10.    GAS FRANCHISE AGREEMENT


ENTENTE DE CONCESSION DE GAZ

 

 

COMMITTEE RECOMMENDATIONS

 

That Council:

 

1.         Approve the draft by-law, in the general form of that attached as Attachment 1 to this report, to be enacted following Ontario Energy Board (OEB) approval;

 

2.         Approve the draft franchise agreement, in the general form of that attached as Attachment 2 to this report (which will become Schedule A to the draft by-law);

 

3.         Approve the submission of the By-law, including the Franchise Agreement, by Enbridge to the OEB for approval pursuant to the provisions of the Municipal Franchises Act;

 

4.         Request the Ontario Energy Board make an order to dispense with the assent of the municipal electors of the attached draft By-law pursuant to the provisions of Subsection 9(4) of the Municipal Franchises Act;

 

5.         Accept from Enbridge a payment of $150,502.50 representing total and final settlement of the disputed 2001 Road Cut permit fees.

 

 

RECOMMENDATIONS DU COMITÉ

 

Que le Conseil :

 

1.         approuve le règlement provisoire, dans la forme générale de l’annexe « 1 » ci-jointe, qui doit être promulgué par suite de l’approbation de la Commission de l'énergie de l'Ontario;

 

2.         approuve l’entente provisoire de concession, dans la forme générale de l’annexe « 2 » ci-jointe (qui deviendra une annexe au règlement provisoire);

 

3.         approuve la présentation du règlement et de l’entente de concession faite par Enbridge à la CÉO aux fins d’approbation, conformément aux dispositions de la Loi sur les concessions municipales;

 

4.         demande à la Commission de l'énergie de l'Ontario de prendre un arrêté d’administration, avec l’accord des électeurs municipaux, du règlement provisoire ci-joint, conformément aux dispositions du paragraphe 9(4) de la Loi sur les concessions municipales;

 

5.         accepte un paiement d’Enbridge d’un montant de 150 502,50 $ représentant le règlement total et définitif des droits contestés de permis de terrassement de 2001.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DOCUMENTATION

 

1.                  Public Works and Services, A/Deputy City Manager’s report dated 17 May 2006
(ACS2006-PWS-INF-0003).


Report to/Rapport au:

 

Corporate Services and Economic Development Committee

Comité des services organisationnels et du développement économique

 

 

17 May 2006 / le 17 mai 2006

 

Submitted by/Soumis par:  R. G. Hewitt,

Acting Deputy City Manager/Directeur municipal adjoint par intérim,

Public Works and Services/Services et Travaux Publics

 

Contact Person/Personne-ressource : W.R. Newell, P.Eng.,

Acting Director, Infrastructure Services/Directeur par intérim, Services d'infrastructure,

(613) 580-2424, extension/poste 16002, wayne.newell@ottawa.ca

 

City Wide

 

Ref N°: ACS2006- PWS-INF-0003

 

SUBJECT:

Gas Franchise Agreement

 

 

 

OBJET:

ENTENTE DE CONCESSION DE GAZ

 

 

 

REPORT RECOMMENDATIONS

 

That the Corporate Services and Economic Development Committee recommend Council:

 

1.         Approve the draft by-law, in the general form of that attached as Attachment 1 to this report, to be enacted following Ontario Energy Board (OEB) approval;

 

2.         Approve the draft franchise agreement, in the general form of that attached as Attachment 2 to this report (which will become Schedule A to the draft by-law);

 

3.         Approve the submission of the By-law, including the Franchise Agreement, by Enbridge to the OEB for approval pursuant to the provisions of the Municipal Franchises Act;

 

4.         Request the Ontario Energy Board make an order to dispense with the assent of the municipal electors of the attached draft By-law pursuant to the provisions of Subsection 9(4) of the Municipal Franchises Act;

 

5.         Accept from Enbridge a payment of $150,502.50 representing total and final settlement of the disputed 2001 Road Cut permit fees.

