to the inhabitants of
e Village, as provided in this franchise ordinance,. and has agreed to perforr.~ contractual ob-
gations set forth in said franchise ordinance, and has agreed to pay to the Suburban Rate
thority for the use and benefit of the Village for amount provided in Section 18; and
Vdhereas, the Village Council of the Village of Richf field in cooperation with other munici-
palities of the suburban area, has determined that it is desirable and to the advantage of the
consumers of gas in the Village of Richfield that a new franchise should be granted by said VillagE
to said Company upon the terms and conditions expressed herein and that the previous franchise
hereinabove referred to should be repealed and all rights and privileges of the Company thereunder
surrendered and cancelled except as hereinafter provided.
NOi~~, THEREFORE, THE VILLAGE COUNCIL OF THE VILLAGE OF RICHFIELD DO ORDAIN AS FOLLOt9~:
Section 1. In this ordinance the terms '"Municipality"", "Municipal Council" and "D~unicipal
Clerk" shall mean respectively the Village of Richfield,. the Council of the Village of Richfield
and the Clerk of the Village of Richfield. If at any time the powers of the N,unicip~.lity,. the
Municipal Council or the Municipal Clerk shall be transfefred to"any other authority,. board,
officer or'officers, then and in such case such authority,. board, officer or officers shall have
the rights, powers and duties herein referred to or prescribed for the Municipality, the Munici-
pal Council and the Municipal Clerk respectively.
The term "Company" shall mean the Minneapolis Gas Company, its successors and assigns, and
the words "streets and public places" shall mean the streets, avenues, alleys, parkways, roads,
squares, parks, bridges, viaducts and public places in the Municipality.
-2- Uniform Suburban Franchise
The term "' g~t.s'~' as used herein sYza1.1 be held to include manuf actured gas , natural gas, re-
formed natural ~;au, a mixture of natural gas and manufactured ~;as, or other form of gaseous ener-
7'he term "one thousand cubic feet" of gas where used in this ordinance is 1;000 cubic feet
of gas Treasured at temperature and pressureexisting at the point of metering, or, when corrected,
at 60° F and 14.5 pounds per square inch, absolute.
The term "'suburban area"'shall include the cities of Bloomington, Columbia Heights, Crystal,
Fridley,. Hopkins, Robbingdale, St.• Y.ouis Park~and l~Vayzata; the villages of Brooklyn Center,'
Brooklyn Par2c, Deephj~.verz, Eden Prairie, Edina, Excelsior, Golden Valley, Greenwood, Hilltop,
Maple Grove, Minnetonka, Morningside, New Hope, Osseo, Plymouth,. Richfield,, St. Anthony, Shore-
wood and t~'oodland; and the area of Fort Snelling. Other municipalities or area adjacent to or
near the City of hiinrzeapolis or the "suburban area"' may be included in the "suburban area" for
rate-making purposes, subject to the provisions of Section 12.
The term "Suburban Rate Authority" shall mean an organization consisting of one member ap-
pointed by the Municipal. Council of each Municipality in the suburban area adopting this ordi-
nance and existing for the purpose of administering the rate provisions bf this ordinance. It
is empowered to employ consultants and others and shall adopt such rules, regulations and bylaws
as will enable it properly to perform the functions herein provided for.
Section 2. There is hereby granted to Minneapolis Gas Company, its successors and assigns,
for a period extending to January 1,. 1983, from and after the acceptance of this ordinance by
the Company„ and waiver of rights by said Company required by Section 27 hereof, and subject to "
the terms, conditions and limitations herein stated, the right to manufacture, import, transport,
ell and distribute gas for heating, illuminating and other purposes within the limits of"the
unicipality as the boundaries thereof now exist or as they may be extended in the future, and
or that purpose to establish the necessary facilities and equipment and to maintain a manufactur-
ng plant, gas mains, service pipes and any other appurtenances necessary to the manuf acture, sale
and distribution of gas in and along the streets and public places of said Municipality, and to'do
all things which are reasonable, necessary or customary in the accomplishment of this objective,
subject,. however, to the further provisions of this franchise. Provided, however, that before
said Company shall establish any plant in said Municipality for the manufacture of gas, the ap-
proval of the Municipal Council of the location thereof, in the exercise of a reasonable discre-
tion by said Council,. shall be first obtained by said Company.
If the right or privilege to manufacture, purchase, transport, mix, distribute or sell gas
in annexed territory, shall be owned or controlled by the Company at the date of annexation,
said right or privilege shall,. from and after the date of annexation and during the balance of
the term hereof, be exercised and controlled by the provisions of this ordinance. The Company
agrees to manage its plant and operations in a reasonably efficient and economical manner. The
Company also agrees to use due diligence in the matter of the issuance of long-term debt to as-
sure reasonable cost of such debt, provided, however, that this should not be construed as re-
quiring competitive bids on new debt issues..
Section 3. The Company shall charge, demand, collect and receive just and reasonable rates,
charges and compensation as hereinafter provided. The altering, amending or revising of any
rates made by the Company to obtain compliance with this ordinance shall be by the Suburban Rate
Authority. The said Suburban Rate Authority exists for the purpose of reviewing gas rates made
by the Company and undertaking appropriate action thereon as in this ordinance authorized.
-3- Uniform Suburban Franchise
Nothing in this'ordinanee shall prevent
Authority to alter, amend or revise Company
to some other governmental authority.
the potaper herein given to the Suburban Rate '
rates from being hereafter delegated, by law,
From and after the effective date of this ordinance, the Company shall charge, demand,
collect and receive not to exceed the following rates for gas supplied to each customer at one
location in the entire suburban area, including the Municipality, for each month, except as
said rates shall be changed or modified as hereinafter provided, viz::
First '300 cu ft or less $2.00
Next 3;700 cu ft 1.43 per M
Next 26;000 cu ft 1.10 per M
Next '130;000 cu ft 1.C0 per M
Next 140;000 cu ft 1.00 per M
All over 300,000 cu ft .90 per M
The rates above specified are called "Block Rates".
The rates permitted by this ordinance, except as to natural gas furnished industrial cus-
tomers, are for natural gas having a monthly average total gross heating value of not less
than 950 British Termal Units per cubic foot, and shall continue, subject to adjustment as
herein provided..
Bills shall be rendered at rates permitted by this ordinance; provided, however, that when
a bill is not paid within ten (10) days after a bill is delivered or mailed to a customer,
the Company may charge, demand, collect and receive the amount thereof plus ten per cent (10%),
The Company may require any consumer of gas to deposit with it a reasonable amount as security
for payment of gas used or to be used by said consumer. The Company shall pay interest on the
deposit at the rate of six per cent (6%) per annum.
(u)~ The said rates shall remain in force and effect and be adjusted from time to time,
as hereinafter provided. In order to avoid undue discrimination between customers the Company
may,. at the time specified in this section and subject to review in the same manner as is pro-
vided in said ordinance, adjust the Block Rates either by changing the number and size of the
blocks or by changing the price variation between the blocks, or both, or by changing the rate
form, by submitting at the time of filing the adjusted Block Rates material and data support-
ing the desirability for such change or changes and the reasonableness thereof. Provides, the
Company'shall make a rate structure study at least once in each five years hereafter. Provided,
further, that the Block Rates for any other type of gas furnished in place of natural gas may
be revis ed by agreement between the Suburban Rate Authority and the Company.
Nothing herein shall prevent the Company from establishing from time to time during the
term hereof lower rates than the rates hereby permitted, and, in addition to the rate'schedules
contained in this section; from establishing, changing or discontinuing load building, induce-
ment or competitive rates, provided that such rates shall be reasonable for consumers within
different classes of service and that a lesser rate to one class of consumers shall not impose
an undue burden of cost upon consumers in other classes.
The Company shall have the right to contract for the sale of gas for industrial use on an
interruptible basis, requiring the customer to'have standby equipment for use upon notice by
the Company. The Company's rules, regulations, schedules or contracts for curtailing interrupts
ble gas service shall be uniform as applied to each class of interruptible customers..
-4- Uniform Suburban Franchise
(b). The Block Rates specified in this'section shall remain in force and effect until
January 31, 1963. In the month of Januar;>, 1963, and thereafter in the month of January of
each year during the remaining period coveted by this ordinance, the Company shall decrease
the Block Rates, and may increase the same, sufficient to permit and enable the Company to
realize Actual Net Earnings equal to the Allowable Annual Return, as provided for in Section
4, for each calendar year of said remaining period.
Increases or decreases in the Block Rates to be made at or about the end of each of the
above mentioned calendar years shall be based upon forecasts for the ensuing calendar year
of the rates required to permit and enable the Company to realize Actual Net Earnings during
said calendar year sufficient to produce the Allowable Annual Return plus past unabsorbed
deficiencies therein,'or less past unabsorbed overages therein, as the case may be, which may
occur after January 1,. 1963, under the terms of this ordinance..
The Company shall file with the Suburban Rate Authority, on or before January 10 of each
year, the aforesaid forecasts, together with the Block Rates which are proposed to b e effective
on bills rendered after January 31 of that year.
Provided, however, in order to minimize or prevent excessive fluctuations in the Block Rates,
the Company may additionally once during a calendar year, but not prior to July 1S thereof,
adjust the Block Rates in the same manner as provided above for the adjustment of said Block
rates at or about the end of each calendar year.
In making increases or decreases- in the Block Rates hereunder, fractions of one-half (1/2)
cent or more shall be counted as one cent and fractions of less than one-half (1/2) cent shall
be disregarded so far as the current period is concerned.
(c). The Company agrees not to make any change"in rates permitted or required by
this ordinance either by altering the classification thereof, or otherwise, until after twenty
(20) days' notice of any such change has been given to the Suburban Rate Authority. Such
notice shall be deemed to have been given when a written statement of any change, or changes,
in such rates, signed by the Company, shall be filed with the Suburban Rate Authority. The
Company shall furnish such information, reports and statement relating to any such changes
which may be required by the Suburban Rate Authority. Any change in rates made pursuant to
the terms of this ordinance shall be made effective as soon as practicable after the expiration
of each calendar ye ar, subject to the proviso in Subsection 3 (b). Provided, that before any
rate established by the Company for any new class of consumers shall become effective, the
Company shall give ten (10) days' similar notice to the Suburban Rate Authority of the es-
tablishment of said rate, which may be altered, amended or revised within ten (10) days
thereafter as in this section pro vided. The filing of any notice with the Suburban Rate Author-
ity, as required by this ordinance, shall be deemed notice to this municipality.
(d). The Company agrees that any change in rates made by the Company, not in accordance
with this ordinance, may be altered, amended or re wised, so as to conform to the provisions
of this ordinance and according to the terms thereof, by an engineer, auditor'or accountant
of the Suburban Rate Authority duly appointed for such purpose. The engineer, auditor or
accountant so appointed shall be qualified and experienced in public utility regulatory matters
and an employee of the said Suburban Rate Authority. Any such alteration, amendment or re-
vision shall be made by order, stating the reasons therefor, duly served on the Company caithin
twenty (20) days after notice of such proposed rates shall be given by the Company, as in this
ordinance provided. The Company shall have the right to a prompt hearing and review of such
alteration, amendme nt or revision in the courts of the State of D4innesotq, if"proper applica-
tion is made therefor within thirty (30) days of ter notice of such alteration, amendment or
revision, and if such hearing and review is applied for, then until such alteration, amendment
or revision shall be finally sustained or altered by such courts, the rate made by the Company
-5- ~7niform Suburban Franchise
shall remain in effect for the period as provided in this ordinance. At the time of malting
the application for review the Company shall file with the Clerk of Court a corporate under-
aking requiring it to refund, rebate or comply with. such other relief as said courts may
rder. At the hearing provided for herein on the issue or issues raised by the aforesaid order
he court shall consider all evidence which may be relevant and proper.
Ce). The Company agrees that when no change in an existing rate is proposed at the time
of a rate filing, the said Suburban Rate Authority shall have the power'to alter, amend or
revise the said existing rate in the manner provided in Subsection 3(d), if the said existing
rate is not in accordance with the provisions of this ordinance. The right of the Company for
court review in such instance shall also be the same as provided in Subsection 3(d).
