An ONG presentation regarding a potential franchise agreement was heard by the Edmond City Council at a workshop Tuesday. Information presented in the workshop states that ONG rates for the total consumer bill will not be increased by the proposal. There would, however, be a slight line-item franchise fee from 2% to 3% of gross receipts.
“It’s compensating the city for the use of public ways,” said Dustin Fredrick, ONG attorney.
ONG first approached the city about a potential franchise agreement in June, said Larry Stevens, city manager. Voter approval would be needed of any franchise with a simple majority vote. The city approved a similar agreement with ONG in June.
“It’s part of a formal statewide strategy with ONG to pursue formal agreements,” Stevens said.
Since 1938 Edmond has had a gross receipts ordinance for natural gas which was last amended in 1954.
“It’s identified that we receive 2% of those gross revenues,” Stevens noted. “ONG is offering to increase our share of that revenue from 2% to 3%.”
Director of Finance Warren Porter said the increase would bring approximately $300,000 a year to the city’s general fund revenue. Such an agreement has been worked out with Midwest City and Oklahoma City.
A major infrastructure issue for the city is how service providers respond when the city needs utilities relocated and other requests related to road projects. Edmond staff has noted that ONG is one of the best utilities to work with.
“As you know not all utilities are that great to work with at times,” Stevens said.
Fredrick said the agreement sets out the rules and responsibilities between the utility and the city for relocations. ONG will handle the special election costs, said Martie Oiler, ONG regional manager.
“To do that correctly you should have a franchise that’s voted on by the citizens of the community,” Fredrick said.