 

 


RECOMMANDATIONS DU RAPPORT

 

Que le Comité des services organisationnels et du développement économique recommande ce qui suit au Conseil :

 

1.         approuver le règlement provisoire, dans la forme générale de l’annexe « 1 » ci-jointe, qui doit être promulgué par suite de l’approbation de la Commission de l'énergie de l'Ontario;

 

2.         approuver l’entente provisoire de concession, dans la forme générale de l’annexe « 2 » ci-jointe (qui deviendra une annexe au règlement provisoire);

 

3.         approuver la présentation du règlement et de l’entente de concession faite par Enbridge à la CÉO aux fins d’approbation, conformément aux dispositions de la Loi sur les concessions municipales;

 

4.         demander à la Commission de l'énergie de l'Ontario de prendre un arrêté d’administration, avec l’accord des électeurs municipaux, du règlement provisoire ci-joint, conformément aux dispositions du paragraphe 9(4) de la Loi sur les concessions municipales;

 

5.         accepter un paiement d’Enbridge d’un montant de 150 502,50 $ représentant le règlement total et définitif des droits contestés de permis de terrassement de 2001.

 

 

BACKGROUND

 

Enbridge Gas Ltd. is the local distributor of natural gas services in the City of Ottawa and surrounding area.  Enbridge Gas had Franchise Agreements with each of the eleven former local municipalities to construct and operate works for the distribution of gas within the geographic limits of these municipalities.  For the most part, the term of these agreements were for a twenty (20) year period.  A number of those agreements have expired over the past few years but have been extended by the Ontario Energy Board (OEB).  The most recent extension to 30 June 2006 by Interim Order 2006-0032 included agreements with the former municipalities of Nepean, Goulbourn, Vanier, Cumberland, Osgoode, Ottawa, Rockcliffe Park and Rideau.

 

The Municipal Franchise Act (MFAct) is the enabling legislation for City Council to enter into a Franchise Agreement with Enbridge Gas.  The MFAct provides that a municipal by-law granting, extending or renewing a right to construct or operate a public utility must set forth the terms and conditions and the period of duration for which such right is to be granted, and that the by-law must, unless waived by the OEB, receive the assent of the municipality.  The document embodying the terms and conditions and period upon which the right is to be granted is referred to as the Municipal Franchise Agreement (MFA).  The MFAct also requires that prior to the enactment of a by-law, the OEB must first approve the terms and conditions and the period of duration of the agreement.  Before making an order granting its approval or refusing to do so, the OEB will hold a formal public hearing in this regard.

 

In 1987, following a hearing to review the adequacy of existing forms of municipal franchise agreements for the distribution of gas in Ontario, the OEB approved a new Model Franchise Agreement (1987 MFA) to serve as the template for negotiations of initial agreements and for the renewal of existing franchises.  The 1987 MFA was amended in January 2001, and is now referenced as the 2000 Model Franchise Agreement (2000 MFA).

 

The 2000 MFA is the instrument by which a municipality in Ontario consents to the provision of a gas service within the municipality and to the use of and access to its highways for that purpose.  In negotiating a new agreement with the City of Ottawa, Enbridge Gas has insisted that the 2000 MFA developed by the OEB must form the basis of an agreement with the City.  Otherwise, any changes would need to be approved by the OEB and this would impact the model agreement being used by natural gas distributors in their dealings with Ontario municipalities.

 

 

DISCUSSION

 

In negotiating a new Franchise Agreement with Enbridge Gas, staff has been guided and constrained by generally recognized principles of good public rights-of-way management, by the 2000 Model Franchise Agreement, and by the enabling legislation and regulations of the Municipal Act.

 

Road Allowance Management

 

Good municipal management of public rights-of-way or road allowances is required to provide safe and efficient access for many competing uses.  Apart from pedestrian and vehicular use, rights-of-way are used for the placement of permanent facilities and equipment for sewer, water, gas, electricity, traffic signals, street lighting, telecommunications, transit and steam heating.

 

The Federation of Canadian Municipalities has been working with municipalities to assist in addressing the increasing challenges associated with the management of rights-of-way.  One product of that work was the establishment of Right-of-way Management Principles (Attachment 3).  These Principles had been endorsed by the former municipal Councils and were endorsed again by Council in March of 2001 (ACS2001-TUP-INF-0006). 

 

Model Gas Franchise Agreement

 

Beginning in 1998, the Association of Municipalities of Ontario (AMO) with the input of its members, met with the Gas Companies (Union Gas Ltd., Enbridge Consumers Gas and Natural Resources Gas Limited) to make changes to the 1987 MFA.  While a number of minor issues were mutually agreed upon, there remained a number of unresolved issues including permit fees, pavement degradation damage costs, compensation, insurance/liability, renewals, legislative changes, default, relocation costs and abandoned pipe.  The matters were submitted to the OEB for resolution.  The OEB commenced a proceeding (RP-1999-0048) on 01 November 1999.  The OEB's decision and the 2000 MFA were released on 11 January 2001 (Attachment 2).