(f) The Company shall not charge, demand, tolls ct or receive a greater or less or dif-
ferent compensation for any service or similar service rendered, or to be rendered, than the
rates"and charges applicable to such service in effect at the time for consumers in the same
class, nor shall the Company refund or remit in any manner br by any device any portion of the
rates or charges so specified. The Company shall not offer, extend to, or accept from any
person or corporation any form of contract or agreement for service that is not regularly and
uniformly applicable to all persons and corporations receiving the same or like service. The
Company shall not extend, afford or use any rule or regulation, or any privilege or facility
that is not regularly and uniformly applicable to all peersons and corporations receiving service
under the same or like conditions, except as provided in Subsection 3(a) hereof.
Section 4.. It is the purpose of this ordinance to insure that the consumer shall pay only
a fair, just and reasonable rate and that such rate will permit the Company to make a reasonable
return on the capital investment in the business, as hereinafter defined in this jection, under
an economical and efficient management of the same.
(a). As used in this ordinance, "allowable annual return" shall mean the amount computed
y application of the "allowable rate of return" to the "allowable rate base" as defined in ac-
cordance with the provisions of Subsections (b), (c), (d), (e), (f) and (g).
(b ). The "allowable rate of return" shall be 6-1/2% during calendar years where
the Company's average cost of long-term debt capital at the beginning of the current year is not
less than 3 -1/2% nor greater than 4-1/2%. Long-term debt shall consist of all debt due over one
year after date of issue. The average cost of long-term debt shall be the weighted average ef-
fective cost of the outstanding long-term debt at the beginning of the current year. The ef-
fective cost of each debt issue shall be computed by dividing the product of the interest rate
and principal amount issued by the net proceeds of the issue. The net proceeds of an issue
shall consist of the principal amount plus any premiums received, less any discounts and issu-
ance expense, and less call premiums when any refunding of an issue results in a lower effect-
ive cost of debt. Whenever there is a decrease in the Company's average cost of long-term debt
capital below 3-1/2% or an increase above 4-1/2%, the "allowable rate of return" of 6-1/2% shall
be decreased or increased by 50% of such decrease or increase. Thereafter, any contra move in
the average cost of long-term debt capital will required the reverse adjustment in the `'allow-
able rate of return". No change in the "allowable rate of return" shall be made unless the de-
crease or increase in the average cost of long-term debt capital shall equal at least 1/10 of
one percentage point, and in no event shall the decrease or increase in the °'allowable rate of
return" be other than in multiples of 1/20 of one percentage point.
(c). The "allowable rate base" shall be the sum of the "fair value of the suburban area
utility plant" used and usefu]i_in the public service as provided in Subsect2~ons (d), (e) and
f) and working capital as provided in Section 5,. less average contributions in aid of con-
.,gw Uniform Suburban Franchise
strraction and average cash advances f'or constx,«ction, as reflected on the Company's boolcs.
(d) The "fa.ir value of the suburban area utility plant" shall be'the sum of 50% of the
r.vera~e original! plant cost including the current year net additions, less depreciation per
gooks, computed on a monthly basis, and 50% of the "reproducti.on cost new°' plant as defined
"n Subsections (e) and (f ), less depreciation. Depreciation of the "reproduction cost new"
plant shall be computed by the use of the ratio of the book depreciation reserve to the origi-
nal plant gross cost, plus three (3) percentage points.
The 50% weighting of the "reproduction cost new" plant shall be used as long as the Company's
ratio of debt capital does not exceed GO% at the beginning of the current year.. If it exceeds
60% the SO°I° weighting of the "reproduction cost new" plant will be decreased by one percentage
point for every one percentage point increase in the debt capital ratio above 60%. In such
event the 50% weighting of the original plant cost will be increased by each percentage point
that the weighting of "reproduction cost new°' plant is decreased.
(e) "Reproduction cost new" shall consist of the sum of the following amounts:
(1) The original cost at the beginning of the preceding calendar year of
all plant classified as Intangible Plant, Land and Land Rights, and
General Plant, excluding Structures and Improvements.
(2) The original cost at the beginning of the preceding calendar year
of all other plant trended to reflect the Handy-19hitman Index of Public
Utility Construction Costs (North Central Division) as of July 1 prior
to the current calendar year. Each plant account shall be trended by
use of the following indexes::
Plant Account Index
All Manufactured Gas Production Total Construction and Equipment
Plant excluding Land and Land (Manufactured Gas)
Rights
Distribution Plant
Structures and Improvements Structures and Improvements
Mains -Steel Mains - Steel
Mains - Cast Iron Mains - Cast Iron
Pumping and Regulating Mechanical Equipment exclusive of
Equipment Gas Holders
Services Services
Meters Meters
Meter Installations Meter Installations.
House Regulators House Regulators
House Regulator Installations House Regulator Installations
Other Property on Customers' Structures and Improvement
Premises
General Plant
Structures and Improvements Structures and Improvements
Any new Plant Account which may hereafter be established shall be trended
in accordance with the appropriate Handy-Whitman Index.
(3) The original cost of the gross plant additions, less retirements, in-
stalled in the preceding calendar year.
(4) The original cost of the gross plant additions, less retirements, in-
stalled during the current calendar year averaged on a monthly basis.
-7- Uniform Suburban Franchise
(f). At the tnd of each five=-year. .interval the construction cast trends experienced by
the Compa~;y since the adoption of this ordinance shall be compared with the appropriate
randy-t~'hitman Index. If, after such comparison,, the difference between the Handy-~~'hitman costs
and the Company's experience is 15%, or less, of the total "reproduction cost new" plant, the
Handy-t~~'hitman Index costs will be used for the succeeding five years. If the difference ex-
ceeds 15%, the parties agree to adjust the Handy-ti'+hitman costs to reflect Company experience.
In the event the Bandy=L~'hitman Index of Public Utility Construction Costs (North Central
Division), or its successor, is no langer available, another similar Index mutually agreeable
to the Company and the Suburban Rate Authority will be used.
(g). As used in this ordinance, "Actual Net Earnings" of the Company shall consist of the
balance remaining after deducting from the gross revenues of the Company from the manufacture,
purchase, mixture, transportation,, distribution and sale of gas sold in the said suburban area
during the calendar year of 1963, and each calendar year thereafter, the following operating
and maintenance costs and expenses connected with the manufacture, purchase, mixture, transpor-
tation, distribution and sale of gas sold in the said suburban area during such calendar periods;
(1) Production Expenses, including cost of purchased gas;
(2) Distribution and Utilization Expensesa
(3) Customers' Accounting and Collecting Expenses;
(4) Sales Promotion Expenses
(S) An item'to cover "Administrative and General Expenses'° which shalt
be the just, fair and reasonable cost to the Company of all of the sub-
accounts that are included in such Administrative and General Expenses,
but the aggregate of "Administrative Salaries" and "General Incidental
Expens es" classified as in the present practice of the Company in these
accounts shall not exceed in any calendar year three per cent (3%) of the
annual gross: revenue, including contributions, gratuities and donations
not to exceed three-tenths of one per cent (3/10 of 1%) of the annual
gross revenue.
(6) All taxes and governmental impositions of every nature actually
paid by the Company directly to governmental tax collecting agencies or
accrued in accordance with gene rat acceptable accounting prineiples,
Any tax other than an ad valorem tax which may hereafter be lawfully
authorized and thereafter separately imposed by any municipality shall
be added only to the bills of the customers within such municipality.
(7) An annual allowance, beginning January 1, 19b3, for depreciation of
depreciable property owned by the Company and used and useful in render-
ing gas service in the suburban area for each calendar yeas during the
term of this ordinance of an amount designed to recover the original
cost of such depreciable property over the estimated average service-life
of each group of property on a straight-line basis, computed by applica-
tion of the annual depreciation rates, now used by the Company in record-
ing depreciation on the books of the Company to the original cost of de-
preciable property included in each of the major property classifications
and properly chargeable to depreciation expenses. Provided, however, such
annual depreciation rates may be revised periodically so as to ref lect all
factors bearing on the amount designed to recover the original cost of such
-8~- Uniform Suburban Franchise
depreciable property aver its est~.mated average service-life;
(8) A1:~ other acttaal and proper c~.asses of maintenance and operating
expenses of the Company;
(9) An item to cover takes, depreciation and return on any plant not in-
cluded in the suburban area Allowable Rate Base, but which is used and
useful in rendering public service therein.. A credit item (deduction
from expenses) to cover taxes, depreciation and return on any plant in-
cluded in the suburban area allowable rate base, but which is properly
allocable to rendering service outside the suburban area, subject, however,
to the provisions of Section 1.
(10) Annual allowance for amortization of extra-ordinary property losses
resulting from change in type of gas, unusual rbsolescence or unforeseen
property damage. '
Appropriate items may be amortized or accrued according to accepted accounting practice and,
except as otherwise provided in this ordinance for specific items, the actual experience of the
Company shall be the determining factor in support of the amounts and rates of amortization or
accrual for such items, as such experience gives a definite guide.
All expense items, whether charged directly and entirely in a calendar year or amortized
or accrued over a longer period, all revenue items and all balance sheet items shall be, at all
times, recorded by the Company in substantial accordance with the Uniform System of Accounts
for Gas Utilities of the National Association of Railroad and Utility Commissioners,. except as
otherwise provided in this ordinance and except that installment and carrying charges will be
credited to gross merchandise sales.
The allocation of the Company's operating expens es and Plant within and without the subur-
ban area shall be made by the Company in accordance with a formula that reasonably reflects
the costs as they occur for rendering service within and without the said area. Any change in
such formula made in any rate filing will be specifically referred to in a separate communica-
tion filed with the Suburban Rate Authority at the time of the rate filing.
When there is a balance in the account for cumulative overage in excess of the allowable
return., such balance shall be credited with interest computed at the current prime interest
rate. Net refunds (af ter taxes )'from any supplier shfi.11 be credited to such account. Over-
ages in such account may be used, by mutual agreement, in such manner as will minimize or
prevent violent fluctuations in rates, notwithstanding the provisions of Subsection 3(b),
Section 5. The Company shall be entitled to fair and adequate working capital in an amount
determined as follows:
As used in this ordinance,. "working capital" shall mean an amount applicable to the sub-
urban area for the calendar year of 1963, and for each calendar year thereafter, equal. to the
annual average funds invested by the Company during such calendar years in materials and
supplies on hand, merchandise accounts receivable, prepayments and deferred charges properly
chargeable to operations, plus a cash fund equal to ten (10) days' average daily operating ex-
penses and taxes, plus one-eighth <1/8) of the annual operating expenses and taxes, less credits
for the annual average of accrued taxes and purchased gas accounts payable.
The working capital computed in accordance with the foregoing formula shall be included in
the allowable rate base as provided in Subsection 4(c).
-9- Uniform Suburban Franchise
Section 6, The Company sha1.1 file with the Suburban Rate Authority printed schedules
which shall be kept open for public n~pection, showing all rates, charges, compensation,
forms of contracts or agreements made, established or enforced or to be enforced with custo-
mers in the suburban area, together with all rules and regulations relating to rates, charges
or services rendered or to be rendered and all privileges allowed and facilities afforded by
the Company to its customers in the suburban area, The Suburban Rate Authority shall have the
right'at any reasonable time to inspect,, examine and audit the accounts, books, records, re-
ports,. contracts, documents and papers of the Company« The said Suburban Rate Authority may
appoint or designate the person or persons to make such inspection, examination or audit«
Section 7. The Company shall at all times keep, maintain and preserve for the suburban
area proper and accurate engineering, accounting, financial and statistical records, relating
to the construction, cost, maintenance and operation of its property which at all times shall
show correctly and in detail all its financial transactions, including all of its receipts
and disbursements and the particulars thereof, and all data needful for the preparation of
the statements and reports hereinafter provided for.
