2006-07-24 Regular Meeting and Workshop Meeting

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1. The "Annual Franchise Fee," for the period beginning on the Effective Date and continuing through June 30, 2007 (the "Initial Franchise Period"), shall be $901,742.96. 2. The Annual Franchise Fee for each succeeding twelve-month period (each a "Franchise Year"), including the Franchise Year beginning July 1, 2007, shall be adjusted by multiplying $1,265,908.39 by the Annual Adjustment Factor. The "Annual Adjustment Factor" for any given year shall be a fraction, the numerator of which shall be the kWh delivered by Company within the Franchise Area (inclusive of street lighting) in the previous calendar year and the denominator of which shall be the kWh delivered by Company within the Franchise Area (inclusive ot street lighting) in 2005, said amount being 405,673,951 kWh. (Example: The Annual Franchise Fee tor the Franchise Year beginning July 1, 2010 = $1,265,908.39 x 2009 kWh/405,673,951. In no case, however, shall the Annual Franchise Fee be less than $1,265,908.39, except as provided in (1), above, for the initial Annual Franchise Fee Period. In calculating the amount to be paid each year, Company shall offset its Annual Franch In calculating the amount to be paid each year, Company shall offset its Annual Franchise Fee payments with the amount of the Municipal Account Franchise Credits and Municipal Franchise Fee Credits provided in Company's tariffs and applicable to City in the prior calendar year. The Annual Franchise Fee shall be payable in equal monthly installments due the first day ot each calendar month. Company shall calculate the new franchise tee to be payable for each Franchise Year beginning July 1st and shall provide the same along with the basis tor such calculation to City tor its review no later than April 1 st of each year. It Company does not receive an objection trom City by May 31st, Company shall implement the adjusted Annual Franchise Fee payment on July 1 st. If the additional thirty (30) year term of this Franchise provided tor in Section 4, above, ends on any day other than the last day ot the last Franchise Year, then the Annual Franchise Fee for the tinal Franchise Year shall first be calculated pursuant to this Section 11 and then pro rated accordingly. Section 12. The parties agree that the franchise payments due under this Franchise are reasonable and necessary and that the parties shall use their best efforts to enable Company to recover these payments through its electric rates. Section 13. Except as provided in Section 15, the Annual Franchise Fee payable hereunder shall be the total compensation payable by Company to City tor Company's use ot the Public Rights-ot-Way for the conduct of its business under the Franchise. City shall not charge any additional license, charge, fee, street or alley rental, or other character of charge or levy for the use or occupancy of the Public Rights-ot-Way in City, or any pole tax or inspection tee tax. It City does charge Company any additional license, charge, tee, street or alley rental, or other character of charge or levy, then Company may deduct the amount charged from the next succeeding franchise payment or payments until tully reimbursed. The Franchise shall constitute a permit to perform all work on Company's System within the Public Rights- ot-Way and to park vehicles in the Streets and other Public Rights-ot-Way when HOU03:1055752.7