 

The 2000 MFA incorporated amendments agreed to by the parties leading up to the hearing and during the post hearing discussions.  The 2000 MFA did not fully address some issues of principal concern to municipalities based on the Federation of Canadian Municipalities Right-of-way Management Principles endorsed by Council.  These concerns included issues around the duration of the agreement, relocation costs, abandoned pipes, alternative easements, construction issues, and fees and compensation.

 

Over the past few years, there have been many attempts by staff to negotiate terms that would be more advantageous to the City.  However, Enbridge has not been amenable to any changes to the 2000 MFA since there would be a requirement to obtain OEB approval of the changes.  Based on experience with the OEB, any changes to the Model Franchise Agreement would not be acceptable.

 

While the 2000 MFA does not address all of the City’s issues, it does provide the benefit of having one agreement for the management of all natural gas installations in the City.  At this time, the City continues to work under the agreements of the former municipalities.  Many of these have been extended by the OEB for one year terms in anticipation that a new agreement would be endorsed by the City.  The OEB has now initiated a process under the MFAct that could see a new agreement imposed on the City.  Staff is of the opinion that it would be to the City’s benefit to endorse the new agreement with Enbridge based on the 2000 MFA.

 

New Franchise Agreement for the City of Ottawa

 

A general form of the proposed draft by-law is provided as Attachment 1.  The by-law makes reference to the Model Franchise Agreement (Attachment 2) that outlines the terms and conditions of the new agreement.  This will be included as Schedule A of the by-law.  The by-law also identifies all of the agreements with the former municipalities that are to be repealed.

 

In terms of background for Recommendation 4, the approved by-law will be submitted to the OEB for approval since the OEB has jurisdiction over the delivery of natural gas.  The MFAct requires that consent of the municipal electors be obtained, but also provides that the OEB may dispense with this requirement.  Since the provision of natural gas in the City is a well established service in the City, and this is a renewal only, it is reasonable to request that the OEB dispense with this requirement.

 

 

CONSULTATION/PUBLIC NOTIFICATION

 

The 2000 MFA developed by the (Ontario Energy Board) OEB forms the basis for this agreement between the City of Ottawa and Enbridge Gas.  In the late 1990’s through 2000, the OEB undertook an extensive public consultation including written submissions and oral presentations.  The former Region of Ottawa-Carleton made both written and oral representations along with AMO and various other municipalities including the City of Toronto.

 

The City's Legal Services and Financial Services Branches have been involved in the negotiations for this agreement and to reach a financial settlement on the outstanding Road Cut Permit fees.

 

 

FINANCIAL IMPLICATIONS

 

The OEB report released on 11 January 2001 allowed the charging of fees by municipalities in the 2000 MFA.  As such, Enbridge Gas began to pay Road Cut Permit fees on 11 January 2001.  However, in passing the new Municipal Act 2001, the Province removed the ability for municipalities to impose fees and charges on gas and hydro distribution companies.

 

Prior to the changes to the Municipal Act, there were 2 Sections (220.1 and 308) that referenced a municipality’s ability to impose fees and charges.  Because both these sections were not changed at the same time, there was a disagreement between the City of Ottawa and Enbridge as to the date that the right to charge fees had been removed.

 

Regulation 61/01 prohibited municipalities from imposing fess and charges on gas distributors, and came in to effect on 12 March 2001 but referred only to section 220.1 of the Municipal Act.  Prior to 2002, the City relied on Section 308, (as well as Section 220.1 of the Municipal Act) to regulate the entry onto, the cutting and reinstatement of City road rights-of-way and the collection of permit fees.  Section 308 provided the authority for Council to establish such a By-law:

 

" For placing or permitting any person under such conditions as may be agreed upon to place, construct, install, maintain and use objects in, on, under or over sidewalks and highways under its jurisdiction, to permit any person to make, maintain and use areas under and openings in the highways and sidewalks, for prescribing the terms and conditions upon which the same are to be placed, constructed, installed, maintained or used and for making such annual or other charge for the privilege conferred by the by-law as it considers reasonable."

 

Section 308 of the Municipal Act was repealed on 12 December 2001.

 

With the filing of Regulation 61/01 in March 2001, which prohibited municipalities from imposing fees and charges on gas and electrical distributors, the OEB on 11 April 2001 amended the 2000 MFA by deleting any reference to permit fees and instead elected to stay silent on fees, leaving it up to provincial regulations to govern on this matter.

