CITY OF KENAI. ALASKA
ORDINANCE NO. 18
(9-20-61)
(Amended 11-8-61)
AN ORDINANCE GRANTING A
FRANCHISE TO THE KEN A I
POWER CORPORATION, ITS
SUCCESSORS AND ASSIGNS,
TO OPERATE AND MAINTAIN
AN ELECTRIC UTILITY SYS
TEM IN THE CITY: AND SET
TING FORTH THE TERMS
THEREOF.
BE IT ORDAINED BY THE
COUNCIL OF THE CITY OF
KENAI, ALASKA:
Section 1. Short Title. This
Ordinance shall be known anti may
be cited as the “Kenai Power
Corporation Franchise Ordin
ance."
'Section 2. Definitions. For the
purpose of this Ordinance, the
following terms, phrases, words
and their deriviations shall have
the meaning given herein. When
not inconsistent with the context,
words used in the present tense
include the future, words in the
plural number include the singu
lar number, and words in the sin
gular number include the plural
number. The word "shall" is al
ways mandatory and not merely
uiret:w>ry,
(]) “City” is the City of Ke
imi, Alaska.
(2) ‘MDompany” is the Kenai
Power Corporation, an Alaskan
corporation, grantee of rights un
der this franchise.
(3) “Council” is the Council of
the City of Kenai, Alaska.
(4) “System” is the electrical
utility properties of the company
used and useful in connection
with the generation and distri
bution of electrical energy.
(5) “Streets” shall include
streets, sidewalks, alleys and oth
er public thorofares and places
in t-lie City.
Section 3. Grant of Authority.
The City does hereby grant to the
Company, its successors and as
signs, the right, privilege and
franchise to construct, acquire,
own, operate, and maintain a sys
tem for the distribution and sale
of electric energy for any lawful
purpose, and for these purposes
grantee shall have the right, pri
vilege and franchise to erect,
maintain, operate, use and re
place a distribution system of
poles, steel lattice towers, un
derground conduits, wire and
necessary appurtenances' for the
transmission and distribution of
electric current under and upon
the streets of the City,
(1) Non-Exclusive Grant. Noth
iny herein shall be construed as
granting an exclusive privilege
for the use of any street, or any
part thereof; provided that the
grantee of similar rights and
privileges shall not in the exer
cise of the same unreasonably in
terfere with the exercise of the
rights and privileges granted
Sterein.
kz) exclusive jnrancmse. to
the extent now permitted by law,
this franchise shall be and is ex
clusive, for the aforesaid pur
poses, and a franchise for the
same purpose or purposes shall
not be granted to any other per
son, firm, corporation or entity;
provided, however, in the event of
the annexation to the City of
areas in which there is already lo
cated a public electrical utility
this franchise shall not be exclus
ive as to such areas which are
provided electric service by said
other utility. (Provided, further,
the above shall not be construed
as prohibiting the Homer Elec
tric Association from continuing
to furnish service to its present
customers.
(3) City Not to Compete. In
consideration of Company under
takings hereunder, the City ag
rees not to engage in the business
of distributing and selling elec
trical energy during the term of
this franchise in competition with
the Company, its. successors or
assigns.
Section 4. Compliance with Ap
plicable Laws and Ordinances.
(1) The Company shall at all
times during the term of this
franchise be subject to all lawful
exercise of the police power of
the City.
(2) The terms of this franchise
are hereby subjected to all valid
enactments of the Legislature of
Alaska and of any properly ereat
ed or empowered Public Service
Commission of the State.
Section 5. Company Liability
Indemnification. The Company
shall save the City harmless from
all loss sustained by the City on
account of any suit, judgment,
execution, claim, or demand
whatsoever, resulting from negli
gence on the part of the Com
pany, its officers, agents, ser
vants and employees, in the con
struction, operation or mainten
ance of its electrical system in
the City, and operations appur
tenant thereto. The Company
shall maintain public liability in
surance for bodily injury in the
amount of $100.000/$500,000 and
property damage insurance in
the amount of $250,000, contain
ing such deductible amounts as
may be approved by the City.
Section 6. Service 'Standards
and Controls. The Company ag
rees to provide and maintain its
entire plant and system in such
condition that it will furnish safe
and adequate service, and agrees
to construct and perform replace
ments and conduct operations in
compliance with the National El
ectric Safety Code of the U. S.
Bureau of Standards.
(1) Repairs, Notice of Inter
ruptions. Whenever it is neces
sary to shut off or interrupt ser
vice for the purpose of making
repairs or installations, the Com
pany will attempt to do so at
such reasonable times as will
cause the least amount of incon
venience to its patrons, and un
less such repairs are unforeseen
and immediately necessary, it
shall give reasonable notice there
of to the customers consistent
with safety to the Company per
sonnel.
