Title
Resolution Directing the City Administrator to Negotiate a New Natural Gas Franchise
Memorandum
While researching the City's opportunities related to beneficial electrification, limiting new natural gas connections, and achieving the A2ZERO goal of community-wide carbon neutrality by 2030, City staff reviewed the City's natural gas franchise (Ann Arbor City Code, Chapter 34) and noted that it is set to expire in 2027. Under Michigan law, a franchise is a contract between a local unit of government and a utility that: (i) governs the use of the public rights of way, and (ii) sets the conditions under which the company may, for a set period, provide the specified utility service. Franchises can also include additional terms and several local governments across the country (e.g., Chicago, Salt Lake City, and San Diego) have successfully advanced affordability, equity, and clean energy goals via franchise negotiations while optimizing use of the public rights of way.
Given the City's aggressive and time sensitive A2ZERO goals, the community's desire for more resilient, reliable, and affordable energy, and the need to accomplish these ends in a legally prudent manner, staff request Council authorization to begin negotiations immediately with the goal of bringing a new franchise aligned with A2ZERO and best practices regarding the use of the City's rights of way, back to Council as soon as possible.
Budget/Fiscal Impact: Budget currently exists within the Office of Sustainability and Innovations to fund legal support services to advance this work.
Staff
Prepared by: Missy Stults, Sustainability and Innovations Director
Reviewed by: Atleen Kaur, City Attorney
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, In 1997 the City of Ann Arbor granted a non-exclusive franchise to Michigan Consolidated Gas Company, a subsidiary of DTE, to supply and sell natural gas within the City of Ann Arbor for a period of 30 years;
Whereas, This fran...
Click here for full text