 

In reaction to the Province's actions, Council, at its meeting of 28 March 2001 (ACS2001-TUP-INF-0006) approved a resolution requesting the Province, among other things, to consult with municipalities on the interpretation and financial implications of Regulation 61/01, urging the Province to withdraw Regulation 61/01 and proposing that municipalities be expressly permitted to charge utility companies a permit fee for the use of their rights-of-way, sufficient to cover all administrative and road related costs.  Staff followed up on Council's direction by writing and making presentations to the Ministry of Municipal Affairs and Housing (MMAH) on the City's concerns with respect to Regulation 61/01 and by writing to other major Ontario municipalities.

 

Because the City had always relied on Section 308 of the Municipal Act for charging permit fees, it continued to do so until it was repealed on 12 December 2001.  However, Enbridge maintained that the City’s ability to charge fees and permits was removed 12 March 2001 (when the Province filed Regulation 61/01).

 

In accordance with the City's Road Cut By-law, permit fees in the amount of $313,701.95 had been charged to Enbridge Gas between 12 March 2001 and 12 December 2001 (the date the new Municipal Act received royal assent).  This amount has been in dispute between the City and Enbridge in the finalization of the new Franchise Agreement.  Due to the ambiguity surrounding the 2 dates and in the interest of finding a resolution to this ongoing dispute, Enbridge has agreed to pay outstanding charges in the amount of $150,502.50.  The City will waive all interest charges associated with the disputed fees.

 

 

ATTACHMENTS

 

Attachment 1 – Draft By-law

Attachment 2 – Model Franchise Agreement

Attachment 3 – Federation of Canadian Municipalities Right-of-way Management Principles

 

 

DISPOSITION

 

Legal Services will finalize the By-law for signature and submit the document to Enbridge for their submission to the Ontario Energy Board.

 

Public Works and Services will administer the Gas Franchise Agreement.

 

Financial Services will administer the financial resolution.

 


ATTACHMENT 1 – DRAFT BY-LAW

 

BY-LAW NO. 2006 -

 

                        A by-law of the City of Ottawa to authorize a franchise agreement between the City of Ottawa and Enbridge Gas Company Ltd. 

 

            WHEREAS City Council wishes to enter into the attached franchise agreement with Enbridge Gas Company Ltd.;

 

                        AND WHEREAS the Ontario Energy Board by its Order issued pursuant to the Municipal Franchise Act on this ________ day of  _______________ , 2006 has approved the terms and conditions upon which and the period for which the franchise provided for in the attached agreement is proposed to be granted, and has declared and directed that the assent of the municipal electors in respect of this by-law is not necessary;

 

                        THEREFORE the Council of the City of Ottawa enacts as follows:

 

1.                     The franchise agreement between the City and Enbridge Gas Company Ltd. attached as Schedule “A” to this by-law is hereby authorized and the franchise provided for therein is hereby granted.

 

2.                     The Clerk and the Mayor are hereby authorized on behalf of the City to enter into and execute under its corporate seal and deliver the aforesaid agreement, which agreement is hereby incorporated into and shall form part of this by-law.

 

3.                     The following by-laws of the old municipalities are hereby repealed:

(a)        By-Law No. 1641, passed by the Council of the Corporation of the County of Carleton on November 22, 1960;

(b)        By-Law No. 76-06, passed by the Council of the Corporation of the Township of Goulbourn on February 6, 1978;

(c)        By-Law No. 97-78, passed by the Council of the Corporation of the Township of Nepean on September 26, 1978;

(d)        By-Law No. 2308, passed by the Council of the Corporation of the Township of Cumberland on February 12, 1979;

(e)        By-Law No. 52-1980, passed by the Council of the Corporation of the Township of Osgoode on August 5, 1980;

(f)         By-Law No. 61/85, passed by the Council of the Corporation of the Township of Rideau on June 3, 1985;

(g)        By-Law No. 89-42, passed by the Council of the Corporation of the Village of Rockcliffe Park on December 13, 1989;

(h)        By-Law No. 8-98, passed by the Council of the Corporation of the City of Kanata on January 27, 1998;

(i)         By-Law No. 42 of 1988, passed by the Council of the Corporation of the Township of West Carleton on July 7, 1998; and

(j)         By-Law No. 31, passed by the Council of the Corporation of the City of Gloucester on September 14, 1999.

                       

4.                     This by-law includes Schedule “A” annexed hereto and Schedule “A” is hereby declared to form part of this by-law.