(2) Restoration After Destruc
tion. In case the system of the
Company shall be partly or whol
ly destroyed or incapacitated, the
Company shall restore or repair
said system within the shortest
practicable time.
(3) Meter Accuracy. All elec
tric current shall be supplied
through meters which shall ac
curately measure the amount of
electricity supplied to any cus
tomer. An exception may be made
by the Company in the case of
electrical energy sold to the City
for street lights or to other us
ers, either for similar purposes or
under circumstances where the
load is so nearly constant as to
be reasonably measurable without
the expense of installing and
maintaining meters. The Com
pany shall at any time when re
quested by a consumer test the
accuracy of any meter. If upon
test it is found that such meter
overruns to the extent of 2% or
more, the Company shall pay the
cost of such test and shall refund
overcharges collected, or give cre
dit for overcharges billed, at the
rate found inaccurate, for the
last two billing periods or, if pos
sible to determine when the met
er became inaccurate, then from
that date. If the meter is found
to be inaccurate or slow or less
than 2% fast the customer shall
pay the reasonable cost of such
testing. A report giving the re
sult of each test shall be made to
the consumer. Any meter found
inaccurate upon test beyond a
tolerance of 1% shall not be re
turned to service until properly
adjusted.
(4) Fima Power. Electrical en
ergy, sold, supplies and delivered
under this franchise, shall be
maintained to vary not more than
an average, plus or minus, of five
percent (5%) at any Company
service drop, and such voltage as
shall be a safe and assured sup
ply for all customers. The Com
pany shall equip itself with com
.plete, standard measuring de
vices to maintain a continuous
reading of the voltage at the
point entering the distribution
system. A copy of these voltage
readings shall be filed monthly
with the City.
Section 7. Rules and Regula
tions of Company. The Company
shail establish reasonable rales
and regulations for the conduct
of the Company's business, with
reference to furnishing, supply
ing and selling electrical energy
to consumers within the City and
prescribing the forms of applica
tion and contracts to be executed,
by applicants before they are en»
titled to reeive electrical service
from the Company, Provided,
however, the Company shall first
file with the City Clerk, or other
designated City Official, a copy
of such rules, regulations and
other documents showing* rates,
terms and conditions shall not be
mendments thereof, adopted from
time to time for the conduct of
its business; and provide further
that such rules, regulations, rates,
terms and conditions sail not be
in conflict with the provisions
hereof or of the laws of the State
of Alaska and shall be subject to
the approval of the Public Serv
ice Commission or other regula
tory body of the State of Alaska
having jurisdiction in the premis
es.
It is understood that the Com
pany shall have the right and
power to require of every cus
tomer a contractual right to
access to and from any and all
customers’ properties during all
reasonable hours for the purpose
of testing, examining or inspect
ing exterior electrical connections
if and when the Company elects.
Section 8, Conditions of Street
Occupancy. All construction of
structures and replacements and
maintenance of structures and
replacements shall he performed
-in a safe and workmanlike man
ner and according to the minimum
standards or better of the afore
said Code.
(1) Locations Subject to City
Approval. When such construc
tion or replacement of poles, tow
ers or other facilities are located
in or upon any street, unless an
emergency exists, previous writ
ten notice of the location of such
construction or replacement shall
be given the City with reasonable
time to approve or reject the pro
posed construction or replacement
and its location. If the City does
not reject the proposal within
fourteen days it shall be deemed
to have been approved by the
City. If rejected within fourteen
days the City and Company shall
confer and an alternative method
shall be agreed upon. If no agree
ment on the reasonableness of the
plan for excavation can be
reached, the parties shall submit
the matter to arbitration,
(2) Undue Obstruction Prohib
ited. Unnecessary obstruction of
the use, and unnecessary delay
in restoring to unobstructed use,
of streets is prohibited.
(3) Restoration Required. With
in a reasonable time and as early
as practicable upon the comple
tion of any construction or repair
work, the Company shall restore
any street to as good or better
condition than existed previous
to its being disturbed by it or its
agents. The City and the Com
pany shall cooperate whenever
feasible by agreements resulting
in public betterments * by inter
change of services.
(4) Movement of Facilities.
Whenever in the judgment of the
Council the public interest re
quires a change in location of any
pole or tower, or aerial line, or
the change of an aerial line to an
underground line, the Company
upon request shall determine and
advise the Council of the overall
cost, whereupon the Council in
the case of feasible projects may
by Resolution require the Com
pany to effect such change, pro
vided that the rate base of the
Company is increased by the ac
tual cost of such improvement,
after allowance has been made
for the value of salvaged mater
ials and equipment.
