HomeMy WebLinkAbout1273 Laclede Gas Company - Franchise Natural Gas Distribribution Plant Bill No. 2013 -094 Ordinance No. /.:? 7 3
AN ORDINANCE GRANTING TO LACLEDE GAS COMPANY, MISSOURI GAS ENERGY
DIVISION, A MISSOURI CORPORATION, OPERATING A GAS DISTRIBUTION SYSTEM
IN THE CITY OF RIVERSIDE, MISSOURI, ITS SUCCESSORS OR ASSIGNS, A
FRANCHISE TO OPERATE A NATURAL GAS DISTRIBUTION PLANT AND SYSTEM IN
SAID CITY AND RELATING THERETO.
BE IT ORDAINED BY THE BOARD OF ALDERMEN OF THE CITY OF
RIVERSIDE, MISSOURI.
Section 1. That there is hereby granted to Laclede Gas Company, Missouri Gas Energy
division, a Missouri Corporation operating a gas distribution system, herein called the Company,
its successors and assigns, the rights, privileges and franchise for a period of twenty (20) years
from the effective date hereof, to construct, maintain and operate in the present and future streets,
alleys, bridges and public places in the City of Riverside, Missouri, herein called City, its gas
distribution system as now located, together with the right, privilege and franchise to acquire,
construct, maintain and operate therein and thereon such additions and extensions thereto as may
be necessary or desirable, all for the purpose of supplying natural gas for all purposes to the
inhabitants of said City and consumers in the vicinity thereof, which grant shall be subject to all
lawful ordinances of the City now in existence or hereafter enacted which are not inconsistent
herewith. Provided, further, that Company shall, upon acceptance of this franchise, be obligated
to remove, relocate or adjust as promptly as is practical any of its gas distribution facilities
located in or upon the City's streets, alleys, bridges or other public places at no expense to the
City when reasonably requested to do so by the City. Such requests made by the City shall be
deemed reasonable unless shown to be otherwise by the Company.
Section 2. All rates established and charges made by Company for gas transported,
distributed and sold hereunder shall be subject to valid and lawful orders of the Public Service
Commission of the State of Missouri, and other competent authority having jurisdiction in the
premises, and the transportation, distribution and sale of gas to consumers shall be governed by
the present operating rules, regulations and customs of Company and such rules and regulations
as may hereafter be prescribed or approved.
Section 3. That in consideration of and as compensation for the right, privilege and
franchise hereby granted, the Company, its successors and assigns, shall furnish gas at such
pressure and of such quality as shall be designated by lawful orders of the Public Service
Commission of said State, if such gas is reasonably procurable; shall furnish to each consumer a
recognized standard meter or other instrument for measurement of gas sold or computation of
consumer's bills and keep same in repair at its cost, which meter shall at all times be subject to
inspection by said City; shall limit all excavations of streets, alleys or public places to the
necessity of efficient operation and shall not at any one time open or encumber more of any
highway or public place than shall be reasonably necessary to enable Company to proceed with
advantage in laying or repairing mains or pipes and shall not permit such highway or public place
to remain open longer than necessary for the purpose for which it was opened; shall refill all
excavations and replace all pavements with like material and leave same in as good condition as
when altered or removed; shall perform all work on streets, alleys and public places, under
supervision of a representative of said City, if so desired; and shall repay said City all expense to
which it has been put in the repair or replacement of streets, highways or pavements in the event
such work is done by said City after the neglect or unreasonable refusal of Company to perform
same in a reasonable time.
Section 4. All mains, pipes and services which shall be laid or installed under this
franchise shall be so located and laid as to not obstruct or interfere with any water pipes, drains,
sewers, or other structures already installed; and Company shall, in working in connection with
such mains, pipes and services, avoid, so far as may be practicable, interfering with the use of
any street, alley, or public thoroughfare, it shall at its own expense and in a manner reasonably
satisfactory to the duly authorized representative of the City, replace such pavement or surface in
the manner provided by ordinance.
Section 5. Company shall, not later the last day of each calendar month in each year,
make a report to the governing board of the City of its gross receipts from the sale or
transportation of natural gas within the corporate limits of said City for the one month period
preceding that on which the report is due; and at the time of making such reports, shall pay into
the City treasury a sum equal to fifteen percent (15 %) of gross receipts of the Company derived
from the transportation of natural gas to customers within the City and a sum equal to five (5 %)
percent of the Company's gross receipts derived from the sale of natural gas to customers within
the City; subsequent to the effective date of this franchise, which shall be charged to the
operating expenses of the Company. So long as Company shall be required, by any regulatory
authority having jurisdiction, to separately state the franchise tax increment of its charges for
natural gas service rendered under the franchise hereby granted, the term "gross receipts" as used
herein shall include the separately stated tax increment. Said percentage of Company's gross
receipts is hereby levied and assessed as an occupation and license tax (in lieu of all other
occupation, license or other revenue taxes or fees) for the privilege of engaging in the business
herein recited during the term hereof; and as a further consideration for this franchise, Company
agrees to recognize the same as a valid tax and make said payments during such periods.