 

 

ENACTED AND PASSED this            day of                 , 2006.

 

 

 

 

 

                        CITY CLERK                                                 MAYOR

 


SCHEDULE “A”  (see Attachment 2)

 

 

 


 

BY-LAW NO. 2006 -

 

-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-

 

A by-law of the City of Ottawa to authorize a franchise agreement between the City of Ottawa and Enbridge Gas Company Ltd. 

 

-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-

 

Enacted by City Council at its meeting of

                  2006

 

-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-

 

LEGAL SERVICES

AMP -

 

COUNCIL AUTHORITY:

City Council

       

 

 

 


ATTACHMENT 2 – MODEL FRANCHISE AGREEMENT

 

Model Franchise Agreement

 

 

THIS AGREEMENT effective this          day  of                  , 20          .

 

BETWEEN: the City of Ottawa hereinafter called the

 

"City"

 

- and -

 

The Enbridge Gas Distribution Inc. hereinafter called the “Gas Company"

 

 

WHEREAS the Gas Company desires to distribute, store and transmit gas in the Municipality upon the terms and conditions of this Agreement;

 

AND WHEREAS by By-law  2006-    passed by the Council of the City (the "By-law"), the duly authorized officers have been authorized and directed to execute this Agreement on behalf of the City;

 

THEREFORE the City and the Gas Company agree as follows:

 

Part I - Definitions

 

1.      In this Agreement:

 

a.   "decommissioned" and "decommissions" when used in connection with parts of the gas system, mean any parts of the gas system taken out of active use and purged in accordance with the applicable CSA standards and in no way affects the use of the term 'abandoned' pipeline for the purposes of the Assessment Act;

 

b.   "Engineer/Road Superintendent" means the most senior individual employed by the City with responsibilities for highways within the Municipality or the person designated by such senior employee or such other person as may from time to time be designated by the Council of the City;

 

c.   "gas" means natural gas, manufactured gas, synthetic natural gas, liquefied petroleum gas or propane-air gas, or a mixture of any of them, but does not include a liquefied petroleum gas that is distributed by means other than a pipeline;

 

d.   “gas system" means such mains, plants, pipes, conduits, services, valves, regulators, curb boxes, stations, drips or such other equipment as the Gas Company may require or deem desirable for the distribution, storage and transmission of gas in or through the Municipality;

 

e.   "highway" means all common and public highways and shall include any bridge, viaduct or structure forming part of a highway, and any public square, road allowance or walkway and shall include not only the travelled portion of such highway, but also ditches, driveways, sidewalks, and sodded areas forming part of the road allowance now or at any time during the term hereof under the jurisdiction of the City;

 

f.    "Model Franchise Agreement" means the form of agreement which the Ontario Energy Board uses as a standard when considering applications under the Municipal Franchises Act. The Model Franchise Agreement may be changed from time to time by the Ontario Energy Board;

 

g.   "Municipality" means the territorial limits of the City on the date when this Agreement takes effect, and any territory which may thereafter be brought within the jurisdiction of the City;

 

h.   "Plan" means the plan described in Paragraph 5 of this Agreement required to be filed by the Gas Company with the Engineer/Road Superintendent prior to commencement of work on the gas system; and

 

i.    whenever the singular, masculine or feminine is used in this Agreement, it shall be considered as if the plural, feminine or masculine has been used where the context of the Agreement so requires.

 

Part II - Rights Granted

 

2.      To provide gas service:

 

The consent of the City is hereby given and granted to the Gas Company to distribute, store and transmit gas in and through the Municipality to the City and to the inhabitants of the Municipality.

 


3.      To Use Highways.

 

Subject to the terms and conditions of this Agreement the consent of the City is hereby given and granted to the Gas Company to enter upon all highways now or at any time hereafter under the jurisdiction of the City and to lay, construct, maintain, replace, remove, operate and repair a gas system for the distribution, storage and transmission of gas in and through the Municipality.

 

4.      Duration of Agreement and Renewal Procedures.

 

a.  If the City has not previously received gas distribution services, the rights hereby given and granted shall be for a term of 20 years from the date of final passing of the By-law.

 

or

 

b.  If the City has previously received gas distribution services, the rights hereby given and granted shall be for a term of 20 years from the date of final passing of the By-law provided that, if during the 20-year term this agreement, the Model Franchise Agreement is changed, then on the 7th anniversary and on the 14th anniversary of the date of the passing of the By-law, this Agreement shall be deemed to be amended to incorporate any changes in the Model Franchise Agreement in effect on such anniversary dates. Such deemed amendments shall not apply to alter the 20-year term.

