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Electric Franchise Ordinances
Legislation affecting the restructuring of the electric utility industry has begun in other states and is anticipated in
the state of Michigan within the next several years. Electrical restructuring will permit customers to purchase their
power from third-party providers for delivery through the local utility’s system. The Michigan constitution and
current statutes raise two specific issues which may be impacted by the new legislation:
1)
Is the public utility required to secure the consent of the governmental body for use of its right-of-way?
2)
Is the public utility required to obtain a franchise from the governmental body in order to transact business
within its jurisdiction?
The applicable constitutional and statutory provisions which have provided the basis for local governance of public
utility providers include the following:
Michigan Constitution of 1963
art 7, sec. 25
art 7, sec. 29
MCL 460.501 et seq; MSA 22.141 et seq.
(1929 PA 69 “Act 69”)
MCL 247.183; MSA 9.263
A recent Michigan Court of Appeals case which has interpreted the provisions cited above with respect to
restructuring is Detroit Edison Company v Michigan Public Service Commission, No. 187387 (1998). The court of
appeals, relying upon art 7, sec. 29 and Act 69 (MCL 460.501 et seq; MSA 22.141 et seq.) held that a third-party
provider is a public utility required to obtain a franchise from the local governmental body if it intends to use the
highways, streets, alleys or other public places, or if it seeks to transact a local business within the governing body.
Courts have held that the power to regulate utility rates and services is reserved to the legislature which power has
been delegated to the Public Service Commission. (Detroit Edison v PSC).
The two attached sample electric franchise ordinances address the issues of use of the governmental right-of-way
and transaction of business. Draftors of electric franchise ordinances must carefully consider what issues are
significant to any particular municipality. Consideration should be given to the following factors and conditions:
1)
2)
3)
4)
5)
6)
7)
April, 2002
type of franchise, i.e., right-of-way use
and/or transaction of business
term
revocability
most favored nation clause
terms of service to customer
price information
requirement to provide regular
performance reports
8)
9)
10)
11)
12)
13)
14)
15)
16)
customer service information
characteristics of fuel and emissions
avoidance of duplicate electric service lines
public safety
aesthetics
fees
non-exclusivity of franchise
location of facilities within right-of-way
maintenance of facilities
Michigan Municipal League, PO Box 1487, Ann Arbor, MI 48106-1487
Phone 734-662-3246; Fax 734-663-4496; Email info@mml.org
Page 1 of 11
Sample Electric Franchise Ordinance
No. 1
An ordinance granting to the right, power and authority to market and/or supply electricity and electrical
services to customers within the city/village of
through and over existing and/or future
electrical transmission lines and equipment owned and operated by an authorized public utility and located
within the corporate limits of the city/village of
for a period of years; to charge for such
electricity and electrical services; and to hold the city/village harmless from all claims arising from the
granting of said franchise and the operations of the franchise thereunder.
SECTION NUMBER 1. GRANT.
(A)
The city/village of
(“Grantor”) hereby grants to
, its
successors and assigns (“Grantee”) the right, power and authority to market and/or supply
electricity and electrical services to customers within the city/village of
through
and over existing and/or future electrical transmission lines and equipment owned and operated by
an authorized public utility under a franchise with the Grantor and located within the corporate
limits of the city/village, and to do local electrical business as an electrical power marketer and
third-party supplier of electricity in the city/village.
(B)
The Grantor further grants to the Grantee the right, power and authority to construct and/or
maintain electrical equipment in the following circumstances where such construction is necessary
to connect the Grantee’s customers to facilities owned and operated by an authorized public utility
under a franchise with the Grantor and located within the corporate limits of the city/village.
SECTION 2. TERM.
This franchise shall be for a term of
council.
years; subject, however, to revocation of the term of the
SECTION 3. CONSIDERATION.
In consideration of the rights, powers and authority granted, the Grantee shall faithfully perform all things
required by this franchise.
SECTION 4. CONDITIONS.
As an electric power marketer and third-party supplier of electricity and electrical services, the Grantee
will not impair, obstruct or attempt to control any street, alley, bridge, highway, waterway or other public
place. The Grantee shall at all times utilize the existing transmission lines and equipment owned and
operated by an authorized public utility under a franchise with the Grantor, the terms and conditions of
which as may be applicable are incorporated by reference, except as otherwise provided in section 1 (B).
