2019 2:00:00 PM

Monday, October 14, 2019 2:00 PM
Council Chambers, Legislative Bldg, 745 4th Street, Sparks, NV

Public Hearing and Action Items Unrelated to Planning and Zoning: 10.4

Title: PUBLIC HEARING, Consideration and possible approval of a five-year extension of the Sierra Pacific Power Company dba NV Energy Electrical System Franchise Agreement (A-3355).

Petitioner/Presenter: City Attorney Chet Adams/Assistant City Attorney Alyson McCormick

Recommendation: I recommend City Council approve the five-year extension of the NV Energy Electrical Franchise Agreement.

Financial Impact: N/A

Business Impact (Per NRS 237):
A Business Impact Statement is not required because this is not a rule.

Agenda Item Brief:

The City of Sparks and Sierra Pacific Power Company dba NV Energy negotiated an Electrical System Franchise Agreement that provided for a ten-year initial term and for two five-year extensions. The initial term expired and the first five-year extension of the Franchise Agreement was approved by Council, extending the Agreement until April 23, 2021. The City has received a written request from NV Energy to extend the Franchise Agreement for the second five-year term. Approval of this second five-year period would extend the Electrical Franchise Agreement until April 23, 2026.

The City of Sparks currently collects a five percent (5%) franchise fee from NV Energy, the maximum allowed by Nevada law. Staff recommends approval.

Background:

The Electrical System Franchise Agreement with Sierra Pacific Power Company dba NV Energy, which authorizes NV Energy to construct and maintain an electric services distribution system in the City's right-of-way, was initally approved by City Council on April 24, 2006. The Agreement provides for a ten-year term and 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 pursuant to the Agreement. This is the maximum fee allowed pursuant to NRS 354.59883. In fiscal year 2019, the City received $3,846,924 in electrical system franchise fees.

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

Analysis:

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

Alternatives:

1. City Council may approve the extension as outlined

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

Recommended Motion:

I move to approve the five-year extension of the Electrical System Franchise Agreement (A-3355) with Sierra Pacific Power Company dba NV Energy.

Attached Files:

03.15.19 - Letter from Douglas Brooks.pdf

Electrical System Franchise Agreement.pdf

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