 

c.  At any time within two years prior to the expiration of this Agreement, either party may give notice to the other that it desires to enter into negotiations for a renewed franchise upon such terms and conditions as may be agreed upon. Until such renewal has been settled, the terms and conditions of this Agreement shall continue, notwithstanding the expiration of this Agreement. This shall not preclude either party from applying to the Ontario Energy Board for a renewal of the Agreement pursuant to section 10 of the Municipal Franchises Act.

 

Part III - Conditions

 

5.      Approval of Construction

 

a.  The Gas Company shall not undertake any excavation, opening or work which will disturb or interfere with the surface of the travelled portion of any highway unless a permit therefor has first been obtained from the Engineer/Road Superintendent and all work done by the Gas Company shall be to his satisfaction.

 

       

b.   Prior to the commencement of work on the gas system, or any extensions or changes to it (except service laterals which do not interfere with municipal works in the highway), the Gas Company shall file with the Engineer/Road Superintendent a Plan, satisfactory to the Engineer/Road Superintendent, drawn to scale and of sufficient detail considering the complexity of the specific locations involved, showing the highways in which it proposes to lay its gas system and the particular parts thereof it proposes to occupy.

 

c.   The Plan filed by the Gas Company shall include geodetic information for a particular location:

 

i.   where circumstances are complex, in order to facilitate known projects, including projects which are reasonably anticipated by the Engineer/Road Superintendent, or

 

ii.  when requested, where the City has geodetic information for its own services and all others at the same location.

 

d.   The Engineer/Road Superintendent may require sections of the gas system to be laid at greater depth than required by the latest CSA standard for gas pipeline systems to facilitate known projects or to correct known highway deficiencies. 

 

e.   Prior to the commencement of work on the gas system, the Engineer/Road Superintendent must approve the location of the work as shown on the Plan filed by the Gas Company, the timing of the work and any terms and conditions relating to the installation of the work.

 

f.    In addition to the requirements of this Agreement, if the Gas Company proposes to affix any part of the gas system to a bridge, viaduct or other structure, if the Engineer/Road Superintendent approves this proposal, he may require the Gas Company to comply with special conditions or to enter into a separate agreement as a condition of the approval of this part of the construction of the gas system.

 

g.   Where the gas system may affect a municipal drain, the Gas Company shall also file a copy of the Plan with the City's Drainage Superintendent for purposes of the Drainage Act, or such other person designated by the City as responsible for the drain.

 

h.   The Gas Company shall not deviate from the approved location for any part of the gas system unless the prior  approval of the Engineer/Road Superintendent to do so is received.

 

i.   The Engineer/Road Superintendent's approval, where required throughout this Paragraph, shall not be unreasonably withheld.

 

j.   The approval of the Engineer/Road Superintendent is not a representation or warranty as to the state of repair of the highway or the suitability of the highway for the gas system.

 

6.      As Built Drawings

 

The Gas Company shall, within six months of completing the installation of any part of the gas system, provide two copies of "as built" drawings to the Engineer/Road Superintendent.  These drawings must be sufficient to accurately establish the location, depth (measurement between the top of the gas system and the ground surface at the time of installation) and distance of the gas system. The "as built" drawings shall be of the same quality as the Plan and, if the approved pre-construction plan included elevations that were geodetically referenced, the "as built" drawings shall similarly include elevations that are geodetically referenced. Upon the request of the Engineer/Road Superintendent, the Gas Company shall provide one copy of the drawings in an electronic format and one copy as a hard copy drawing.

 

7.      Emergencies

 

In the event of an emergency involving the gas system, the Gas Company shall proceed with the work required to deal with the emergency, and in any instance where prior approval of the Engineer/Road Superintendent is normally required for the work, the Gas Company shall use its best efforts to immediately notify the Engineer/Road Superintendent of the location and nature of the emergency and the work being done and, if it deems appropriate, notify the police force, fire or other emergency services having jurisdiction. The Gas Company shall provide the Engineer/Road Superintendent with at least one 24 hour emergency contact for the Gas Company and shall ensure the contacts are current.

