The Natural Gas Franchise Agreement with Sierra Pacific Power Company dba NV Energy, which authorizes NV Energy to construct and maintain a system for natural gas distribution in the City's right-of-way, was initially approved by City Council on April 24, 2006. The Agreement provides for a ten-year term and for two five-year extensions. Pursuant to the terms of the Agreement, the extensions may be exercised at NV Energy's discretion upon written notice from NV Energy to the City two years prior to the expiration of the Agreement. Currently, the Agreement is set to expire April 23, 2021. The City received timely notice from NV Energy requesting extension of the Agreement.

The City collects a five percent (5%) franchise fee from NV Energy pusuant to the Agreement. This is the maximum fee allowed pursuant to NRS 354.59883. In fiscal year 2019, the City received $1,151,339 in natural gas franchise fees.

Attached to this report is the request for the extension from Douglas Brooks, Senior Attorney for NV Energy. Also attached is the Natural Gas Franchise Agreement approved on April 24, 2006.

City staff from various departments were contacted and no amendments to the Agreement were suggested. The franchise fee is at the maximum allowed by Nevada law. Staff recommends that the five-year extension for the Natural Gas Franchise Agreement be approved.

1. City Council may approve the extension as outlined.

2. City Council may direct the City Manager to negotiate a different Franchise Agreement.

I move to approve a five-year extension of the Natural Gas Franchise Agreement (A-3356) with Sierra Pacific Power Company dba NV Energy Natural Gas.