The Company shall, each month„ prepare and file with the Suburban Rate Authority the
following
(a) A detailed statement of all assets and liabilities of the Company as of the close of
the preceding month;
(b) A detailed statement showing source and application of revenues of the Company from .the
sale of gas and of by-products and from all other sources for the preceding month and year, up
to and including the preceding month; also all expenditures of the Company during said year;
all dividends and interest paid; the cost of all materials used in the manufacture 6f gas, all
operating expenses, taxes and salaries; the cost of all repairs and of all property, real or
personal,, by it purchased, acquired, constructed or installed; said statements shall be so
prepared as to show the net income of the Company frog. its regular business and from all
other sources and the use or disposition of said income.
The Company shall also; from time to time, furnish monthly operating and financial reports
and such other information, reports and statements regarding its property and business, and
the conduct thereof, as the Suburban Rate Authority may require. All information, reports and
statements furnished to the Suburban Rate Authority by the Company shall be certified by the
President, Secretary or other proper officer of the Company.
Section 8.' The provisions of this ordinance relative to allowable annual return, allowable
rate of return,. allowable rate base and accruing annual d epreciation rates fixed under the
provisions hereof and othei requirements shall be considered as conditions hereof, but no such
provisions, nor any matter, fact or thing herein contained shall be construed as an admission
either by the Municipality or the Company in connection with any proceeding for the acquisition
of the Company's property, or any part thereof, under eminent domain or condemnation proceedings,
or in connection with any proceeding for the valuation of the Company's property, or any part
thereof., during or after the termination hereof, or in connection with any proceeding for the
fixing of rates after the termination hereof, to any of which proceedings the Municipality
shall be a party.
Section 9. In determining "allowable annual return", "allowable rate of return" qnd
"allowable rate base" under Section 4 hereof, the books and records of the Company, and its
predecessors, made and kept prior to the passage of this ordinance, shall be used insofar as
necessary in applying said Section 4.
-1t7-~ t7niform suburban pr2rx ctxise
w-action lU. The books of account shall contain an account that may be designated as
"reserve for Depreciation of Utility Plant°°, or similar term, which shall show at all times
s nearly as may be the unexpended or unused balance of accumulated charges to operating
xpenses on account of depreciation, replacements, renewals or retirements. ~'~hen any proper-
ty is abandoned or removed, withdrawn, retired From, or is not used and useful in the public
service for any cause, the actual original cost shall be credited to the appropriate capital
account, and such amount plus the cost incidental to said abandonment, removal, withdrawal
or retirement shall be charged to said reserve,. subject, however, to the provisions of the
following paragraph. The salvage value received and any other amounts recovered from said
property shall be credited to said reserve.
!When a substantial segment of the Company's utility property is required to be abandoned
and retired from service because of change of type of gas, or unusual obsolescence, or un-
foreseen property damage and such proper ty is not fully covered by the depreciation reserve
or other reserves or by insurance,-then the unrecovered balance of such property shall be
credited to the depreciation reserve or other appropriate reserve and be charged to a deferred
charge account designated as "Extraordinary Property Losses'°. Charges to said deferred charge
account shall be amortized by charges to operating expenses as provided for in Section 4.
If the original cost is not shown by the books and records of the Company or its predeces-
sors, such amount shall be estimated and a record shall be made by the Company showing the facts
upon which said estimate was based, the manner in which it was determined and the person by
whom it was made, and said estimated amount, together with removal costs and salvage value,
or other amounts received or recovered from said property, sh all be accounted for in the
manner as hereinabove provided.
Section 11. The Company shall at all times keep,. maintain and preserve all the books,
records and accounts of the Minneapolis Gas Light Company, a corporation organized under the
laws of the State of Minnesota, and the~Minneapolis Gas Light Company, a'corporation organized
under the laws of the State of Delaware, the predecessors of the Company, and such books, re-
cords and accounts shall a t all reasonable times tie open to inspection and examination by the
Suburban Rate Authority, as provided in Section 6, in respect to the books, records and ac-
counts of the Company.
The Company Shall set up„ keep and maintain at all times at its general offices, accurate
books of account,, showing among other things as nearly as may be the actual original cost of
the property owned by the Company within the suburban area. For this purpose, the books and
records of the predecessor companies (Minneapolis Gas Light Company of Minnesota and Minnea-
polis Gas Light Company of Delaware) may be used without prejudice to the Suburban Rate Author-
ity in any proceeding where the actual original cost may be an issue. All property added shall
be entered on the books at its actual original cost.
Section 12. The Company agrees to lay such of its mains and pipes as come within its
requirements for service as soon as reasonably possible to do so.. The Company shall give
reasonable notice to the municipal engineer of plans to lay mains in any part of the Munici-
pality. The laying of such mains shall not unduly interfere with established municipal plan-
ning. Extensions of service beyond the borders of the suburban area as herein defined shall
not colle ctively cast any undue burden on the customers in said suburban area.
Section 13. The council of the Municipality shall have the right to make such reasonable
rules and regulations as may be necessary to provide adequ ate and proper service.. The Munici-
pality shall have the power to pro vide for the inspection, e~:amination and ascertainment of the
-11- Uniform Suburban Franchise
accuracy of any and all gas meters used or intended to be used for measuring and ascertaining
the quantity of gas supplied by the Company and to inspect, examine and ascertain the accuracy
of recording pressure gauges and of all apparatus for testing and proving the accuracy of gas
meters..
Section .14. The Company shall not open or disturb the surface of any street or public
place for any purpose without first having obtained a permit so to do from .the proper D4unici-
pal officials, for which permit the Municipality may impose a reasonable fee to be paid by
the Company. The mains, services and other property placed in the streets and public places
pursuant to such permit shall be located in the streets or portion of the streets and public
places as shall be designated by the Municipality.. The'Company shall, upon completion of any
work requiring the opening'of any street or public place, restore the same., including the
paving and its foundations, to as good condition as formerly,. and shall exercise reasonable
care to maintain the same for two (2) years thereafter in good condition. Said work shall be
performed with due diligence and if the Company shall fail promptly to perform and complete the
work,. to remove all dirt and rubbish and to put the street or public place in good condition,.
the N,unicipality shall have the right to put the street or public place in good condition at
the expense of the Company; and the Company shall, upon demand„ pay to the Municipality the
cost of such work done for or performed by the Municipality,, together with ten per cent (100)
additional as liquidated damages. Notwithstanding the foregoing provisions of this section,.
the Company may open and disturb the surface of any street without a permit where an emergen-
cy exists requiring the immediate repair of a gas main or gas service. The Company in such
event will request a permit not later than the second working day thereafter.
Section 15. whenever the Municipality shall grade, regrade or change the line of any street
or public place or construct or reconstruct any sewer or water system therein and shall, in the
proper exercise of its police power, and with due regard to seasonable working conditions,
order the Company to relocate permanently its mains, services and other property located in
said street or public pla.ce,.'the Company shall relocate its facilities at its own expense.
In construing this paragraph, the obligation of the Company to relocate its facilities shall
be as applicable to water systems as it is to sewer systems. The Municipality shall give the
Company reasonable notice of plans to grade,. regrade or change the line of any street or
public place or to construct or reconstruct any sewer or water system therein..
The Company may be required to relocate its facilities at its own expense where grade'
changes are made by the Municipality for improved drainage or improved traffic conditions,
provided, however, if a subsequent relocation or relocations shall be ordered within ten years
from and after the first relocation the Municipality shall reimburse the Company for such
non-betterment relocation expense which the Company may incur on a time and material basis.
Provided, however, nothing in this ordinance contained shall deprive the Company of its
rights under Section 161.46, Minnesota Statutes..
Nothing contained in this section shall require the Company to remove and replace its maips
or to cut and reconnect its service pipe running from the main to the customer's premises
at its own expense where the removal and replacement or cutting and reconnecting is made for
the purpose of amore expeditious operation for the construction or reconstruction of said
sewer or water system; nor shall anything contained herein relieve any person, persons or
corporations from liability arising out of the failure to exercise reasonable care'to avoid
injuring the Company's facilities while performing any work connected with grading, regrading
or changing the line of any street or public place or with the construction or reconstruction
of any sewer or water system.
1Jhere the Municipality orders the Company to relocate any of its facilities, the Company
shall proceed with such relocation. If such relocation is done without an agreement first
_lz_ Uniform Suburban Franchise
being made as to who shall pay for the relocation cost, such relocation of the facilities by
the Company shall not be construed as a waiver of its right to be reimbursed for the reloca-
tion cost` Tf the Company claims that it should be reimbursed for such relocation costs, it
hall notify the Municipality within ten (10) days after receipt of such order.
Section 16. The Municipality shall give the Company reasonable written notice of"plans
for street improvements where paving or resurfacing of a permanent nature is involved, which
notice shall contain the nature and character of the improvements, the streets upon which the
improvements are to be made, the extent of the improvements and the time when the Municipality
is going to start the work, and, if more than one street is involved, the order in which this
work is to proceed. Paving or resurfacing of a permanent nature refers only to Portland cement
concrete or high type bituminous concrete.
The notice shall be"given to the Company a sufficient length of time, considering season-
able working conditions,, in advance of the actual commencement of the work to permit the Com-
pany to make any additions, alterations or repairs to its facilities deemed necessary by it.
In cases where streets are at final width and grade,. and the Muhicipality has installed
underground sewer or water mains and service connections to the property line abutting the
streets prior to a per manent'paving or resurfacing of such streets,. and the Company's main
is Located under such street, the Company may be required to install gas service connections
prior to such paving or resurfacing, whenever it is apparent that gas service will be required
during the five years following the paving or resurfacing.
Section 17. All mains, services, governors and other property and facilities shall be so
located, constructed, installed and maintained as not to endanger or unnecessarily interfere
with the usual and customary trade, traffic and travel upon the streets and public places of
the Municipality; The Company shall keep and maintain all of its property in good condition,
order and repair, so that the same shall not menace or endanger the life or property of any
person. The Municipality Sha11 have the right to inspect and examine at any reasonable time
the property owned or used, in part or in whole, by the Company for the purpose of manufactur-
ing, distributing, furnishing or selling gas in the suburban area.
' Section 18. The Company agrees to pay to the Suburban Rate Authority, effective January
1, 1963, not less than $30,000.00 per year to be allowed as an operating expense to the Com-
pany and which shall be used to secure compliance with this ordinance, and for such other
purposes relating to the Company's purchased gas costs and gas supply as the Suburban Rate
authority shall deem necessary. The amount of such annual payment shall be subject to pos-
sible re vision by the Suburban Rate Authority and the Company, not oftener than once in five
(5) years, if mutually agreed to.
Section 19. The Company shall at all times provide and furnish an adequate, safe and
co ntinuous supply of gas to the Municipality and its inhabitants, subject, however, to the
further provisions of this section. The Company sells and distributes gas throughout its en-
tire distribution system.. The natur al gas distributed by the Company is furnished by the
pipeline system, owned and oper ated by Northern Natural Gas Company,. a "natural gas company"
under the Federal Natural Gas Act, which subjects said Northern Natural Gas Company to the
jurisdiction of the Federal Power Commission.
The Company shall not be liable to the Municipality or its inhabitants, nor shall the
Municipality, or any inhabitant who is a customer of the Company, be liable to the Company
hereunder by reason"of the failure of the Company to deliver, air of the Municipality or a
customer to receive, natural gas as a result of acts of God, or the public enemy, inability
-14- Uniform Suburban Pranchise
review by a court of competent jurisdiction.
Section 24. Any change of the form of government of the Municipality as authorized by
he State of Minnesota shall not affect the validity of this franchise. Any municipal cor-
onation succeeding the Municipality shall, without the consent of the Company, succeed to all
the rights and obligations of the Municipality provided in this franchise.
Section 25. Except as herein otherwise specifically provided, whenever notice is to be
given to the Company, such notice in writing, addressed to the President, Vice President,
Secretary or Treasurer of the Company and delivered at the Minneapolis office of the Company
shall be service of such notice; and whenever notice is to be given to the Municipality, such
notice, in writing, addressed to the Municipal Clerk and delivered at his office, shall be
service of such notice; and whenever notice is to be given to the Suburban Rate Authority, such
notice in writing, addressed to such Suburban Rate Authority and delivered to its office or to
one of the members cf its governing body, shall be service of such notice.