 

8.      Restoration

 

The Gas Company shall well and sufficiently restore, to the reasonable satisfaction of the Engineer/Road Superintendent, all highways, municipal works or improvements which it may excavate or interfere with in the course of laying, constructing, repairing or removing its gas system, and shall make good any  settling or subsidence thereafter caused by such excavation or interference. If the Gas Company fails at any time to do any work required by this Paragraph within a reasonable period of time, the City may do or cause such work to be done and the Gas Company shall, on demand, pay the City's reasonably incurred costs, as certified by the Engineer/Road Superintendent. 

 

9.         Indemnification

 

The Gas Company shall, at all times, indemnify and save harmless the City from and against all claims, including costs related thereto, for all damages or injuries including death to any person or persons and for damage to any property, arising out of the Gas Company operating, constructing, and maintaining its gas system in the Municipality, or utilizing its gas system for the carriage of gas owned by others. Provided that the Gas Company shall not be required to indemnify or save harmless the City from and against claims, including costs related thereto, which it may incur by reason of damages or injuries including death to any person or persons and for damage to any property, resulting from the negligence or wrongful act of the City, its servants, agents or employees.

 

10.    Insurance

 

a.   The Gas Company shall maintain Comprehensive General Liability Insurance in sufficient amount and description as shall protect the Gas Company and the City from claims for which the Gas Company is obliged to indemnify the City under Paragraph 9. The insurance policy shall identify the City as an additional named insured, but only with respect to the operation of the named insured (the Gas Company). The insurance policy shall not lapse or be cancelled without sixty (60) days' prior written notice to the City by the Gas Company.

 

b.   The issuance of an insurance policy as provided in this Paragraph shall not be construed as relieving the Gas Company of liability not covered by such insurance or in excess of the policy limits of such insurance.

 

c.   Upon request by the City, the Gas Company shall confirm that premiums for such insurance have been paid and that such insurance is in full force and effect.

 


11.    Alternative Easement

 

The City agrees, in the event of the proposed sale or closing of any highway or any part of a highway where there is a gas line in existence, to give the Gas Company reasonable notice of such proposed sale or closing and, if is feasible, to provide the Gas Company with easements over that part of the highway proposed to be sold or closed sufficient to allow the Gas Company to preserve any part of the gas system in its then existing location. In the event that such easements cannot be provided, the City and the Gas Company shall share the cost of relocating or altering the gas system to facilitate continuity of gas service, as provided for in Paragraph 12 of this Agreement.

 

12.    Pipeline Relocation

 

a.   If in the course of constructing, reconstructing, changing, altering or improving any highway or any municipal works, the City deems that it is necessary to take up, remove or change the location of any part of the gas system, the Gas Company shall, upon notice to do so, remove and/or relocate within a reasonable period of time such part of the gas system to a location approved by the Engineer/Road Superintendent.

 

b.   Where any part of the gas system relocated in accordance with this Paragraph is located on a bridge, viaduct or structure, the Gas Company shall alter or relocate that part of the gas system at its sole expense.

 

c.   Where any part of the gas system relocated in accordance with this Paragraph is located other than on a bridge, viaduct or structure, the costs of relocation shall be shared between the City and the Gas Company on the basis of the total relocation costs, excluding the value of any upgrading of the gas system, and deducting any contribution paid to the Gas Company by others in respect to such relocation; and for these purposes, the total relocation costs shall be the aggregate of the following:

 

i.    the amount paid to Gas Company employees up to and including field supervisors for the hours worked on the project plus the current cost of fringe benefits for these employees,

 

ii.   the amount paid for rental equipment while in use on the project and an amount, charged at the unit rate, for Gas Company equipment while in use on the project,

 

iii.  the amount paid by the Gas Company to contractors for work related to the project,

 

iv.  the cost to the Gas Company for materials used in connection with the project, and

 

v.   a reasonable amount for project engineering and project administrative costs which shall be 22.5% of the aggregate of the amounts determined in items (i), (ii), (iii) and (iv) above.

 

d.   The total relocation costs as calculated above shall be paid 35% by the City and 65% by the Gas Company, except where the part of the gas system required to be moved is located in an unassumed road or in an unopened road allowance and the City has not approved its location, in which case the Gas Company shall pay 100% of the relocation costs.

 

Part IV - Procedural And Other Matters

 

13.    Municipal By-laws of General Application

 

The Agreement is subject to the provisions of all regulating statutes and all municipal by-laws of general application, except by-laws, which have the effect of amending this Agreement.

 

14.    Giving Notice

 

Notices may be delivered to, sent by facsimile or mailed by prepaid registered post to the Gas Company at its head office or to the authorized officers of the City at its municipal offices, as the case may be.