Section 6. If a majority of the Board of Aldermen express their assent to the granting of
said franchise, said franchise shall become effective immediately, provided that the Company
shall file its written acceptance of said franchise within thirty (30) days from the date said
governing body shall have declared the result said vote.
PASSED THIS D- DAY OF • , 2014.
/ / • lL/
AYOR
CITY CLERK e
APPROVED.THIS 7 DAY O, 2014. /
n YOR
MGE MISSOURI GAS ENERGY
3420 Broadway • Kansas City, MO • 64111 -2404 • (816) 360 -5755
ROBERT J. HACK
CHIEF OPERATING OFFICER
August 9, 2013
Via Certified Mail
Return Receipt Requested
City Clerk
City of Riverside, Missouri
2950 NW Vivian Road
Riverside, Missouri 64150
Re: Franchise Agreement that expires 8/2/2013 between City of Riverside,
Missouri and Missouri Gas Energy, a division of Southern Union Company
(the `Agreement')
Dear Sir /Madam:
Southern Union Company ( "SUG') has entered into a Purchase and Sale
Agreement (the "Purchase Agreement") with Laclede Gas Company ( "Laclede') under
which it will sell its Missouri Gas Energy division's gas distribution business assets to
Laclede. As part of the Purchase Agreement, SUG, doing business in Missouri as
Missouri Gas Energy, will assign to Laclede all of its rights, duties, and obligations
under certain contractual arrangements, including its municipal franchise agreements.
The Missouri Public Service Commission approved Laclede's purchase of the MGE
assets on July 17 2013. I have attached the Commission's order for your reference.
This letter is to advise you that SUG will assign all of its rights and obligations
under the Agreement to Laclede upon Closing of the transaction, which is expected to
occur on or after September 1, 2013. The same terms, conditions, and effective dates
will continue in the Agreement — only the name of your natural gas provider will change.
Laclede has provided valuable, reliable gas service to Missouri customers since
1857. Laclede is a subsidiary of the Laclede Group, Inc., a public utility holding
company registered on the New York Stock Exchange. Laclede is the largest natural
gas distribution utility in Missouri, serving more than 632,000 residential, commercial,
and industrial customers in St. Louis and surrounding counties of eastern Missouri.
With the acquisition of SUG's Missouri Gas Energy assets, Laclede will serve over
1,100,000 natural gas customers in Missouri. Laclede's management team is
committed to providing reliable and efficient service to its new customers. While
rebranding discussions are underway, Laclede will continue to do business in your
municipality for the near future as "Missouri Gas Energy."
MGE= MISSOURI GAS ENERGY
August 9, 2013
Page 2
The assignment of the Agreement will be to "Laclede Gas Company, a Missouri
Corporation, 720 Olive Street, St. Louis, MO 63101." We request your signed
acknowledgment and a duly passed ordinance returned no later than October 15,
2013 with an effective date of September 1, 2013. Please send these documents to:
Laclede Gas Company
ATTN: Legal Department
720 Olive Street
St. Louis, MO 63101
Thank you for your assistance. Should you have any questions, please contact
Todd Jacobs, Senior Director — Legal at 816- 360 -5976 or todd.lacobs (MGE)
or David Abernathy, Vice President and Associate General Counsel, at 314 - 342 -0536 or
dabernathy Iacledegas.com (Laclede).
Sincerely,
SOUTHERN UNION COMPANY
Robert J. Hack
Chief Operating Officer
Missouri Gas Energy
THE UNDERSIGNED HEREBY ACKNOWLEDGES THE ASSIGNMENT OF THE
AGREEMENT TO LACLEDE GAS COMPANY EFFECTIVE AT CLOSING OF THE
PURCHASE AGREEMENT:
[Party Name]
By: [Y tit teQ
4
Name: X2 A /e e n. / n s -e,
Title: 714ye
Date: C,V. 7, 20/0
STATE OF MISSOURI
PUBLIC SERVICE COMMISSION
At a session of the Public Service
Commission held at its office in
Jefferson City on the 17 day of
July, 2013.