Section 26. 'An ordinance entitled "Granting to Minneapolis Gas Light Company, its succes-
sors and assigns, the right to manuf acture, import, transport, sell and distribute gas for
heating, illuminating and other purposes in the Village of Richfield and to use the streets,
avenues and alleys thereof for that purpose", passed on the 9th day of September, 1946, and
the amendments thereto passed on the 14th day of August, 1950, are hereby repealed.
Section 27. This ordinance shall'be null and void unless the Company shall, after the pub-
lication thereof and prior to April 1, 1963, file with the Municipal Clerk a written acceptance
of the same and an agreement on its part, signed and acknowledged in its behalf under its cor-
porate seal by its duly authorized officers, to surrender all rights and privileges under the
ordinance described in Section 26, and to comply with, abide by, keep and perform all of the
erms,'conditions and requirements herein contained upon its part to be complied with or per-
ormed, and that the Company will not contest the validity of.this ordinance or of any rate or
ates which are in accordance with the terms hereof, except as herein expressly provided.
Uection 28. The expense of the publication of this ordinance shall b e paid by the Company.
Section 29. If this ordinance is not adopted by March 1, 1963, by municipalities in which
66-2/3% of the customers of the Company in the suburban area are located, the Municipal Council
may revoYce the same. The Company agrees to file with the Municipal Clerk on or before March
15, 1963, a sworn statement showing the total number of customers in the suburban area and the
total number of customers in municipalities in which the ordinance has been adopted; If this
ordinance is revoked the provisions of this ordinance shall be without prejudice to either
party in any subsequent proceeding.
Section 30. Three years after January 1, 1963, either the Company or the Suburban Rate
1=authority may request a review of the question of whether the rate formula contained in
Sections 4 and 5 accomplishes- the purpose expressed in the first sentence of Section 4. Such
review may be initiated by making a written request therefor to the other party during the
month of January, 1966. Thereupon,. the Suburban Rate Authority and the 'Company shall review
and discuss such ques tion with each other, thoroughly and in good f ai th, for a period not to
exceed six months. Any change in said rate formula shall be prospective in operation only and
shall be made by arrenCment to Sections 4 or 5. Any such amendment to be effective must be
adopted before December 1, 1966, by municipalities in which 66-2/3% of the customers of the
Company in the suburban area are located and accepted in writing by the Company in the fora
rovided in section 27 prior to January 1, 1967. In the absence of any such amendment, so
dopted and accepted, the rate formula contained in Sections 4 and 5 shall be and remain in
=15- Unif orm Suburban Franchise
effect during the balance of the term of t his franchise.
Section 31.. If any section, paragraph, subdivision, clause or provision of this ordi-
ance shall be adjudged invalid or unconstitutional, the same shall not affect the validity
f this ordinance as a whole, or any part or provision, other than the part so decided to be
invalid or unconstitutional.
Section 32. This ordinance shall take effect and be in force from and after January 1,
19b3, and after its publication and its acceptance by the Company subject to the provisions
of Section 29.
Passed the 14th day of January, 1963.
Stanley W. Olson, Mayor
i
%v ~'' ~~' ~- ~
0. `R. ~an Kre elen, Manager
LI
,1TTEST:
Edward J. Moline, Clerk-Treas.
1
Hunts Tomato Sauce 6
3 1~TIGHTS .A WEEK CARTON OF 50
on Mondays, Qhl® B®®k Matches .. ,.
',rlday ~ davit of ublication
>:<~>:>r<<::><>::<::»::>:<:»:::r::<::;:~>:~>k::>:< Bang® P®c®rn 1 Lb• Ba
~ND~TIQN _~~' Fi~teSt Pork Qt Beans 16 ~HENNEP N, ss
1962
7J S ~ N0. 300 3road, L, R. Farrington, Guy T. Farrington, being duly
..:.$1,3~&6,9U3 5~5 ,th says; that he is, and during all the times hexein stated
xltles _ ...: 2,62'9,02T04 F19~eSt Kidney Beans . one of the publishers of the newspaper known as The
.:..: . ' 324,9,1140 'ews, and has full knowledge of the facts hereinafter
4,332,699 01 N0. 300 ~ for more than pane year prior to the pu(bhcation therein
-' ~• 32,81920 4' Finest Chile H®t Beans_ Suburban l,ranchise fcr ~linnea~olis Gas
nd Fixtures ° 182,14552 h illdge of ~~ichf°~.elc1
a
•--$$,898;422.68 ki hffy Pie Crust Mix ..
h
~~s
.: TEA BISCUITS Pkg 12 ~---....,.._.........._--- -p~.._...........p -... ....-----~---..._......._ _...
150 000 00 ~ hed said news er was ubhshed in the Vi a of Rich-
150;()00.00 County of Hennepin, State of Minnesota, on Thursday of
283,900.92 $ 583,900 92 ~„~ ,that during. all said time said newspaper Chas been printed
nd Taxes ..._ 72,209.66 <', SC®ttS - Hank'e Pack TES language from its office of publication within the Vil-
field, Hennepin County, Minnesota, from which it is issued
' .: 139,749 99 ~~~ ~:ted and in newspaper format and in column and sheet
Sit ~ -: 2;819 2A r, Cut Green Beans 16 OZ• lent in space to at least 450 running inches of single coi-
,65S,Q56!20 -aches wide; has been issued as aforesaid once each week
,443;6$6.71 8,09&,742 91 ~~ wn office established in said place of publication and em-
:..::.........:..:$8,808,422.68 s4 Cut fax Beans 16 OZ. Cled workmen -and the necessary material 'for preparing
the same; that the press work on that part of the news-
ons. acrd other secUrit~es ed to local news of interest to the community it purports
g statement 8;fe deposited 4~ FINEST SPAGHETI 15 ,been done in its known office of publication; that during
rtes Government deposits ~ in its makeup not less than twenty-five percent of its
~1$1,358.ll, and for .
ed by. law. ~ SERVE5 SIX is have been devoted to local news of interest to the com-
,~ )urports to serve; that durin all said time it has not
~~~` ~~~ ORE IDA Mashed Pota3.cated any oilier publication, and has not been entirely
patents, plate matter and advertisements; has !been cir-
R ~ BUTTER KERNEL :nd near its said plane of publication to the extent of at
mdred and forty (240) copies regularly delivered to pay-
'resident • Diced. Carr®tS NO. 303 ers and has entry as second class matter in its local post-
copy of each issue has been filed with the State Histor-
asnter HALLMARK 5t. Paul; and that there has been on file in the ~office~ of #ahe
.ssistant Cashier for of Hennepin t~ounty, Minnesota, the affidavit of a per-
ssistant cashier: S P I N A C H NO 3®3 C~nowled-ge of the facts, showing the name and location of
ssistant cashier - per and the existence of the conditions constituting its
s as a legal newspaper.
.I'll-Lo Cream Corn No. 31 Suburban Franchise x"or Minneapolis Gas
R S . Village of ~~.ichi field
.ndrews It}o., }teal ~eta~te -FROZEN FOOD:
er; .~achnlan's, Ir<c.
ice sPr~ Co, o • ----•-•--••---------------•------------•-•--...----.....------•----------•-°•--•••----...--------•---°-•-•--•-•
' ~esfiaettt "and Genecat TOm Thumb Teen PIZZA hed was cut from the columns of said newspaper, and was
blade er, John beers f ublished therein in the En lash lan ua a once each
blthdebpolis p g ~ g g
fxec~utdve v'i-ce Pree)d®dt, ~ ,IDA -TREAT OR KRINDLE
Southdaie Mehagernent Co. ~ Qi1~.-_-....- successive weeks; that it was first so published
"ice President 'and Cieperai ' FRENCH FRIES ~ OZ•
5uperihtendent, bayfon Co.
'resident Glacier Sand & the __,._- .~^--~ari.. -.---___- day of --.--- -----_.,TaCI ~. - ... 1963,
G'raNel Co.. < PENDLETON PEAS 10 Ozer on Thursday of each week to and including the
'ice Ycesident!: Russell-11tLiller -__.. 1963; and that
Mixing co. ~ APPLE -CHERRY -GRAPE --- ------.---_- day of ------- --------- - - ---------
'resiaOHt ~ ~ is a printed copy of the lower case alphabet from A to Z,
M~-,RCH DRINKS 6 OZ:e, and is hereby acknowledged as being the size and kind
restaeht, 73otttell's in the composition and publication of said notice, to-wit:
'attner--~Dorae~. Owgn, 5 OZ.
'Maxtitiart, 'Witidbbrst ~ • , abcdefg - -lmnopgrstuvwxyz
West. AttoPnaYS +at :7~aYv ~' ~Id Hill ®r Nifty affl abedefb~iij mnopgrstuvwxyz ^~
'~. :'" /
' P'R'ESH TEKAS __ /~ ~/ ~ ~ '
~'~ ~ ~~ CARR®TS 1 LB. BAG •id sworn to efore me the ~-~YL ... day of . iJt~y-. - . 19fi3.
'. a ~
MORSEL. BAKERY 98th LYNI ----------•
f Notary Pu~- , Hennepin County, Mann.
~ , Sour Crepm Mu fins
•. .. ` . ,ion expires ------ --------- 19----•--••-
3' ""'"'-"~. H'S BAKERY 78th & 1 AAAIrGX1tET--iVliktElt; -°------ .
CENTER - WALS
• • • Notary i'ubGc, Hennepin Cowaty, A11i+n.
.' .P~,. g2~ 46i;t , Fruat Filled C®ffee Cal
eAy Commission Ex-lns tan. S9, 197"0.
eposit" InsuPance boi`poration' -
.~.. -.
Uniform Suburban Franchise For
\ YN E
TN ORDI G
GRAYTtNG 1T0 THE IIINNFA$OhIS GAS
COItPANY; A CORPORATION ORGANI7,ED
i'NDER THE, hAYA'S OF THE STATE OF
I)~,FI.AWA.R:E, TTS SLC(-ESSORS AND AS-
97GNS, PERMISSION TO USE THE STREETS
ASD PUBL[C PLACE9 IN THE VILLAGE OE
RICHFIELD FOR q`RF. CONSTIIfiCTIOY,
~IAiN7`EN LNCI :\ND OPERATION OF A
SYSTE51 OF 31AISS, PIPELINES AND OTHF,R
F:1CHdTI1S FOR THE 1L4,\UFACTi;RE,
DiSTRIBUTIO\ A.ND SALE. OP GAS, SUR-
JCCT 'PO CFFRTAI\ TF.It'tiS AND CONDi-
TIONS, AND PRESCRIBING THE RATES
TO BE CH.ARG1!;ll THEREFOR, AND RE-
PF IhING Af 1 ORDI\ -NCI;S, OR P:1RT5 OF
ORDISANCI S, INC-0NSISTF.NT HEREWITH.
Whereas; the Minneapolis Gas Company, a enr-
poratlon' organized under the laws of the State of
Delaware, owns property used and useful in the
manufacture, distribution and sale of gas in the
Village oP Richfield and is operating said property
in said Village; and
Whereas, the Village Council of the Village of
Richfield on the 9•th day of September, 1946, adopted
an ordinance gran[ing~ afranchise to the Minneapolis
Gas Company, its succe.asors and assigns, for ,the
manufacture; distrBbtttion and sale of gas in as d
Village for a period of twenty (20) Years, which laid
franchise was amended August 14, 1950; and
Whereas, meetings have been held between rep-
resentatives of the Minneapolis Gas Company and
the Village Council of the. Village oP Richfield rela-
tive to a revision of the fra.nchiae previously granted;
and
W}lereas, the 3iinnea7tolis Gas Company, as and
for consideration and compensation for the rights
and privileges herein granted, has agreed to sur-
render its presenRfranchise ordinance and has agreed,
uiing the term hereof, to continuously supply gas
ervice to the inhabitants of the Village, as provided
this franchise ordinance, and has agreed to per-
rm contractual obligations set forth an said Eran-
hise ordinance, and. has 'agreed to pay to the Sub-
nban Rate Authority. for the use and benefit of the
illage the amount provided in Section 18; and
Whereas, the Village Council of theZ'illage of
Richfield in cooperation .with other municipalities
of the suburban area, has determined •that tt is de-
sirable and to .the advantage of the consumers of ;;as
ih the `Village of Richfield that a new franchise
should be'granted by said Village to said Company
upon the terms and conditions expressed herein aSd
the previous franchise hereina,bove referred to should
be reAealed and all rights and Privileges of the Qom-
pang theremuler surrendered and cancelled except
as hereinafter Provided.