 

15.    Disposition of Gas System

 

a. If the Gas Company decommissions part of its gas system affixed to a bridge, viaduct or structure, the Gas Company shall, at its sole expense, remove the part of its gas system affixed to the bridge, viaduct or structure.

 

b. If the Gas Company decommissions any other part of its gas system, it shall have the right, but is not required, to remove that part of its gas system. It may exercise its right to remove the decommissioned parts of its gas system by giving notice of its intention to do so by filing a Plan as required by Paragraph 5 of this Agreement for approval by the Engineer/Road Superintendent. If the Gas Company does not remove the part of the gas system it has decommissioned and the City requires the removal of all or any part of the decommissioned gas system for the purpose of altering or improving a highway or in order to facilitate the construction of utility or other works in any highway, the City may remove and dispose of so much of the decommissioned gas system as the City may require for such purposes and neither party shall have recourse against the other for any loss, cost, expense or damage occasioned thereby. If the Gas Company has not removed the part of the gas system it has decommissioned and the City requires the removal of all or any part of the decommissioned gas system for the purpose of altering or improving a highway or in order to facilitate the construction of utility or other works in a highway, the Gas Company may elect to relocate the decommissioned gas system and in that event Paragraph 12 applies to the cost of relocation.

 

16.       Use of Decommissioned Gas System

 

a.   The Gas Company shall provide promptly to the City, to the extent such information is known:

 

i.    the names and addresses of all third parties who use decommissioned parts of the gas system for purposes other than the transmission or distribution of gas; and

 

ii.   the location of all proposed and existing decommissioned parts of the gas system used for purposes other than the transmission or distribution of gas.

 

b.   The Gas Company may allow a third party to use a decommissioned part of the gas system for purposes other than the transmission or distribution of gas and may charge a fee for that third party use, provided

 

i.    the third party has entered into a municipal access agreement with the City; and

 

ii.   the Gas Company does not charge a fee for the  third party's right of access to the highways.

 

c.   Decommissioned parts of the gas system used for purposes other than the transmission or distribution of gas are not subject to the provisions of this Agreement.  For decommissioned parts of the gas system used for purposes other than the transmission and distribution of gas, issues such as relocation costs will be governed by the relevant municipal access agreement.

 

17.    Franchise Handbook

 

The Parties acknowledge that operating decisions sometimes require a greater level of detail than that which is appropriately included in this Agreement. The Parties agree to look for guidance on such matters to the Franchise Handbook prepared by the Association of Municipalities of Ontario and the gas utility companies, as may be amended from time to time.

 

18.    Agreement Binding Parties

 

This Agreement shall extend to, benefit and bind the parties thereto, their successors and assigns, respectively.

 

IN WITNESS WHEREOF the parties have executed this Agreement effective from the date written above.

 

 

THE CITY OF OTTAWA

 

 

                                    By: ___________________________________________

 

                                                Duly Authorized Officer

 

 

THE CONSUMERS’ GAS COMPANY LTD.

 

 

                                    By: ___________________________________________


DATED this                day of                                      , 2006        .   

 

 

 

The City of Ottawa

 

 

-         and    -

 

 

Enbridge Gas Distribution Inc.

 

 

 

FRANCHISE AGREEMENT

 

 

 

 

 

 

 

THE Enbridge Gas Distribution Inc.

500 Consumers Road

North York, Ontario

M2J 1P8

 

Attention:  Regulatory Affairs Department


ATTACHMENT 3 – FEDERATION OF CANADIAN MUNICIPALITIES RIGHT-OF-WAY MANAGEMENT PRINCIPLES

 

The following Right-of-Way Management Principles were developed through the Federation of Canadian Municipalities.  These principles were adopted by Council in 2001.

 

  1. In pursuance of bona fide purposes, municipal governments must have the ability to manage the occupancy and uses of rights-of-way, including the establishment of the number, type, and location of facilities, while taking into account applicable technical restraints.

 

  1. Municipal governments must recover all costs associated with occupancy and use of the rights-of-way by other parties.

 

  1. Municipal governments must not be responsible for the costs of relocating facilities situated along municipal rights-of-way if relocations is for bona fide municipal purposes.

 

  1. Municipal governments must not be liable for losses associated with the disruption of services or with damage to property as a result of usual municipal activities of other parties along municipal rights-of-way.

 

  1. Recognizing that rights-of-ways have value, municipal governments must receive full compensation for the occupancy and use of municipal rights-of-way by other parties.