SECTION 5. HOLD HARMLESS.
The Grantee shall at all times keep and save the Grantor free and harmless from all loss, costs and expense
to which it may be subject by reason of the operations of the Grantee. In case any action is commenced
against the Grantor on account of the permission granted, the Grantee shall, upon notice, defend the
Grantor and save it free and harmless from all loss, cost and damage arising out of such negligent
construction and maintenance.
SECTION 6. FRANCHISE NOT EXCLUSIVE.
The rights, power and authority granted by this franchise are not exclusive.
April, 2002
Michigan Municipal League, PO Box 1487, Ann Arbor, MI 48106-1487
Phone 734-662-3246; Fax 734-663-4496; Email info@mml.org
Page 2 of 11
SECTION 7. FRANCHISE FEE.
The Grantee shall pay to the Grantor a franchise fee in the amount of $
be paid to the Grantor within 30 days from the adoption of this ordinance.
. The franchise fee shall
SECTION 8. RATES.
The Grantee shall be entitled to charge the inhabitants of the city/village for electricity furnished therein at
the rate approved by Grantee and its customer(s) and as may be approved by the Michigan Public Service
Commission, to the extent such Commission or its successors has the authority and jurisdiction to fix and
regulate electric rates and rules regulating such service in the city/village. Such rates and rules shall be
subject to review and change at any time upon petition therefor being made by either the Grantor, acting
by its council/board, or by the Grantee.
SECTION 9. RIGHTS OF THE GRANTOR.
The franchise shall be subject to the right of the Grantor:
(1)
To require proper and adequate extension of plant and service maintenance at the highest practical
standard of efficiency;
(2)
To establish reasonable standards of service and quality of products and prevent unjust
discrimination in service or rates;
(3)
To require service in accordance with the terms of the franchise throughout the entire period;
(4)
To impose such other regulations as may be determined by the council/board to be conducive to
the safety, welfare, and accommodation of the public;
(5)
To require the Grantee to permit joint use of its property and appurtenances located in the streets,
alleys, and public places of the city/village by the Grantor and other utilities insofar as such joint
use may be reasonably practicable and upon payment of reasonable rental; provided, that, in the
absence of agreement, upon application by the Grantee, the council/board shall provide for
arbitration of the terms and conditions of such joint use and the compensation to be paid therefor.
The rights of the Grantor shall not be exercised or construed in a manner which conflicts with the express
terms and conditions of this franchise nor with the rules and regulations set forth by the Michigan Public
Service Commission governing the provision of electric service by Grantee.
SECTION 10. VACATION OF RIGHTS-OF-WAY AND RELOCATION OF FACILITIES.
The Grantor has the right to vacate any public right-of-way within the Grantor as well as any right to use
same possessed by the Grantee, and/or the Grantor may require the Grantee to relocate its lines and
facilities at Grantee’s expense when such vacation and/or relocation is made necessary to secure the public
health and welfare or is otherwise required by the Grantor in the exercise of a governmental function.
SECTION 11. REVOCATION.
The franchise granted by this ordinance is subject to revocation at will by the Grantor.
SECTION 12. JURISDICTION.
The Grantee shall be and remain subject to all ordinances, rules and regulations of the Grantor now in
effect or which might subsequently be adopted for the regulation of land uses or for the protection of the
health, safety and general welfare of the public; provided, however, that nothing shall be construed as a
waiver by the Grantee of any or its existing or future rights under state or federal law or a limitation upon
the existing or future powers of the Grantor pursuant to its charter or state or federal law.
April, 2002
Michigan Municipal League, PO Box 1487, Ann Arbor, MI 48106-1487
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Page 3 of 11
SECTION 13. MICHIGAN PUBLIC SERVICE COMMISSION
(A)
Jurisdiction. The Grantee shall, as to all other conditions and elements of service not fixed, be
subject to the reasonable rules and regulations of the Michigan Public Service Commission or its
successors, applicable to electric service in the city/village, to the extent such Commission (or its
successors) has such jurisdiction.