In the Matter of the Joint Application of Southern )
Union Company d /b /a Missouri Gas Energy, )
The Laclede Group, Inc., and Laclede Gas )
Company for an Order Authorizing the Sale, ) File No. GM 2013 - 0254
Transfer, and Assignment of Certain Assets and )
Liabilities from Southern Union Company to )
Laclede Gas Company and, in Connection )
Therewith, Certain other Related Transactions )
ORDER APPROVING UNANIMOUS STIPULATION AND AGREEMENT
Issue Date: July 17, 2013 Effective Date: July 31, 2013
On July 2, 2013, Southern Union Company d /b /a Missouri Gas Energy, the Laclede
Group, Laclede Gas Company, the Staff of the Commission, the Office of the Public
Counsel, City of Kansas City, IBEW Local Union No. 53, Midwest Gas Users' Association,
and Missouri Department of Natural Resources filed a stipulation and agreement to resolve
all issues connected with the proposed sale of the Missouri Gas Energy natural gas system
to Laclede. Two parties - United Steelworkers District 11, AFL -CIO and Kansas City Power
& Light Company / KCP &L Greater Missouri Operations Company - did not initially join in
the stipulation and agreement. Subsequently, on July 9, United Steelworkers District 11
filed a notice indicating it was joining in the stipulation and agreement. Kansas City Power
& Light / KCP &L Greater Missouri Operations Company did not oppose the stipulation and
agreement within seven days of its filing and therefore, pursuant to Commission Rule 4
CSR 240.2.115(2), the Commission will treat the stipulation and agreement as unanimous.
The Commission conducted an on- the - record proceeding regarding the stipulation
and agreement on July 10, 2013. At that proceeding, the Commission questioned the
parties about the terms of the stipulation and agreement and gathered additional
information about the Transaction and the conditions set forth in the stipulation and
agreement.
The stipulation and agreement sets forth numerous conditions on the sale of the
Missouri Gas Energy assets to Laclede Gas Company. Among those agreed upon
conditions are a rate moratorium whereby Laclede Gas Company agrees not to file a
general rate case for its Laclede Gas service territory prior to October 1, 2015, unless there
is a significant unusual event that has a major impact on any of its Missouri service
territories. Laclede Gas Company will be allowed to file a general rate case for its Missouri
Gas Energy service territory no later than September 18, 2013. The stipulation and
agreement also provides that any acquisition premium paid for Missouri Gas Energy in
connection with the Transaction shall not be recovered in retail distribution rates. The
stipulation and agreement contains additional conditions designed to protect customers
from any adverse credit and capital cost impacts resulting from the Transaction; conditions
designed to protect the quality of service provided to customers; and numerous other
conditions that set out how the Transaction will occur and that will protect customers and
the public from any adverse impact from the Transaction.
The stipulation and agreement also asks the Commission to approve Laclede Gas
Company's plan to finance its purchase of the Missouri Gas Energy system from Southern
2
Union Company. In accordance with Section 393.200 RSMo, the Commission finds that
the money, property or labor to be procured or paid for by Laclede Gas Company through
the issuance and sale of debt and equity is reasonably required and necessary for the
purposes described in the stipulation and agreement and will be used therefore and that
such purposes are not in whole or in part reasonably chargeable to operating expenses or
to income.
After reviewing the stipulation and agreement, the Commission independently finds
and concludes that such stipulation and agreement is in the public interest and should be
approved.
THE COMMISSION ORDERS THAT:
1. The Stipulation and Agreement filed on July 2, 2013, is approved as a
resolution of the issues addressed in that stipulation and agreement. The signatory parties
are ordered to comply with the terms of the stipulation and agreement. A copy of the
stipulation and agreement is attached to this order, and is incorporated herein by reference.
2. Southern Union Company d /b /a Missouri Gas Energy and Laclede Gas
Company are authorized to perform in accordance with the terms of the Purchase and Sale
Agreement.
3. The sale, transfer, and assignment of certain assets of Southern Union
Company to Laclede Gas Company, as more fully described in the Purchase and Sale
Agreement, is authorized, with a closing date effective as of September 1, 2013, subject to
the provisions of the Purchase and Sale Agreement and Southern Union Company's
unilateral right to waive the condition of simultaneous closing of the transaction with
3
Laclede Gas Company and the sale of its New England Gas Company assets to Plaza
Massachusetts Corp.
4. Laclede Gas Company is granted a certificate of convenience and necessity
to provide natural gas service as a gas corporation and public utility, subject to the
jurisdiction of the Commission in the service areas presently served by Missouri Gas
Energy as a division of Southern Union Company. In connection therewith, the
requirements of Commission rule 4 CSR 240.3.205 are waived.
5. Laclede Gas Company is authorized to provide natural gas service in the
areas served by Missouri Gas Energy, as a division of Southern Union Company, in
accordance with the rules, regulations, rates and tariffs of Missouri Gas Energy as may be
on file with and approved by the Commission on the effective date of the closing of the
transaction, including the tariff sheets reflecting the existing base rates, ISRS rates, and
purchase gas adjustment of Missouri Gas Energy. Laclede Gas Company is authorized to
adopt said tariff sheets, and to operate under them as they may be changed from time to
time as provided by law.
6. Laclede Gas Company is authorized to adopt Southern Union Company's
authorized depreciation rates for the involved assets.
