That the City Council:

A.  Approve the first reading of Ordinance No. ____ entitled: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LA HABRA, ORANGE COUNTY, CALIFORNIA GRANTING A PIPELINE FRANCHISE TO CRIMSON CALIFORNIA PIPELINE, LP TO OPERATE AND MAINTAIN CERTAIN PIPELINES AND APPURTENANCES FOR THE TRANSPORTATION OF PETROLEUM, OIL, GAS, GASOLINE, WATER, AND OTHER LIKE SUBSTANCES IN THE CITY OF LA HABRA.

B.  Approve and authorize the Mayor to execute a Franchise Agreement with Crimson California Pipeline, LP for a period of 20 years with a 20 year option.

Ordinance No. 1698 granted a pipeline franchise to Crimson California Pipeline, L.P. (Crimson) in August 2008, which expired in September 2023. In March 2023, Crimson filed an application for a new pipeline franchise agreement and remitted the required $5,000 application fee. Under the California Public Utilities Code and Chapter 5.48 of the Municipal Code, companies seeking franchise agreements must file an application with the City and a Public Hearing must be noticed and held prior to the granting of the franchise.  At its regular meeting on Monday, September 18, 2023, the City Council approved and adopted a Resolution declaring its intention to grant a pipeline franchise to Crimson and set the Public Hearing for October 16, 2023. 

Upon the granting of the franchise, Crimson will be required to submit a surety bond to the City in the amount of $100,000 parental guarantee from their parent company (Crimson Midstream, LLC), proof of specified insurance, and a 24-hour emergency contact line. The proposed franchise agreement is for a 20-year term with a 20-year renewal option solely at the City’s discretion.

This pipeline runs generally on La Habra Boulevard from the La Habra/Brea City Limits to the intersection of La Habra Boulevard and Palm Street south on Palm Street through a portion of the City of Brea on Palm Street to Lambert Road, east on Lambert Road to the La Habra/Brea City Limits and beyond into Brea. The portion within the City of La Habra has an active portion of 2,868.39 linear feet, an idle portion of 299.81 linear feet for a total amount of 3,169.20 linear feet.

Crimson will be responsible for payment of annual franchise fees by April 1st of each year. Franchise fees are set by the Public Utilities Commission (PUC) based on the diameter and linear feet of the pipeline. Based on the formula set by the PUC, including Consumer Price Index (CPI) increases, the annual franchise fees on this pipeline would be approximately $1,268.