(B)
Filing. The Grantee shall provide the Grantor such copies of all documents which the Grantee
sends to the Michigan Public Service Commission and copies of all orders, decisions or
correspondence the Grantee receives from the Michigan Public Service Commission. The Grantee
shall permit the Grantor to inspect and examine all records the Grantee is required to maintain or
file under the rules and regulations of the Michigan Public Service Commission, relating to service
under this ordinance.
SECTION 14. UNDERGROUND RELOCATION.
If the Grantee has its facilities on aboveground utility poles and the owner of said poles relocates its
facilities to an underground conduit, the Grantee shall relocate its facilities in the same underground
conduit.
SECTION 15. EFFECTIVE DATE.
This ordinance shall take effect on
. It shall, however, cease and be of no effect unless and
until 30 days after adoption the Grantee shall file its written acceptance with the clerk. Upon acceptance
and publication, this ordinance shall constitute a contract between the Grantor and the Grantee.
Clerk
April, 2002
Michigan Municipal League, PO Box 1487, Ann Arbor, MI 48106-1487
Phone 734-662-3246; Fax 734-663-4496; Email info@mml.org
Page 4 of 11
Sample Electric Franchise Ordinance
No. 2
An Ordinance, granting a non-exclusive franchise to use local public ways and transact local electrical
business in the city/village of
.
ORDINANCE NO.
THE PEOPLE OF THE CITY/VILLAGE OF
Section 1.
April, 2002
DO ORDAIN:
Grant of Non-Exclusive Right
A.
Term. City/Village of
(Grantor) grants to its successors and assigns (Grantee), subject
to the terms and conditions set forth below, the non-exclusive right, power and authority to use
electric lines consisting of towers, masts, poles, cross-arms, guys, braces, feeders, transmissions
and distribution wires, transformers and other electrical appliances (hereinafter "Electric System")
that are owned either by
or by any other electric utility which has the necessary
authority from the Michigan Public Service Commission and a valid franchise from Grantor,
which Electric System exists on, along, across and under the highways, streets, alleys and bridges
of the Grantor (hereinafter "P ublic Ways") and to do local electric business in the city/village of
,
County, Michigan, for a period of
years.
B.
Expansion of System. After first obtaining approval from Grantor of the route and placement of
the Electric System components, which approval shall not be unreasonably withheld, Grantee may
expand its use of the Public Ways by constructing and maintaining its own towers, masts, poles,
cross-arms, guys, braces, feeders, transmission and distribution wires, transformers and other
electric appliances. Any expansion of the Electric System by the Grantee as approved by the
Grantor shall be subject to all terms and conditions of this Ordinance, including the requirements
of paragraph 3L related to the expansion of the Electric System.
C.
Location in Public Ways. To the maximum extent possible, Grantee shall place its Electric
System on, within and along existing utility facilities in the Public Ways.
D.
Lease. Grantee shall not lease or sublease any portion of its Electric System within the city/village
to a person who by law is required to obtain the city’s/village’s permission or consent to
transaction of business in the Grantor and who lacks such permission or consent. Grantee shall not
allow the property of a third party or non-electric system wires or any other facilities to be
overlashed, affixed or attached to any portion of its Electric System or allow other actions with a
similar result without the written consent of the chief executive officer or that person's designee.
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Page 5 of 11
Section 2.
A.
In consideration of the rights, power and authority granted by the Grantor, Grantee shall faithfully
perform all duties required by the terms of this Ordinance.
B.
In further consideration of the rights, power and authority granted by the Grantor, Grantee agrees:
1) to pay to the Grantor a non-refundable application fee in the amount of $
; and
2) to compensate the Grantor: (a) for the amount of its actual expenses incurred by the Grantor in
the drafting and preparation of this Ordinance, including reasonable actual attorney fees, and
(b) for the amount of its actual expenses resulting from the process of adopting this ordinance.
Grantee's total obligation to compensate the City for its actual expenses under this paragraph B
shall not exceed $
.
C.
