Title
An Ordinance to Amend Chapter 34 (Gas Franchise) and Replace it with a New Heating Franchise And Adopt Accompanying Agreement Regarding Climate Action (ORD-25-10)
Memorandum
In 2023, City Council unanimously adopted Resolution R-23-101 Directing the City Administrator to Negotiate a New Natural Gas Franchise. As noted in that resolution, "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, Council authorized staff to begin negotiations 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.
Attached as an Ordinance is the negotiated new Franchise. In addition to the Franchise, the City and DTE have negotiated an Agreement Regarding Climate Action (ARCA) which includes regular creation of a 2-year work plan outlining the specific actions DTE and the City will take to advance the goals outlined in the ARCA and Franchise. Staff are a...
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