This ordinance and franchise agreement between the City of Lubbock ("City") and West Texas Gas, LLC ("WTG" or "the Company"), will grant the Company non-exclusive franchise and rights to conduct the business of acquiring, maintaining, constructing, laying, repairing, removing, replacing, installing, operating, and disposing of a gas system for the sale, transportation, delivery, and distribution of natural gas within the municipal boundaries of the City and to the residents and businesses located therein for light, heat, power, and any other purpose. This agreement will allow WTG the right to use both present and future streets, roads, highways, alley, public way, and other real property owned by or under the control of the City, in order to conduct their authorized operations. For the purposes of this ordinance and agreement, the Company will remit, on a quarterly basis, an amount equal to five percent (5%) of gross revenues of the system. The amount of 5% is widely used as a standard rate across the State of Texas for franchise agreements, and mirrors the State Franchise Agreement amounts for other utility services. Gross revenue in this agreement is defined as all revenue derived or received by WTG from or in connection with the operation of the natural gas system within the City, for services provided to residential, commercial, and industrial customers. Gross revenues applicable to the remittance to the City will not include revenue of any affiliate or subsidiary of WTG operating solely outside the limits of the City, taxes imposed by law on customers that WTG is obligated to pass through to the taxing entity, investment earnings, and revenues from the sale, distribution, or transportation of natural gas, to or for governmental or municipal customers. This agreement is for a period of 15 years. |