In the event that Grantee, or any company which is a subsidiary, affiliate or other related company
to Grantee, pays a fee, charge or other payment of any kind on a periodic basis (such as monthly,
quarterly, annually) to any municipality in the State of Michigan as a condition, or in
consideration for the right to transact a local utility business in that municipality, Grantee shall
notify the Grantor, in writing, of the details of the fee or periodic charge within sixty (60) days of
the effective date of the fee or periodic charge, at which time the franchise granted by this
Ordinance shall be automatically revoked. Any new franchise granted by the Grantor to Grantee
shall require payment of a similar fee or periodic charge as a condition of the new franchise.
D.
Grantee agrees to abide by any future ordinance(s) of the Grantor, if and when formally adopted,
which may require the payment by Grantee of a fee, charge or other payment on a periodic basis
(such as monthly, quarterly, annually), provided that any such future ordinance(s) apply equally to
all electric franchise holders, including
. The Grantor shall notify Grantee within sixty
(60) days of the formal adoption of such an ordinance by the Grantor, at which time the franchise
granted by this Ordinance shall be automatically revoked. Any new franchise granted by the
Grantor to Grantee shall be subject to the provisions of such future ordinance(s), and shall require
payment of a similar fee or periodic charge as a condition of the new franchise.
Section 3.
April, 2002
Consideration; Costs; Right-of-Way Fees.
Use of Public Rights -of-Way by Grantee
A.
No Burden on Public Ways. Grantee and its contractors, subcontractors and the Grantee's
Electric System shall not unduly burden or interfere with the present or future use of any of the
Public Ways within the city/village. Grantee shall erect and maintain its Electric System so as to
cause minimum interference with the use of the Public Ways and with the rights or reasonable
convenience of property owners. No Public Way shall be obstructed longer than necessary during
the work of construction or repair to the Electric System. Grantee's cable, wires, structures and
equipment shall be suspended or buried so as to not endanger or injure persons or property in the
Public Ways. If the Grantor in its reasonable judgment determines that any portion of the Electric
System constitutes an undue burden or interference, Grantee at its expense shall modify its
Electric System or take such other actions as the Grantor may determine is in the public interest to
remove or alleviate the burden, and the Grantee shall do so within the time period established by
the Grantor.
B.
Restoration of Public Ways. Grantee and its contractors and subcontractors shall immediately
restore, at Grantee's sole cost and expense and in a manner approved by the Grantor, any portion
of the Public Ways that is in any way disturbed, damaged, or injured by the construction,
operation, maintenance or removal of the Electric System to as good or better condition than that
which existed prior to the disturbance. In the event that Grantee, its contractor or subcontractors
fail to make such repair within the time specified by the Grantor, the Grantor shall be entitled to
complete the repair and Grantee shall pay the costs of the Grantor for such repair.
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Page 6 of 11
C.
Easements. Any easements over or under private property necessary for the construction or
operation of the Electric System shall be arranged and paid for by Grantee. Any use or intrusion
on private property without an easement or other instrument evidencing permission of the property
owner shall constitute a trespass by Grantee and a violation of this Ordinance. Any easements over
or under property owned by the Grantor other than the Public Ways shall be separately negotiated
with the Grantor.
D.
Tree Trimming. Grantee may trim trees upon and overhanging the Public Ways so as to prevent
the branches of such trees from coming into contact with the Electric System. Grantee shall
minimize the trimming of trees to trimming only those that are essential to maintain the integrity
of its Electric System. No trimming shall be done in the Public Ways without previously
informing the Grantor.
E.
Pavement Cut Coordination/Additional Fees. Grantee shall coordinate its construction program
and all other work in the Public Ways with the Grantor's program for street construction,
rebuilding, resurfacing and repair (collectively, “Street Resurfacing”). Grantee shall meet with the
official of the Grantor primarily responsible for the Public Ways at least two times per year to this
end.
The goals of such coordination shall be to require Grantee to conduct all known work in the Public
Ways in conjunction with or immediately prior to any Street Resurfacing planned by the Grantor,
and to prevent the Public Ways from being disturbed by Grantee for a period of years after such
Street Resurfacing.