NOW, THIIREFORE, TFLF. VILLAGE COUNCIh
OF THE VILLAGE OF RICHhIELD DO ORDAIN AS
FOIiLOWS:
Secfion 1, In this ordinance the terms "Municipal-
ity", "Municipal Council" and "~uniclpal Clerk" shall
mean respectively the Village of Richfield, the Coun-
cil of the Village of Richfield and the Clet9; of the
'Village of Richfield. If at any time the Powers of
the Municipality, the Municipal Council or the Muni-
cipal Clerk shall 'be transferred to any other auth-
ority, board, officer or' officers, then and in such
case such au4hority, board, officer or o~tficees shall
have the rights, Powers and duties oerein refs it al
to or prescribed fm• the Municipality, the Prlunie P .
Council and the Municipal Clerk respectively;
The term "Company"'shall mean 'the,~Iinneapolis
succeasocs ahd assigns, and the
Gas Company, its
words "streets and public Places" shall mean the
streets, avenues, alleys, parkways, roads, squad e
parks, bridges, viaducts .and. public places in
Municipality.
The term "gas" asused herein shall be held a~
include manufactured gas, natural '.gas, reform.
natural gas, a mixture of natural gas and manufac-
tured gas, or other form of gaseous energy.
The term "one thousand cubic Eger" uf~ gas where
used in this ordinance is 1,000 cubic feet of ghs
measured at temperature and Pressure -existing at
thepoint of metering, or, when corrected, at 60° F.
and 14.5 pounds-per square inch, absolute.
The term "suburban-area" shall include the cities
of Bloomington, Columbia Heights, Crystal Fridley,
Hopkins, Robbinsdale, St. Louis Park and ~Vaq~ata;
the villages of Brooklyn 'Center, Brooklyn Park, DeeP-
haven, hden Prairie, F.dina, Excelsior, Golden ti•alley,
Greenwood, Hilltop, bfaPle Grove, Minneton] a, }torn-
ingside, New Hope, Osseo, Plymouth, Richfield, St.
Anthony, Shorewood and Woodland; and the area of
Fort Snelling. Other municipalities ar area adjacent
to or near the City of Minneapolis or the "suburban
area" may be included in the "suburban area" for
rate-making purposes; oubject to the provisions o-f
Section 12.
The tertn "Suburban RateAU[horitY^ shall mean
an organization consisting of one member appointed
by the' Municipal Council of ea iviimicipality. in
the suburban area adopting t lence'-and. exist-
£ admi 1•ItSg} the. rtite Provis-
ing fpT the purpose p,..
ions of tfiis'ordinance:=lt•is; oiveTed to employ con-
sultants'and others: and Rota adopi;such~ul~p, t~~t~
between the Suburban Rate Authority and the Com-
pang.
Nothing herein shall prevent the Company frpm
establishing from time to time during the term
hereof lower rates than the rates hereby permitted,
and, in addition to the rate schedules contained lit
this section, from establishing, changing or discon-
tinuing load building, inducement or competitive
Cates, provided that such ratesshall be reasonable for
consumers within different classes of service and
that a lesser rate to one class of consumers shall
not impose an undue burden of cost upon consumers
in other classes.'
The Company shall have the right to contract
for the sale of gas for industrial use on an inter-
ruptible basis, requiring the customer to have stand-
by equipment for use upon .notice by the Company.
The Company's rules, regulations, schedules or con-
tracts for curtailing interruptible gas service shall
be uniform as applied to each class of interruptible
customers.
(b.) The Block Rates specified in this section
shall remain in force and effect until January 3f,
1963. In the month of January, 1963,-.and thereafter
in the month of January of each year during the
remaining period covered by this ordinance, the
Company shall decrease tine Block Rates, and may
increase the same, sufficient- to permit and enable
Che Company torealize Actual Net Eargings equal to
the- Allowable Annual Return, as provided for in
Section 4, for each calendar year of said remaining
period, •
Increases or decreases in the Block Rates to be
made at or about the end of each of the above men-
tioned.calendar years shall be based.upon forecasts
for the ensuing calendar year of the rates required
topermit and enable the Qompany to realize Actual
Net Earnings during said calendar year sufficient to
produce. the Allowable .Annual Return plus Past
unabsorbed deficiencies therein, or less past ttnan-
sorbed overages therein, as the case may he, which
may occur after January 1, 1963, uiider the terms
of this ordinance,
The CpmPany shall file with the Suburban Rate
Authority, on or before 7anuaf•y 10 of cacti year, the
aforesaid forecasts; together with the BlockRates
which are proposed to be effective on bills rendered
after January 31 of that Year.
Provided, however, in order tc minfmize or pre-
vent excessive fluctltations in the Block Rates, the
Company may aiiditionally •once during a .calendar
year,'but not prior to July 15 .thereof, adjust the
Block Rates in the same manner as provided shove
for the adjustment of said Block Rates at or about
the end of each calendar year. ~-
In making .increases or decreases in the. Block
Rates hereunder, fractions of one-half (~) cent :or
more shall be counted as one cent and fractions of
less than one-half (~1) cent shall be disregarded ao
far as the current,perfod is concerned.
(c). The Company agrees not to makeany change
in rates permitted or required. by this ordinance either
by altering the classification tJtereof, or 'otherwise,
until after .twenty (l0) days' notice of any such
change has bee~,n given to the Suburban Rate
Authority. Such notice shall Abe deemed to have been
given when a written. statement of any change, or
changes; in such rates, signed by the Company, shalt
be filed with' the Suburban Rate Authority. The- Com-
pany shall furnish such information, reports a:nd
'statements relating to say such changes which may
be .required by the Subw•ban Rate Authority, Any
cl.ange in~rates made pursuant to the terms of this
ordinance shall be made effective as soon as practr
cable after the espira{ion ofeach calendar Year, sub-
ject to_the~Proviao~ih Subsection 3(b).Provided, that
before anp rate established by the .Company for any
new class of consumers shttll become effective, the
Company shall give ten (10) days' similar notice to
the Suburban Rate Authority of the establishment,ot
said rate, which may be altered, amended or revised
within ten (10) days thereafter as in this section
provided. The filing of any notice with the Suburban
Rate Authority, as required by this ordinance, shall
be deemed notice .to this municipality.
(d). The Company agrees that any change in
rates made by the Company, not in accordance with
this ordinance, may be altered, amended or revised,
so as to conform to the provisions of this ordinance
and according to the terms thereof, by an engineer,
auditor or accountant of the Suburban Rate Authority
duly appointed. for such purpose, The engineer,
auditor or, accountant so appointed shstll be qualified
and experienced in Public utility regulatm•y matters
and an employee of the said Suburban Rate Auth-
ority. Any such alteration, amendment cr revision
• far
rder statin h reasons there
shall be made by o g t e
duly served on the Company within twenty 12P1 day's
after notice of such proposed rates shall be given by
the Company,. as in this ordinance provided. The
Company shall have the right to a prompt hearing
and review of such alteration,'amendmeu[ or revi-
sion in the courts of the State of 1ltinuesota, if proper - -
application is made therefore within thirty (30)
days after notice of such alteration, amendment nr
revision,. and if such hearing and review is applied
for, then until such alteration, amendment or re-
vision shall be finally sustained or altered by such
courts; .the. rate made by the Company shall remain
._.,, oPaM fur thn~ncrinrl as nrnvided in_this.ordinance.
that the weighting of "reproduetipn cost new" plant
is decreased.
(ej "Reproduction cost new" shall consist of the
sum of the following amounts:
(lj The original cost at the beginning of the
preceding' calendar year of all plant classified ae
Lttangible Plant, Land and Land Rights, and General
Plant, excluding Structures and Improvements.
(2) The original cost at the beginning of the
prceding calendar year of all other plant trended to
reflect the Handy-Whitman Index of Public Utility
Construction Coats (North Central Division) as of
July 1 prior to the current calendar year, Each plant
account shall be trended by use of the following in-
dexes:
Plant Accounf
All Manufactured Gas Production Plant excluding
Land and Land Rights
Distribution Flant
Structures and Improvements
mains -Steel
Mains -.Cast Iron
Pumping and Regulating Equipment -
Services
Meters
3leter Installations
House Regulators
House Regulator Installations
Other Property on Customers' Premises
General Plant
Structures and Improvements
Index
Total Construction and Equipment (Janufactured
.Gas)
Distribution Plant
Structures and Improvements
;ursine -Steel
Mains -Cast Iran
.Mechanical Equipment exclusive of Gas Holders
Services
Meters
ilIeter Installations
House Regulatm's
House Regulator Installations
Structures and Improvements
General Plant
Structures and Improvements
Any new Plant Account which may hereafter be
established shall be trended in accordance with the
appropriate handy-Whitman Index.
(3) The original cost of the gross plant additions,
less retirements, installed. in the preceding calendar
year. '
(4) The original cost of khe gross plant additions,
less retirements, installed during the current calendar
year ai`eraged on a monthly basis.
(f) At the end of each five-year interval the con-
struction cost trends experienced by the Company
since the adoption of this ordinance shall be com-
pared with the appropriate Handy-Whitman Index.
If, after such comparison; .the difference between
the Handy-Whitman costs and the Company's exper-
ience is 15%, or less, of the total "reproductio^ cost
new" plant, the Handy-Wkltman Index costs will be
used~for the succeeding five years, If the difference
exceeds 16%, the parties agree to adjust the Aandy-
Whitinan costs to reflect Company experience.
Iu the event the Handy-Whitman Index of Public
Utility construction Costs (North Ce~ntra] Division),
omits successor, is no longer available, another sim-
ilar Index mutually agreeable to the Company and
the Suburban Rate Authority will be used.
(g) As used in this ordinance, "Actual Net Earn-
ings" oP the Company shall consist of the balance
remaining after deducting from the gross revenues
of the Company from fhe manufacture, purchase, [nix-
htre, transportation, distribution and sale of gas sold
in the said suburban area during thecalendar year
of 1963, and ea~h calendar year thereafter, the follow-
(ng operating and maintenance costs and expenses
connected with the manufacture, purchase, mixture,
transportation, distribution •and sale of gas sold in
the said suburban area during such calendar Periods:
(1) Production Expenses, including cost of pur-
chased gas;
(2) Distribution and Utilization Expenses;
(3) Customers' Accounting and Collecting Ex-
penses;
(4) Sales Promotion Expenses;
(5) An item to~ cover "Administrative and Gen-
eral Expenses" which shall be the just, fair and rea-
sonable cost to the Company of all of the sub-accounts
n General
that are included in sash Administrative a d
Expenses, but the aggregate of Administrative Sal-
Arles" and "General Incidental Expenses" classified
as lit the present practice of the Company in these
accounts shall not exceed in any calendar Year three
,per cent (3r/)-of the annual gross revenu0, including
%eontrihutions, graritities and donationsnot to exceed
three-tenths of oneper cent (3/10 of 1%) of the an-
nual gross revenue.
(6) All taxes .and governmental impositions of
every nature actually paid by the. Company directly-
to governmental-tax collectiong agencies or aceru'ed
ih accordance with general acceptable accounting
principles. Any tax other than an ad valorem tax
®F RICHFIELD
January 14,1963
Minneapolis Gas Co.
its customers in the suburban area, The Suburban
Rate Authority shall have the right at any reasonable
time to inspect, examine -and- audit the accounts,
books,- records, reports, contracts, documents and
papers of the Company. The said. Suburban Rate
Authority may appoint or designate the person or
persons to make such inspection, examination or
audit,
Section 7. The Company shall at all times ]seep,
maintain and preserve for the suburban area Proper
and accurate :engineering, accounting, financial and
statistical records, relating to the construction, cost,
maintenance and operation of its property which at
all times show correctly .and' in detail all its
financial transactions, including al] of its receipts
and disbursements and the .particulars thereof; and
all data needful for the preparation. of the state-
ments and reports hereinafter provided for.