Section 9. Preferences Prohib
ited. The Company shall not as
to rates, charges, service facilities,
rules, regulations, or in any other
respect make or grant any pref
erence or advttange to any pers
on, firm, corporation or other en
tity, nor subject any such person
firm, corporation or other entity
to any prejudice or disadvantage;
provided, however, nothing here
in contained shall be construed
to prohibit the establishment
from time to time of a graduated
scale of changes and classified
rate schedules to which any cus
tomer qualifying for such scale
' or classification shall be subject,
Section 10. Approval of Trans
fer, The Company shall not sell
or transfer it* system to another
-or transfer any rights under., this
Council shall approve such sale
or transfer. Approval of the
Council shall be withheld only
upon reasonable grounds, which
shall be stated to the Company.
It is understood that the Com
pany may either own or construct
its own plant or works for the
feneration of electrical energy
sold and distributed in its sys
tem hereunder, or it may cause
such construction by another
corporation from which it may
purchase the electrical energy so
sold and distributed, and this
generating plant and works may
be within or without the corpor
ate limits of the the City. Noth
ing herein contained shall be
construed to require consent for
or to prevent the Company from
including this franchise or any
of its property in any mortgage
or trust deed executed for the
purpose of obtaining money for
corporate objects or prevent any
transfer or sale of this franchise
or any Company property by
foreclosure of such mortgage,
deed or trust. No sale or transfer
shall be effective until the ven
dee, assignee or lessee has filed
in the office of the City Clerk an
instrument duly executed which
recites the facts of such sale,
assignment or lease and accepts
the terms of the franchise and
agrees to perform all the condi
tions thereof.
Section 11. City Rights in Fran
chise, The right is hereby re
served to the City to adopt from
time to time, in addition to the
.provisions herein contained and
contained in existing applicable
ordinances, such additional regu
lations as may be deemed neces
sary in the exercise of -its police
powers, provided, that such regu
lations, by ordinance or other
wise, shall be reasonable, and not
in conflict with the rights herein
granted, and shall not conflict
with the laws of the State of
Alaska.
(1) Supervision and Inspection.
The City reserves the right to
supervise all construction, instal
lation or repair work involving or
affecting public streets subject
to the provisions- of bills Ordin
ance and may make such inspec
tion as it deems necessary to in
sure compliance with the ordin
ances of the City and the rules and
regulations of any Public Ser
vice Commission or other regula
tory body of the State of Alas
ka. having jurisdiction in the
premises.
(2) For the purpose of regu
lation and control of rates for
service within the City, there is
hereby reserved the right of the
City to approve in advance maj
or capital improvements and pro
perty purchases or sales by the
!------—--—
Company as well as the plan for
financing the same, if the costs
associated with said improve
ments, purchases ami sales sub
stantially alter the base rate.
Section 12. Terms of Franchise
—Purchase by City on Expira
tion. The right, privileges and
franchise hereby granted to the
Company shall extend for a term
of twenty years from the effec
tive date hereof, unless sooner
surrendered by the Company, and
upon expiration or termination
thereof may be renewed, modifi
ed or extended as may then be
agreed between the City and the
Company and in the manner and
method then provided by law.
Upon the expiration, termination
or surrender of this franchise, the
Company shall have the right to
salvage all of its works, plant
and facilities after posting reas
onable bond satisfactory to the
City to insure the restoration of
City streets and alleys damaged
by such salvage operation.
Provided, (however, at the ter
mination of this franchise, the
City at its election and upon the
payment of the fair valuation
thereof may purchase and take
over to itself the system, works,
plant and other property of the
Company in the City and in its
entirety. In such event, the
Council may require upon ninety
days notice that the Company
submit a statement setting forth
the value of all its property used
under this franchise and stating
the sum which the Company is
willing to accept as the price
thereof upon sale to the City..
Provide further that the Com
pany shall not diseontiue the fur.
nishing of electrical energy to
the City by reason of surrender
of this franchise except upon one
year's notice to the City.
If the Council deems the price
stated by the Company to be un
duly high and disadvantageous,
it may require that the question
of fair valuation, including going
concern value, he referred to a
board of appraisers composed of
three professional engineers, each
of whom shall have had at least
five years experience in the de
sign, construction and operation
of electric utility systems in ci
ties ami in addition thereto five
years experience in the valuation
of public utility properties of eq
ual or greater magnitude than
that to be appraised, One of
said appraisers to he selected by
the City, one of the Company
and the two thus chosen to select
the third. The third appraiser
shall not be otherwise employed
by or connected directly or indi
rectly with the City or Company.
In case the two apg~isers chosen
(Continued on page seven)
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ARCHER’S
Opposite Post Office in Kenai
Grocery Store
Standard Oil Products
Propane Sold
Small and Large Tanks Filled
Be sure that YOU,
_ YOUR CHILDREN and
YOUR BABYSITTER know where
to call in case of FIRE
283-789©
If tune, close all doors and windows
before tovinejUurning Mains.