In addition to any other fees or payments required by this Ordinance, Grantee shall pay to the
Grantor the sum of $
for each
feet cut into or excavation of any Public
Way, or portion thereof which was subject to Street Resurfacing within eighteen (18) months prior
to such cut or excavation. This fee is in addition to and not in lieu of the obligation to restore the
Public Ways and is in addition to all other fees required by this ordinance or any other ordinances
of the Grantor.
April, 2002
F.
Marking. Grantee shall mark its Electric System as follows: Aerial portions of the Electric
System shall be marked with a marker on its lines on alternate poles which shall state Grantee’s
name and provide a toll-free number to call for assistance. Direct buried underground portions of
the Electric System shall have (1) a conducting wire placed in the ground at least several inches
above the Grantee’s cable or wire (if such cable or wire is non-conductive), (2) at least several
inches above that a continuous colored tape with Grantee’s name and a toll-free number and a
statement to the effect that there is buried cable beneath, and (3) stakes or other appropriate
aboveground markers with Grantee's name and a toll-free number and indicating that there is
buried cable below.
G.
Compliance with Laws. Grantee shall comply with all laws, statutes, ordinances, rules and
regulations regarding the installation, construction, ownership or use of its Electric System
whether federal, state or local, now in force or which hereafter may be promulgated (including,
without limitation, any ordinance requiring the installation of additional conduit when Grantee
installs underground conduit for its Electric System). Before any installation is commenced,
Grantee shall secure all necessary permits, licenses and approvals from all appropriate
departments, agencies, boards or commissions of the Grantor or other governmental entity as may
be required by law, including, without limitation, all utility line permits and highway permits.
Grantee shall comply in all respects with applicable codes and industry standards, including but
not limited to the National Electrical Safety Code (latest edition) and the National Electric Code
(latest edition). Grantee shall comply with all zoning and land use ordinances and historic
preservation ordinances as may exist or may hereafter be amended.
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Page 7 of 11
H.
Street Vacation. If the Grantor vacates or consents to the vacation of a street or alley within its
jurisdiction, and such vacation necessitates the removal and relocation of Grantee's facilities in the
vacated Public Way, Grantee agrees, as a condition of this Ordinance, to consent to the vacation
and to move its facilities at its sole cost and expense when asked to do so by the Grantor or a court
of competent jurisdiction. Grantee shall relocate its facilities to such alternative route as the
Grantor, acting reasonably and in good faith, shall designate.
I.
Relocation. If the Grantor requests Grantee to relocate, protect, support, disconnect, or remove its
facilities because of street or utility work, Grantee shall relocate, protect, support, disconnect, or
remove its facilities, at its sole expense, to such alternate route as Grantor, acting reasonably and
in good faith, shall designate.
J.
Public Emergency. The Grantor shall have the right to sever, disrupt, dig up or otherwise destroy
facilities of Grantee, without any prior notice, if such action is deemed necessary because of a
public emergency. Public emergency shall be any condition which, in the opinion of any of the
officials named, poses an immediate threat to the lives or property of the citizens of the Grantor,
caused by any natural or man-made disaster, including, but not limited to, storms, floods, fire,
accidents, explosions, major water main breaks, hazardous material spills, etc. Grantee shall be
responsible for repair at its sole expense of any of its facilities damaged pursuant to any such
action taken by the Grantor.
K.
Miss Dig. If eligible to join, Grantee shall subscribe to and be a member of "MISS DIG", the
association of utilities formed pursuant to 1974 PA 53, as amended (MCL 460.701. et seq.) and
shall conduct its business in conformance with the statutory provisions and regulations
promulgated thereunder.
L.
Use of Existing Facilities; Compensation to Grantor. Grantee shall utilize existing poles,
conduits, and other facilities wherever practicable, and shall not construct or install any new,
different, or additional poles, or other facilities unless expressly authorized by the Grantor. Where
existing utility wiring is located underground, either at the time of initial construction or
subsequent thereto, Grantee's Electric System shall also be located underground unless otherwise
expressly authorized by the Grantor. In the event Grantee desires to utilize existing poles, conduits
or other facilities owned by the Grantor, Grantee shall be obligated to pay the existing standard
charge for attachment to, placement in, or other use of those facilities.