The Company shall, each month, Prepare and
file with-the Suburban Rate Authority the following;
(a) A detailed statement of al} .assets apd ltabil-
hies' of the Company as of the close of the Preceding
month;
(b) A detailed statement showing source and
applicatign of .revenues of the Company from the
sale of mss and of by-products and from all other
sources for the preceding month and Year, up to and
i5cludin; the preceding-month; else all espendttures
of the Company during said "year; al] dividends. and
interests paid;-the cost of all materials used in the
manufacture of gas, :all operating expenses, taxes
and salaries; the cost.. of al] repairs and of all pro-
perty, real or Derspnal; by it purchased, acquired,
constructed or installed; said statements shall be
so prepared as to show the riot income of the Com-
sour esrand tthe use for diapoaition of sad inclome,her
The Company shall also, from time to time, fur-
Wish monthly operating and financial reports and such
other information, reports and atatementsregarding
its property and- business, and the conduct thereof, as
the Suburban Rate Authority may requiro. All nfor-
alatlon, reports and statements furnished to the
Suburban 'Rate Authority by the Company shall be
certified by the President, Secretary or other Propet•
officer "oP the Company
Section 8. The provlsions of this ordinance rela-
tive; to allowable annual return allowable rate of
return, allowable Tate base and accruing .annual
depreciation rates'fixed under the provlsions hereof
and other requirements shall lie considered as con-
ditions hereof, but no such provlsions,. nor any matter,
facf or thing herein contained shall be construed as
aR admission either by the MuniciP~lity or the
Company in connection with any proceeding for the
ac4ttisition of .the Cmnpany's property, or any part
thereof, tinder eminent domain or condemnation pro-
ceedings, or in connection with any proceeding for
the valuation. of the. Company's property, or any part
thereof, during or after the termination hereof, or in
connection with any prrceeding for the fixing of
rates after she termination hereof, to any of which
proceedings the Municipality shall be a party.
Section 9. In determining "allowable annual re-
turn;' "allowable rate of return" and "allowable
rate base" under. Section 4 hereof, the books and
records of the Company, and its predecessors, made
and' kept prior to the Passage of this ordinance,
shall be used insofar as necessary in applying said
Section 4.
Section 1D, The books of account shall contain an
account that may be designated as "Reserve for
Depreciation of ilttlity Plant", or similar term,
which shall show at all times as nearly as maybe
the unexpended or unused balance of accumulated
charges to operating expenses on account of denre-
eiation, replacements, renewals o~r retirements, When
any proberty is abandoned or removed, withdrawn,
retired from, or is not used and useful in the public
service for any cause, the actual. original cost shall
be credited to the appropriate capital account, and
such amount phis the cost incidental to said aban-
donment, removal, withdrawal or retirement shall be
charged to-said reserve; subject, however, to the pro-
visions of the following paragraph. The salvage value
received and any other amounts recovered from said
property shalt be credited to said reserve.
• When a substantial segment of the Company's
utility Property is 'required to be abandoned and re-
t[red from service because of change of type of
gas, or unusual obsolescence, or unforeseen property
damage and such property is not fully covered by
the depreciation reserve or other .reserves or by in-
surance, thenttle unrecoveredbalance of Property of
such property shall .be credited to the depreciation
reserve or other appropriate reserveand be charged
to a deferred charge account designated as "Extra-
ordinary Property Losses". Chartres. to said deferred
ch Kre account shall be' amortized by charges to
op rating expenses as provided for jn Section 4.
If the original cost is not shown by the books
an -records of the Company oc,its predeceaaors; such
a ount shall be .estimated and a .record -shall. be
matte by the Company showing the -facts uponwhich
said estimates LvasOiased, the manner)in which it .was
determined and the person by whom it was made,
o~a oo,a ,,..,,.,.,,.ea e,,,n„nt toe•ethnr with. removal
are made by the Municipality for improved drainage.
or improved traffic conditions, provided however, if
a subsequent relocation or relocations shall he ordered
within fen years from and after the first relocation
the Municipality shall reimburse the Company for
such nanobetterment relocation expense which the
Company may incur on a time and tnaterial basis.
Provided, however, nothing in this ordina~ce con-
tained shall deprive the Company of its rights tinder
Section 161,46, Minnesota Statutes,
Nothing contained in this section shall require
the Company to remove and replace rte mains or to
out and reconnect its service pipe running Prom the
main to the customer's premises at its own expense
where the removal and replacement or cutting and
reconnecting is made for the purpose of a more ex-
peditious operation for the construction or recon-
struction of said sewer or water system; nor shall
anything contained herein relieve any person, per-
_cons or corporations from Lability arising out of
the failure to exercise reasonable care to avoid in-
juring the Company's facilities while performing any
work connected with grading, regrading or changing
the line of any street or public place or with the
construction pr reconstruction oP any sewer or water
system.
Where the Municipality orders theCompany to
relocate any of its facilities, the Company shall Pro-
ceed with sAeh relocation. If such relocation is done
without an agreement first being made as to who
shall pay far the relocation cost, such relocation of
the facilities by the Company shall not be construed
as a waiver of its right to be. reimbursed for such
relocation costs. If the company claims that is should
be reimbursed for such relocation costs, it shall notify
the ~fumicipality within ten (10) days after receipt of
such order.
Section 16. The 3unicipality shall give the Com-
pany reasonable written notice oP plops far street
improvements where paving or resurfacing of a per-
manent nature is involved, which notice shall contain
the nature and character of the improvements, the
streets upon which the improvements are to be
made, the extent of the improvements and the time
when the Municipality is going to start the work,
and, if more than one street is involved, the order in
which this work is to proceed, Paving or resurfacing
of a permanent nature refers only to Portland cement
concrete or high type bituminous concrete.
The notice shall be given to the Company a
sufficient length of time, considering seasonable work-
ing conditions, in advance of the actual cominence-
ment of the work to permit the Cotnpany to make
any additions, alterations or ..repairs to its facilities
deemed necessary by it,
In cases where streets .are at final width and
grade, and the Municipality has installed under-
ground sewer or Water mains and service conne~etions
to the property line abutting the streets prior to a
permanent paving or resurfacing of such streets,
and the Company's main is located under such street,
the Company may be required to install g'~as service
connections prior to' such paving or resurfacing,
whenever it is apparent that gas service will be re-
quired during the five Years Pollowmg the paving
or resurfacing, ;i
Section 17. All mains, services, governors and
other property and facilities shall be so located, con-
structed, installed and maintained as not $e endanger
or unnecessarily interfere with the usual and cus-
tomary trade, traffic and travel upon the streets and
public places of the Municipality. The Company shall
keep and maintain all of its property in good condi-
tion; order and repair, sc that the same shall not
menace or endanger the life or property of any per-
son. The Municipality shall have the right to inspect
and examine at any reasonable time the property
owned or used, in part or in whole, by the Cotnpany
for the purpose oP manufacturing, dish•ibuting, fur-
nishing or selling gas in the suburban area.
Section 18, The Company agrees to pay to the
Suburban Rate Authority, effective January- 1, 1963,
not lees than $30,000.00 per year to be allowed as an
operating expense to' the Company and which shall
be used to secure coml>liance with this ordinance,
and for such other purposes relating to the Com-
pany'e purchased gas costs and g'as supply as the
Suburban Rate Authority shall deem necessary. ThE
amount of such annual payment shall be subject tc
possible revision by the Suburban Rate Authority
and the Company, not oftener than once in five (5J
years, if mutually agreed to.
Section 19. The Company shall at all times pro'
vide and Furnish an adequate, safe and continuous
supply of gas to the Municipality and its inhabitants
subject, however, to the further Provisions of thi
section. The Company sells and distributes ga.
throughout its entire distribution system. The nature
gas distributed by 'the Company is furnished by the
pipeline system owned and operated by Northern~Nat
oral Gas Company, a "natural gas company" nude
the Federal Protocol Gas Act, which subjects ash
Northern Natural Gas Company to the jurisdictioi
of the F
ederal Power Commission
The Company shall not be liable to' the Munici
.~
lit "i ht
pa y or its inhabitants, nor shall the lluntc pa
or any inhabitant who is a customer of.the Company
be liable to the Company hereunder LY reason o
the fa)hire of the Cmm~anv fn Aaliver m• of th
and 14.5 pounds per square inch, absoltte,
i 'es
r r" s incl c h
The erm "lobo ban a ea .hall ode-the
t
~ ' h s Cr •st 1 Fri lee
Col mbi Het t. c. a d
of Bloomin ton u a
g
g
Hopkins, Robbinsdale St. Louis Park and ~W.ayZata;
the villages of Brooltlvn Y7enter, Brooklyn Park, Tieep;
haven, Eden Prairie, Edina, Excelsior, Golden galley,
Greenwood, Hi]]top, Maple Grove, Minnetonka, ~Morn-
ingside, New Hope, -0sseo, Plymouth, Richfield, Ft.
Anthony, Shorewood and Woodland; and rho area of
Fort Snelling. Other municipalities or area adjacent
to ar near the City of Minneapolis or the "suburban
area" may be included fn rite "suburban area" fm•
rate-making purposes; oubject to the provisiops of
Section 72.
The term "Suburban Rate Authority^ aha.li mean
an organization consisting of one member appointed
by the Munjcipal Council of ea Yinnicipality in
the auburlian area adp.pting t noa9ee~and exist-
ing fpp he purpose of admi Ttti~ the rate provis:
ions of this ordmance.'It„ is aivered to employ ron-
sultanta'and othere.and.•sha adopt such l`ules,~,cgu-
lations and ~bylawa ae will erts)d~'r 'roperly~~to
perforin the fanctfons herein provF
Secttorr:2„There is hereby grapt[:d to, Minneapolis
Gas Company; its successors and assigns, for aperiod
extending ,to .:January 1, 1983, from wapd -after the
acceptance of this ordinance by th'B ,L'onpatly, '$'ifd
waiver of rights by said Company refYu'Irpp by Sec-
tiion 27 Hereof, and subject, to -the.teLUTA,, Conditions
and limitations Herein' stated;. the right 'to tnanu-
facture, impprf, 'transport, sell and•'distribute g'as
for heating, illuminating and other purposes within
the ~aimita - of the ~ltinicipality as the' 6ound'aries
thereof now exist or as they may be extended in the
future,and for that pimpose.to establish the neces-
sary' facilities and equipment .aqd to maintain a
manufacturing plant, gas mains, service' pipes. and
any other aP9>urtenances necessary 'to the manufac-..
tore,. sale and djstribittion ~ofgas in and along fhe
streets and public places of said illunicipality; aitd
to do all things which are reasonable, necessary or
cii~stpmary in .the accomplishment of this pbjoctive,
subject; however, to the further provisions of tfiis
franchise. Pro~'-ided, however, that before said Com-
panj~ shall- eaf%blish any plant in said AduniciPality
for the manufacture of gas, the approval pf the ~luri-
icipa]ftY Council of the ° location thereof, ']n the
exercise of a reasonable discretion by said Council,
shall be first obtained'by said Company.
Tf the right or privilege to manufacture, purchase,
transport, mix, distribute or 'sell gas in annexed
territory, shall be owned.ar controlled by the'Coin-
pany at the date. of annexation, said right. or privilege
shall, from. and after the date of annexation and
during the ~bailance of the term hereof, Abe exercised
and controlled by the provisions of this ordinance.