7. Laclede Gas Company is authorized to raise up to and including $1.02 billion,
at any time beginning July 31, 2013 and ending one year after the closing of the
Transaction, by issuing common or preferred stock, receiving paid -in capital, and issuing
long -term indebtedness, including debt evidenced by First Mortgage Bonds, by using the
Laclede Gas Company assets and the Missouri Gas Energy assets acquired from Southern
Union Company as security as may be necessary in connection with the financing of the
4
transaction contemplated by the Purchase and Sale Agreement and the Joint Application or
as may be necessary in accordance with the terms and conditions of any of Laclede Gas
Company's financing instruments and to execute, enter into, deliver and perform in
accordance with all necessary agreements, notes, and other documents as are necessary
to issue the debt.
8. Southern Union Company is authorized to transfer to Laclede Gas Company,
and Laclede Gas Company is authorized to acquire and record on its books and records
the current levels of certain assets and liabilities of Southern Union Company related to the
Missouri Gas Energy assets.
9. Laclede Gas Company is authorized to account for Missouri Gas Energy's
pension benefit costs on a basis consistent with Missouri Gas Energy's currently approved
methodology as established in Missouri Gas Energy File No. GR- 2009 -0355 stipulation and
agreement to use FAS 87 calculations for regulatory purposes that do not reflect the impact
of purchase accounting and that the prepaid pension asset receives similar treatment as
the prepaid asset under Missouri Gas Energy's approved methodology.
10. Laclede Gas Company is authorized to account for the MGE gas employees
and retirees post- retirement welfare benefit cost on a basis consistent with the
methodology used by Southern Union Company immediately prior to the sale. The
Commission finds that the FAS 106 calculations do not reflect the impact of purchase
accounting.
11. Southern Union Company, effective upon the closing of the transaction, is
authorized to terminate its responsibilities as a gas corporation in Missouri subject to the
jurisdiction of the Commission.
5
12. Southern Union Company and Laclede Gas Company are authorized to enter
into, execute and perform in accordance with the terms of all other documents which may
be reasonably necessary and incidental to the performance of the Transaction which is the
subject of the Purchase and Sale Agreement and the Joint Application,
13. The parties are granted such other relief as may be deemed necessary to
accomplish the purposes of the Purchase and Sale Agreement and the Joint Application,
as amended, and to consummate the sale, transfer and assignment of the assets and
related transactions pursuant to the Purchase and Sale Agreement.
14. Laclede Gas Company shall submit to the Commission within sixty (60) days
of closing the transaction a listing and description of all items that Laclede Gas Company
exercised under the authority in paragraph 13 above.
15. All prefiled testimony is admitted into the record.
16. This order shall become effective on July 31, 2013.
BY THE COMMISSION
1 vd1).e �`.w,�� d>
Morris L. Woodruff
Secretary
R. Kenney, Chm., Jarrett, Stoll, and
W. Kenney, CC., concur.
Woodruff, Chief Regulatory Law Judge
6
This Acceptance of Ordinance received
and filed this S u day of
2014.
' City Clerk
City of Riverside, Missouri
ACCEPTANCE OF ORDINANCE
STATE OF MISSOURI )
ss.
COUNTY OF JACKSON )
KNOW ALL MEN BY THESE PRESENTS, That Laclede Gas Company, a corporation
organized and existing under the laws of the State of Missouri and Grantee named in Ordinance
No. 1273 of the Ordinances of the City of Riverside, Missouri, the same being entitled:
"AN ORDINANCE granting to Laclede Gas Company, Missouri Gas Energy
division, a Missouri corporation, operating a gas distribution system in the City of
Riverside, Missouri, its successors or assigns, a franchise to operate a natural gas
distribution plant and system in said City and relating thereto."
hereby accepts the terms and conditions of said Ordinance and the franchise granted.
IN WITNESS WHEREOF, Laclede Gas Company has caused this instrument to be
signed by its Field Operations Vice President and attested this 118 V day of August, 2014.
LACLEDE GAS COMPANY
ATTEST: By
41
teven K.t1olcbmb
Field Operations Vice President
Printed Name int k). deozi
STATE OF MISSOURI )
ss.
COUNTY OF JACKSON )
BE IT REMEMBERED, that on this �� day of August, 2014, before me, the
undersigned, a Notary Public, came Steven K. Holcomb, Field Operations Vice President of
Laclede Gas Company, a corporation duly organized, incorporated and existing under and by
virtue of the laws of the State of Missouri, who is personally known to me to be such officer, and
who is personally known to me to be the same person who executed as such officer the above
and foregoing instrument of writing on behalf of said corporation, and he duly acknowledged the
execution of the same to be the act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notary seal
the day and year last above written.
Notary Public
YPU'•,
My Commission Expires: !.., LINDA LLANE
MPE
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