To the extent that Grantee chooses to construct its own utility wiring or other new facilities,
Grantee agrees to compensate the Grantor for use of the public rights-of-way. Unless otherwise
agreed by the Grantor and Grantee, the compensation shall be paid at the same rate per lineal foot
of wiring or other facilities installed as that rate which is charged to telecommunications providers
under the then current Grantor ordinance regulating telecommunications systems.
April, 2002
M.
Underground Relocation. If Grantee has its facilities on
or any other public
utility company’s aboveground utility poles and the owner of said poles relocates its facilities to
an underground conduit, Grantee shall relocate its facilities underground in the same location.
N.
Pole/Conduit License Agreement; Notification. If Grantee forfeits or otherwise loses its rights
under a pole/conduit license agreement with
or other entity, then Grantee shall notify
the chief executive officer in writing within 10 days.
O.
Employee Identification. All personnel of Grantee or its contractors or subcontractors who have
as part of their normal duties contact with the general public shall wear on their clothing a clearly
visible identification card bearing their name and photograph. Grantee shall account for all
identification cards at all times. Every service vehicle of Grantee, its contractors or subcontractors
shall be clearly identified as such to the public.
Michigan Municipal League, PO Box 1487, Ann Arbor, MI 48106-1487
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Page 8 of 11
Section 4.
No Grantor Liability; Indemnification.
A.
Grantor Not Liable. The Grantor, and its agents, employees, and contractors, shall not be liable
to Grantee or Grantee's customers for any interference with or disruption in the operation of
Grantee's Electric System, or the provision of service over or through the Electric System, or for
any damages arising out of Grantee's use of the Public Ways.
B.
Indemnification. As part of the consideration for this Ordinance, Grantee shall defend,
indemnify, protect and hold harmless Grantor, its officers, agents, employees, departments,
boards, and commissions from any and all claims, losses, liabilities, causes of action, demands,
judgments, decrees, proceedings, and reasonable expenses of any nature (including, without
limitation, actual fees and expenses of attorneys, expert witnesses and consultants), arising out of
or resulting from the acts or omissions of Grantee, its officers, agents, employees, contractors,
successors, or assigns, but only to the extent of the fault of the Grantee, its officers, agents,
employees, contractors, successors, or assigns.
C.
Assumption of Risk. Grantee undertakes and assumes for its officers, agents, contractors and
subcontractors and employees, all risk of dangerous conditions, if any, on or about any Grantorowned or controlled property, including Public Ways, and Grantee hereby agrees to indemnify and
hold harmless the Grantor against and from any claim asserted or liability imposed upon the
Grantor for personal injury or property damage to any person arising out of the installation,
operation, maintenance or condition of the electric system or Grantee's failure to comply with any
federal, state or local statute, ordinance or regulation.
D.
Notice, Cooperation and Expenses. The Grantor shall give Grantee prompt notice of the making
of any claim or the commence of any actions suit or other proceeding covered by the provisions of
this Section.
Nothing herein shall be deemed to prevent the Grantor from cooperating with Grantee and
participating in the defense of any litigation by Grantor's own counsel.
Grantee shall pay all expenses incurred by Grantor in defending itself with regard to any such
actions, suits or proceedings. These expenses shall include all out-of-pocket expenses such as
attorney fees and shall also include the reasonable value of any services rendered by or on behalf
of the Grantor’s attorney, and the actual expenses of Grantor's agents, employees or expert
witnesses, and disbursements and liability assumed by Grantor in connection with such suits,
actions or proceedings.
Section 5.
Insurance.
Grantee shall, at the time of ownership or construction of any systems, equipment, lines, and/or
buildings independent of its use of the existing
transmission and distribution system,
obtain and maintain in full force and effect, for the entire effective period of this Ordinance, the
following insurance covering all insurable risks associated with its ownership and use of its
Electric System:
April, 2002
(a)
A comprehensive general liability insurance policy, including Completed
Operations Liability, Independent Contractors Liability, Contractual Liability
coverage and coverage for property damage from perils of explosion, collapse or
damage to underground utilities, commonly known as XCU coverage, in an
amount not less than Five Million Dollars ($5,000,000.00).
(b)
An Automobile Liability Insurance Policy to cover any vehicles used in
connection with its activities under this Ordinance, in an amount not less than
Two Million Dollars ($2,000,000.00).