The Company agrees to manage its. plant -and opera-
tions iq a reasonably efficient and economical man-
ner. The .Company also agrees to use due dilil:ehce
ih the matter of the issuance of long-term debt to
assure reasonable cost of such debt, provided, how-
ever, ¢hat this should not be construed as requiring
competitive bids on new debt issues:
.Section 3. The Company shall charge, demand,
collect and receive just and reasonable rates, charges
and cotripensation..as hereinafter provided.. Tlie al-
tering; amending or revising of any rates made by
the Corppany to obtain compliance with this ordiiianee
shall Abe, by the. Suburban Rate 'Authority: The said
Suburban Rage Authority exists for the purpose of
eviewjng gas rates made by the Co~pauy and undert
aking appropriate action, thereon as in this ordinance
uthorized.
Nothing in this ordinance shall prevent the power
erein given to the Suburban Rate Authority to alter,
amend or revise Company rates from being here-
after d'6.legated, by law, to some other governmental
authority.'
From and after the effective date of thia`ordl»,•
once, the Company shall charge, demand, collect and
receive not to exceed the following totes for. gas
suFPlied to each customer at one location in the
entire suburban area, including the Municipality,
for each month, except as said rates shall be .changed
or modified as hereinafter provided, viz;
h'irst 300 cu ft, or less $2.00
Next 3,700 cu ft, 1.43 per M
Next 26,000 cu ft, 1.10 per M
Next ~ 1E0,000 cu ft. 1.00 per M
Next- 140,000 cu ft. 1.00 per M
All aver 300,000 cu ft. .90 per ~t
The rates above specified are called "Block Rates".
The rates permitted by this ordinance, except as
to .natural gas furnished industrial customers `ire for
natural gas having a monthly average total ~-gross
heating value of not less than 950 British Thermal
Units per cubic 'foot,. and shall continue, subject to
adjustment as herein provided.
Bills shall tie rendered at rates permitted by
this ordinance; provided, gowever, that when a bill is
not paid within ten (1D) days after a bill is delivered
or mailed to a customer, the Company may charge;
demand, collect and receive 4he amount thereof plus
ten per cent (10%), The Company may require any
consumer of gas to~ deposit with it a reasonable
amount as security for payment of gas used or to
be used by said consumer. The Company shall pay
interest on the deposit at the rate of six per cent
(6%) per annum.
(a), The said rates sl~ll remain in force and
effect and be adjusted frop~ time to time, a, ]terein-
after provided. In order to avoid undue discrimina-
tion between customers the Company may, at the
time specified in this section and subject to re~~iew
in the name manner as is provided in said ordinance,
djus~t the Block Rates either by changing the own-
er and size of the blocks or by changing the price
ariation between the blocks, or bath, or by changing
e rate form, by submittidg at the time of fj ing
he adjusted 'Block Rates material and Bats suPgort-
ing the desirability for such change or- changee~I~,+.and
the rgasouablenese thereof. Provided, the Cot~pany
shall make a rate structure study at least once in
each five years hereafter. Provided, further, that
the Hlock Rates for any other type of gas furnished
in place of natural gas may be revised by agreement
. itieu
en ea or Let
n tterea am a
ra a a
l o nee ma be
t is
Y
h ~ 'nonce
revision of t is rrdt
o co he s
so as t nform tot P
and according to the terms thereof, by an engineer,
auditor or accountant of the Suburban Rate Authority
duly- appointed.. for such purpose, The engineer,
auditor or, accountant so appointed shall be qualified
and expeMenced in public utility regulatory matters
and an employee of the said Suburban Rate Auth-
ority. Any such alteration, amendrent cr revision
shall be made by order, stating the reasous therefor,
duly served on the Company within hventy (20) days
after notice of such proposed rates shall be given by
the Company,. as in this ordinance provided. The
~lompany shall have the right to a' prompt hearing
and review of such alteration, amendment or refi-
sion in fhe courts of theState of Minnesota, if proper
application is made therefore within thirty (30)
notice of su h alteration a e or
days after c m ndment
revision,. and. if such hearing and review js applied
for,. then until such alteration, amendment or re-
vision-shall be finally sustained or altered by such
courts; the-rate made by theCompany shall remain
ineffect for_ the~perioa as provided in thisordinanae.
At the time of malting the application for review the
Company shall file with the Cler1[ of Cburt a tor-
poste undertaking requiring it to refund,rebate or
comply with .such other relief ' as said courts: may
order. At he hearing provided for. here(n pn the
issue or issues raised by the aforesaid order the
court. shall consider all evidence which may tie
relevant and proper: -
(e): The Company- agrees that when no .change
in an existing rate 1s proposed at the time of a rate
filing, the said- Suburban Rate Authority shall have
the power-ta8lter, amend or "rbvisu ttie said existing
rate in the manner provided in Subsection 3(d), if
tlte.eaip existing rate. is not jn agpordance with the
provisions of this ordinance. The right of the Com-
panyfor court review in such Instance shall also be
the same as. provided~nSubsection 3(d),
(f). -The Company shall not charge, demand, ~collecl
or receive a greater or less or different compensa-
rice for"any service or similar service rendered, or
Yo be rendered., than the rates and charges applicable
tosuch sfrvic.e in effect at the time Yor consumers
in the same Blass, nor shall the Company refund or
remit iri any manner or kiy any device' any portion
of the rates or eflarges so specified. The Company
'shall not offer, extend to, or accept from any. person
or corporation any form of contract or agreement for
service that is not regularly and uniformly appli-
cab]e to all. persons and corporations receiving the
same or like service. The Company shall not extend,
afford or use any rule or regulation; or any privilege
or facility that la not regularly and uniformly appli-
cable to all persons and corporations receiving ser-
vice under the same or like conditions, except as pro-
vlded in Subsection 3(a) hereof,
'Section 4, It is the purpose of this ordnance [o
insure that the consumer shall Pay only a fair, just
and reasonable rate and that such rate will permit the
Gpmpany to makes reasonable return on the capital
investment in the business; as hereinafter defined in
this Section, under an economical and efficient man-
agement of the came,
a . As used in this ordinance "allowable annual
O
return" shall mean the amount computed by appli-
cation of the "allowable rate of return" to ~~the
"allowable rate base" as defined in accordance wftlt
the provisionsof Sttbsectione'(bl, (c), (d), (e), lf),
and (g').
(b). The "allowable rate oS return" shall be
6~%a during calendar years tl'hen the. Company's
average cost of long-term debt capital of the'be-
ginning~of the-current year is not less than 3~%
nor greater than 4r/z%. Long-term debt shall consist
of all Beet due aver one year after date of issue. The
average cost oP long-term debt shall be the weighted
average effective cost of the outstanding long-term
debt at the beginning of the current Year, The'effep-
tive cost of each debt issu al coin red b
e ah 1 be pu 9
dividing .the product pf the interest rate 'and prin-
cipal ainount issued by the net proceeds of the issue.
The net proceeds of an issue shall consist of the
principal amount plus any premiums received, less
any discounts and issuance expense, and less call
premiums when any refunding of an issue results
in a lower effective cost of debt. Whenever there is
a decrease in the Company's average cost of long-
term debt capital below 3~y% or an increase above
4~%, the °allowable rate of return" of 6~% shall
be decreased or increased by 50% of such decrease or
increase. Thereafter, .any contra move in the average
cost pf long-term debt capital. will require the re-
verse adjustment in the "allowable rate of return".
No change iri the "allowable rate of return" shall be
made unless the decrease or increase in the average
cost of long-term debt capital shall equal at least
1/10 of one percentage Point, and in no event shall
the decrease or increase in the "allowable .rate of
return" be other than in multiples of 1/20 of one
percentage. point.
(c), The "allowable rate base" shall be the sum
of the "fair value of the suburban area utility pl-ant"
used app useful in the public service as provided
in Subsections {d), (e) and (f) and working capital
as Provided in Section 5, less average contributtona
in aid of construction and average cash advances for
construction, as .reflected on the Company's books.
(d) The "fair value of the suburban area utility
plant" anal] be the-sum of 5'0% of the average orig-
inal plant cost including the current year net ~1t-
tions, less depreciation per books, computed on a
monthly basis, and 50% of the "reproduction cost
new",Plant as defined in Subsection-(e) and (P), less
depreciation. Depreciation of the "reproduction cost
new" plant shall be computed !by the use of the ratio
of the book depreciation reserve to the original plant
gross cost, plus three (3) percentage Pointy
The 50% weighting of the "'reproduction cost new"
plant shall be used as long as the Company's ratio
of debt capital does not exceed 60% at the beginning
of the current year. If it exceeds 60%n the 50% weight-
ing of the "reproduction cost new" plant will be de-
creased by one percentage point for every one per•
ventage point increase in the debt capital ratio above
60%. In stick event the 50% weighting of the original
plant cost will be increased by eacH percentage point
,
2 'e
O Dt.tribution and Lhhzation Ex ens •
p es,
(3) Customers' Accounting and Collecting Ex•
penses;
(4) Sales Promotion Expenses;
(5) An item to~ cover "Administrative and Gen-
eral Expenses" which shall be the just, fair and rea-
sonable cost to the Company pi all of the sub-accounts
that are included in such Administrative and General
Expenses, but the aggregate of "Administrative Sal-
aries" and "General Incidental, Expenses" classified
as in the present practice of the Company in these
taccounts shall not exceed in any calendar year three
.'per cent (3%) of the annual gross revenue, including
contrlbutton~, gratuities and donations not to exceed
three-tenths of oneper cent(3/10 of 1%) ofthe an-
nual gross revenue. ,
(6) All taxes .and governmental impositions of
every nature actually paid by the Company directiy-
to governmental tax colleetiong ag~epciea or acerue,p
in accordance with general acceptable accounting
Iirlnciples: Any tax other than an ad valorem tax
which may hereafter be lawfully authorized and
thereafter separately imposed by any municipality.
shall be added. only to the bills of the. customers
tcithin such municipality,.
('i) An annual allowance, beginning January 1,
1963, for .depreciation of depreciable property owned
by the Company and used and. useful In rendering
gas service in the suburban area for each calendar
year during the term of this ordinance of an amount
designed to recover the original -cast cf such de-
Pt'eciable property over the estimated average service-
life of each group of property on an .straightdine
hosts, romputed by application of the annual deprecia-
tion rates,. now used by the Company in recording
depreciation on the books of the Company to the
original cast of depreciable property included in
each of the inajor property classifications and pro=
perry eharg~eable to depreciation expenses. Provided, -
however,. such annual depreciation rates maybe re-
vised periodically so as to reflect a]] factors hearing
on [he amount designed to recover the original cost
of such depreciable property over its estimated aver-
age service-life;
(8) All other actual and proper classes of main-
tenance and operating expenses of the Company;
(9) An item to cover taxes, depreciation and
return on any plant not included fn the suburban
area Allowable Rate Base, but which is used and
useful in rendering public service therein. A credit
item (deducted from expenses) to' cover taxes, de-
preciation and return on any plant included in the
suburban area allowable rate base, but which is
properly allocable to rendering service outside the
suburban area, subject, however, to the provisions of
Section 1.
(101 Annual allotvanoe for amortization of extra•
ordinary property losses resulting from change in
type of gas, unusual obsolescence or unforseen pro-
perty damage.
Appropriate items map be amortized or accrued
according to accepted accounting practice and, ex-
cept as otherwise provided in this ordinance far
specific items, the actual experience oP the Company
shall be the determining factor' in support of the
amounts and rates of amortization or accrual for
such items, as such experience gives a definite guide.
All expense items, whether charged directly and
entirely in a calendar year or amortized or accrued
over a longer period, all revenue items and all balance
sheet items shall ~be, at all times, .recorded by the
Company in substantial accordance with the Uniform
System of Accounts for Gas Utilikiea pf the National
Association oP Railroad and Utility Commissioners,
except as otherwise provided in this ordinance and
except that installment and carrying charges will
be credited to gross merchandise sales.
The allocation of the Company's operating ex-
penses and Plant •[vithin and without the suburban
area shall be made 'by the Company in accordance
with a formula that reasonably reflects the coats
as they occur for rendering service within and
without the said area. Any change in such formula
made in any rate filing will be specifically referred
to in a separate communicatipn filed with the Sub-
urban Rate Authority at the time of "the rate filing,
When there is a balance in the account for
cumulative. overage in excess of the allowable re-
turn, such balance shall be credited with interest
computed at the current prime interest rate. Net
refunds (after taxes) from any supplier shall, be
credited to such account. Overages in such account
may be used, by mutual agreement, in such manner
as will minimize or prevent violent fluctuations in
rates, notwithstanding the provisions of Subsection
3(b).
Section 5. THe Company shall be entitled to fair
and adequate working capital in an amount deter-
mined as follows:
As used in this ordinance, "working capital"
shall mean an amount applicable to trie suburban
area for the calendar year of 1963, and for oath
calendar year thereafter, equal to the annual average
funds invested by the Company during such calendar
years in materials and supplies on hand, merchan-
disc accounts receivable, prepayments and deferred
charges properly chargeable to operations, plus a
cash fund equal to ten (10-) days' average daily
operating expenses and taxes, plus one-eighth ('/s)
of the annual operating expenses and taxes, less
credits for the annual average of accrued taxes and
purchased gas accounts payable.
The working capital computed in accordance with
the foregoing formula shall be inchtded in the allow-
able rate base as provided in Subsection 4(c).
Section 6. The Company shall file with the Sub-
urban Rate Authority printed schedules which shall
be kept open for public inspection, showing al] rates,
charges, compensation, forms of contracts or agree-
ments made, established or enforced or to b8 enforced
with customers in the auburbmn area, together with
all rules and regu•lationa relating to rates, charges or
aervicee rendered or to be rendered and all privileges
allowed and facilities afforded by the Company to
„a u tu„u.w a ura•'ru ii ..ii ax
r the t e
g p r p
received and any other amounts recovered
property shall be credited to said reserve.
' When a substantial segment of the Company's
utility property ia'required to be abandoned and re-
tired from service because of change of type of
gas, or unusual obsolescence, or unforeseen property
damage and aucH property is not fully covered by
the depreciatipn reserve or otherreserves or by in-
surance, thentlle unrecovered balance of property of
such property shall be creditedtothe depreciation
reserve or other appropriate reserve and be charged
to a deferred_cliarge accoupt designated as "Extra-
ordinary Property losses". Charges to said deferred
charge account shall be amortized by charges to
operating expenses as provided. for in Section 4.
if the original-cost is not shown by the books
apd records_of:the Company or its predecessors; such
amount shalll be estimated and a record -shi}]t be
made by the "Company showing the. facts ttpnp which
safdestimates.was~based, the manner in tvhich3t tvas
determined; and the person by whom it: was made,
and said estimated amount, together with. removal
costs• and: salvage -value, .or other. amounts received
or recovered from said prpperty, shall be accounted
for in the manner as hereinabove provided,
Section 11: The Company shall at all times, keep,
maintain and preserve all. the .books, records 'and
'accounts of 'the Minneapolis Gas Light Company, a
Goprporation "prgapized-under the laws. of the State
of'Minnesota, and the Minneapolis Gas Light Company,
a corporatipn orgagiaed under the lawsof the State
of Delaware,-the predecesaora of; the Company, and
such books records and accounts shall atallreason-
able times tie open to irtspectiop and examination by
the Subnrb'an Rate Authority, a~a providedin Section
6, in respoct'to the hooka, records and accounts of
the Company, ~~ i
The Company shall set up; keep and maintain at
all. times, at its general .offices, acciiTate books of
account, shpwing among other. things.. as nearly as
may be the actual original cost of the property owned
by the Company within the suburban area. For this
purpose, the books .and records of the predecessor
companies (Minneapolis Gas Light Company of bifn-
nesota and. Minneapolis Gas Light Company of Del-
aware] may be-used without pre]udice fo the Sub-
. urban gate Authority. in any. proceeding, where the
actual original cost may be an issue, All property
added shall be entered on the books : at its actual
original cost
Section Y2. The Company agrees to lay such of
its mains and pipes as come within its requirements
for service as soon as reasonably. possible to do so.
The Company shall give reasonable :notice to the
municipaLengineer of plane-to lay mains in any part
of the Municipality, .The laying of such mains shall
not unduly interfere k~lth established municipal
planning. Extensions of service beyond the borders
of the suburban' area as herein defined shall not
collectively cast any undue burden on the customers
in cold suburban area.
Section 13. The council of the Municipality shall
have the right to make such reasonable rules and
regulations as may. be necessary to provide adequate
and proper service. The Municipality shall .have the
power to provide for the inspection, examination and
ascertainment of the-accuracy of any and all gas
meters used or intended to be tiled for measuring
and ascertaining the quantity of gas supplied by the
Company and to inspect,. examine and' ascertain the
accuracy of recording pressure gauges and of all
apparatus .for testing and proving the accuracy of
gas meters,.
Section _19. The Company shall not open or dis-
turb the surface of any street or public place far any
purpose without first having obtained a permit
ss tp' dp from the proper Municipal officials, for which
permit the Municipality may Impose a reasonable fee
to be Fatd by the Company. The mains, services and
other property placed In the streets and public
places pursuant to such permit shall be located in
the streets or portion of the streets and public places
as shall be designated by the Municipality, The
Company shall, upon completion of any work re-
qulring the opening oP any street or public place,
restore the same, including the paving and its foun-
dations, to as good condition as formerly, and shall
exercise reasonable care to' maintain the same for
1WO (2) Years thereafter~in good condition. Said
work shall be performed- with due diligence and if
the Company shall fail promptly to perform and
complete the work, to remove all dirt and rubbish
and to put the street or public Place in good condi-
tion, the Municipality shall have tfie right tb put the
street or .pwblic place in good condition at the ex-
'Sense of the Company; and. the Company shall, upon
demand, pay to the Municipality the cost of such
work done Por or performed by the Municipality,
together with ten per cent (10%) additional at liq-
uidated .damages. Notwithstanding the foregoing pro-
visiona of this section, the Company may open and
liaturb the surface of any street- without a permit
where an emergency exists requiring the immediate
repair of a gas main or gas service: The Company. in
loch event will request a permit not later than the
Second working day thereafter.
Section 15, Whenever the Municipality shall grade,
regrade or change the line of any street or public
:lace or construct or reconstruct any sewer or water
System therein and' shall, in the .proper exercise of
.its police power, and with due regard. to seasonable
working conditions, order the Company. to relo-
cate permanently its mains, services and other pro-
.perry located in said street or pwblic-place, the Cpm-
pany shall relocate its. facilities at its own expense.
Tin construing this paragraph, the obligation of the
Company to relocate its. facilities shall be as appli-
cable to water sYStemsas iris to sewer systems. The
Municipalityahali givethe Company reasonable n ice,
of;~p]gtt~1g,,,ta;,ggr,aade, regrade or change the liyi~rbi'~ny`'`~~
~tre~t'bi61~r~'bit~ place`br to construct or reconstruct
-arty sewer or water .system. therein.
'. ,The Compan , : required to relocate its
facilities at its Dnse where grade changes
g ~_...~.:....,_W... ._
y vacs ie •
Y sun t
o to c, m
e o
Pony's purchased gas casts and °'a Hsu 1
5 s pp y as the
Suburban Rate Authority shall deem necessary, The
amount of such annual payment shall be subject tc
possible revision by the Suburban Rate Authority
and the Company, not oftener than once in five (5)
Years, if mutually agreed to.
Section 19. The Company sha71 at all times pro•
vide and furnish an adequate, safe and continuous
supply of gas to the Municipality and its inhabitants,
subject, however, to the further provisions of thi;
section. The Company sells and distributes gas
throughout its entire distribution system. The natural
gas distributed by 'the Company is furnished by the
pipeline system owned and operated by Northern ~A'at•
oral Gas Company, a "natural gas company" under
the Federal Natural Gas Act, which subjects said
Northern Natural Gas Company }o the jurisdiction
of the Federal Power Commission.
The Company shall not be Liable to' the Munici-
pality or its inhabitants, nor shall the illunibipality,
r
0
any mhabttant who is a customer o
P. the Company,
be liable to the Company hereunder by reason of
the failure of the Company to deliver, or o~f the
Municipality or a customer to receive, natural gas
as a result of acts of God, or the public enemy,
inability of pipeline supplier to furnish an adequate
supply due town emergency, an order or decision of
a public regulatory body or other acts beyond the
control of the party affected.
Whenever any of the occurrences named above
tape place, th~~ Company shall have the right and
authority and it shall be its duty to adopt reasonable
rules and regulakjuns in connection with limiting,
curtailing or allocating extensions of service or sup-
ply of gas to any customer or prospective customer,
and withholding• the supplying of gas to new cus-
tomers, provided that such rules and regulations shall
be uniform as applied to each class of customers;
classifications of customers shall he reasonable and
shall be nondiscriminatory as between municipalities
in the suburban area.
If service is temporarily suspended because of
any of the reasons set forth above, occuring through
no fault or negligent act on the part of the Company,
such suspension shall not be made the -basis of any
action or proceeding to terminate this franchise,
The quality of the ,gas sold in the suburban area
shall be the same as that sold to the Company's cus-
tomers in the City' of Minneapolis.
Tho pressure at which gas is supplied and the
method and manner of testing the heating value,
quality, purity and pressure of the gas supplied,
shall be in accordance with accepted national stand-
ards.
Section 20, The 'Company shall indemnify, keep
and hold the Municipality free and harmless from
liability on account of injury or damage to persons
or property growing out of the negligent construction,
maintenance; repair and operation of its property, and
in the event that suit shall be brought against the
Municipality either independently or jointly with
the Company on account thereof, the Company, upon
notice to it by the Municipality, shall ~ defend the
Municipality in any suit at the cost of the Company,
and in event of a final judgment being obtained
against the Municipality, either independently or
jointly with the Company, the Company shall pay
such judgment with all costs and hold- the B-Tunici-
pality harmless therefrom,
Section 21. Nothing herein shall 'be construed to
limit the right of the ~4unicipality to acquire the
property of the Company under any act of the
legislature now or hereafter existing, nor under any
pprevisions of law now existing or hereafter adopted.
Tn the event the Municipality should desire to ac-
quire the property of the Company by the exercise
of eminent domain, as herein set forth, the Company
agrees that its value for the purpose of such acquisi-
tion shall not include any amount for the value of
any right, privilege, franchise or grant from the
State of~Minnesota or the Municipality, for good will,
or for future profits, and that in determining said
value no regard shall be had to the amounts of
stocks, bonds and other obligations of the Company,
Section 22, The rights and privileges hereby
granted are hot exclusive and the Municipality ex-
pressly reserves the right to grant like rights and
priviSlegesonto23 tIPrtherCompanyoshall tbenin default
in the performance of any of the material terms and
conditions of this ordinance and shall continue in
default for more than ninety (90) days after receiving
notice from the Municipality of such default, the
Municipal Council may, by ordinance duly passed
and adopted, terminate all rights granted under this
ordinance to the Company. The said notice of de-
fault shall be in writing and shall specify the pro-
visions of this ordinance in the performance of which
it is claimed that the Company is in default. Such
notice shall be served in the manner provided by the
laws of Minnesota for the service of a summons and
complaint in a civil action. The reasonableness of any
ordinance so passed declaring a forfeiture of the
rights and privileges granted by this franchise or-
dinance shall be subject to review by a court of
competent jurisdiction,
Section 24. Any change of the form of govern-
ment of-the .Municipality as authorized by the State
of Minnesota shall not affect the validity of this
franchise, Any municipal corporation succeeding the
Municipality shall, without the consent of the Com-
pany, succeed to~ all the rights and obligations of
the Municipality provided in this franchise,
Section 25. Except as herein otherwise specifically
provided, whenever notice is to be given to 'the
Company, such notice in writing, addressee, ,to th&:
President Vice. Pr ~eoretary pr r & 'ri~r•. °
o'~Qta~'~~?jttQ'~fl"aCa7t~"MinneA .~ ~4 ~~.
t~e Company shall be service of polls office
whenever notice is to be such notice; and
given to the Municipality,
such notice, in writing, addressed to the municipal
Clerk and delivered at his office, shall be service of
(Continued on Page Seven)
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