Michigan Municipal League, PO Box 1487, Ann Arbor, MI 48106-1487
Phone 734-662-3246; Fax 734-663-4496; Email info@mml.org
Page 9 of 11
(c)
Workers' Compensation and Employer's Liability Insurance with statutory limits.
The Grantor shall be named as an additional insured in all applicable policies. All
insurance policies shall provide that they shall not be canceled or modified unless
thirty (30) days prior written notice is given to the Grantor. Grantee shall provide
the Grantor with a certificate of insurance evidencing such coverage as a
condition of this Ordinance and shall maintain on file with the Grantor a current
certificate. All insurance shall be issued by insurance carriers licensed to do
business by the State of Michigan or by surplus line carriers on the Michigan
Insurance Commission approved list of companies qualified to do business in
Michigan. All insurance and surplus line carriers shall be rated A+ or better by
A.M. Best Company.
Each policy which is to be endorsed to add the Grantor as an additional insured hereunder, shall
contain cross-liability wording, as follows:
In the event of a claim being made hereunder by one insured for
which another insured is or may be liable, then this policy shall
cover such insured against whom a claim is or may be made in
the same manner as if separate policies had been issued to each
insured hereunder.
If the insurance policies required by this Section are written with deductibles, the deductibles shall
be approved in advance by the Grantor. Grantee agrees to indemnify and hold harmless the
Grantor from and against the payment of any deductible and from the payment of any premium on
any insurance policy required to be furnished by this Ordinance.
Grantee shall require that its contractors and subcontractors working in Public Ways carry, in full
force and effect, workers' compensation, comprehensive public liability and automobile liability
insurance coverages of the type which Grantee is required to obtain under the terms of this Section
with appropriate limits of insurance.
Section 6.
Franchise Not Exclusive
The rights, power and authority granted herein are not exclusive.
Section 7.
Rates
Grantee shall be entitled to charge the inhabitants of the Grantor for electricity furnished at the
rates approved by the Michigan Public Service Commission, which body, or its successors, have
authority and jurisdiction to fix and regulate electrical rates and promulgate rules regulating such
service in the City/Village. Such rates and rules shall be subject to review and changed any time
upon petition being made by either the Grantor acting through the council/board or by Grantee.
Section 8.
Revocation
The franchise granted by this Ordinance is subject to revocation at the will of the council/board
upon sixty (60) days’ written notice to the Grantee.
April, 2002
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Page 10 of 11
Section 9.
Jurisdiction
Grantee shall be and remain subject to all Ordinances, rules and regulations of the Grantor now in
effect or which might subsequently be adopted for the regulation of land uses or for the protection
of the health, safety and general welfare of the public; provided, however, that nothing herein shall
be construed as a waiver by grantee of any of its existing or future rights under Michigan or
federal law or a limitation upon the existing or future powers of the Grantor pursuant to its charter
or Michigan or federal laws.
Section 10.
Michigan Public Service Commission
A.
Jurisdiction. Grantee shall, as to all other conditions and elements of service not
addressed or fixed by this Ordinance, remain subject to the rules and regulations
applicable to electric service by the Michigan Public Service Commission, or its successor
bodies.
B.
Filing. Grantee shall provide the Grantor with copies of all documents which Grantee
sends to the Michigan Public Service Commission and copies of all orders, decisions, or
correspondence Grantee receives from the Public Service Commission. Grantee shall
permit Grantor inspection and examination of all records it is required to maintain or file
under Michigan Public Service Commission rules and regulations.
Section 11.
Effective Date.
This Ordinance shall take effect sixty (60) days after adoption by the council/board and shall
continue in effect for a period of five (5) years thereafter, subject to revocation at the will of the
Grantor at any time during said five (5) year period; provided, however, it shall cease and be of no
effect unless and until within fifteen (15) days after adoption the Grantee shall file its written
acceptance of the same with the clerk, and pay to the Grantor the sum required by Section 2B
hereof.
Clerk
April, 2002
Michigan Municipal League, PO Box 1487, Ann Arbor, MI 48106-1487
Phone 734-662-3246; Fax 734-663-4496; Email info@mml.org
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