Whenever in this ordinance the words or phrases hereinafter in this section defined are used, they shall have the respective meanings assigned to them in the following definitions (unless, in the given instance, the context wherein they are used shall clearly import a different meaning):

(a) The word "Franchisee" shall mean Southern California Gas Company, and its lawful successors or assigns;

(b) The word "City" shall mean the City of Rancho Palos Verdes, a municipal corporation of the State of California, in its present incorporated form or in any later reorganized, consolidated or reincorporated form;

(c) The word "streets" shall mean the public streets, ways, and alleys as the same now or may hereafter exist within said City;

(d) The word "Director" shall mean the Director of Public Works of the City;

(e) The word "franchise" shall mean and include any authorization granted hereunder in terms of a franchise, privilege, permit, license or otherwise to lay and use pipes and appurtenances for transmitting and distributing gas for any and all purposes under, along, across or upon the public streets, ways, and alleys in the City, and shall include and be in lieu of any existing or future City requirement to obtain a license or permit for the privilege of transacting and carrying on a business within the City or any additional territory hereinafter annexed by or consolidated with the City; provided that any such additional territory shall only be subject to one surviving franchise agreement as determined by the Los Angeles County Local Agency Formation Commission;

(f) The word "gas" shall mean only natural or manufactured gas, or a mixture of natural and manufactured gas;

(g) The phrase "pipes and appurtenances" shall mean pipe, pipeline, cable, main, service, trap, vent, vault, manhole, meter, gauge, regulator, valve, conduit, appliance, attachment, appurtenance and any other property located or to be located in, upon, along, across, under or over the streets of the City, and used or useful in, or in carrying on the business of, transmitting and distributing gas;

(h) The phrase "lay and use" shall mean to lay construct, erect, install, operate, maintain, use, repair, replace, or remove;

(i) The word “release” shall mean any discharge, active or passive migration, deposit, burial, emplacement, seepage, or disposal of a Contaminant into the environment originating from any Facility or from Franchisee's activities; and

(j) The word “Contaminant” shall mean any material, substance or constituent originating from Franchisee’s facilities or activities, whether solid, liquid, semisolid, or gaseous in nature, including any hazardous substance or waste, hazardous material, chemical compound, petroleum (or fraction thereof), or any hydrocarbon substance, pollutant or contaminant, as those terms are defined by any federal, state or local law, rule, regulation or order.

(k) The phrase “Applicable Law” shall mean all present or future federal, state, municipal, or local laws, rules, regulations, ordinances, codes, orders, permit requirements, judgments, injunctions, or decrees, or any judgment or order or decree by a court applicable to the Franchisee or any of Franchisee’s facilities or activities.


(a) By this ordinance, the City Council hereby grants to Franchisee the nonexclusive right, privilege and franchise, subject to each and all of the terms and conditions contained in this ordinance, and pursuant to the provisions of Division 3, Chapter 2 of the Public Utilities Code of the State of California, known as the Franchise Act of 1937, for the sole purpose of laying and using pipes and appurtenances to transmit and distribute gas for any and all purposes, under, along, across or upon the streets of the City or any additional territory hereinafter annexed by or consolidated with the City; provided that any such additional territory shall only be subject to one surviving franchise agreement as determined by the Los Angeles County Local Agency Formation Commission. The granting of this Franchise shall not prevent the City from granting any identical or similar franchise to any person or entity other than the Franchisee.

(b) The term or period of this franchise shall be for a period of twenty-five (25 years) from and after the effective date hereof in full force and effect until the same shall, with the consent of the Public Utilities Commission of the State of California, be voluntarily surrendered or abandoned by its possessor, or until the State of California or some municipal or public corporation thereunto duly authorized by law shall purchase by voluntary agreement or shall condemn and take under the power of eminent domain, all property actually used and useful in the exercise of this franchise, and situated within the territorial limits of the State, municipal or public corporation purchasing or condemning such property, or until this franchise shall be forfeited for noncompliance with its terms by the possessor thereof.

(c) In the event the Franchise Act of 1937 ("Franchise Act") is amended by the Legislature or interpreted by a final decision of the Supreme Court of the State of California in a manner that materially affects or materially changes the rights or obligations of the parties (both of which events are hereafter referred to as "Change in Law"), City or Franchisee shall meet to negotiate changes to this franchise which may be appropriate in view of such Change in Law. The parties agree to meet and to negotiate in good faith in a commercially reasonable manner.


(a) The Franchisee shall pay to the City at the times hereinafter specified, in lawful money of the United States, a sum annually which shall be equivalent to two percent (2%) of the gross annual receipts of Franchisee arising from the use, operation or possession of said franchise; provided, however, that such payment shall in no event be less than one percent (1%) of the gross annual receipts of the Franchisee derived from the sale of gas within the limits of the City under this franchise; and further provided, notwithstanding any other provision of this Agreement, that in the event the Legislature shall amend the Franchise Act of 1937 (Public Utilities Code Section 6201-6302) to permit a franchise payment greater or less than the percentage formula specified herein, the Franchise fee agreed upon herein shall be automatically changed to the amount allowed by the Legislature in amending such act. No increase in the Franchise fee that results from the application of this section shall take effect until the Franchisee has filed in good faith and the California Public Utilities Commission (the “PUC”) has approved an application to adjust rates to enable Franchisee to pass said Franchise fee increase through to consumers. The City agrees to support said application to the PUC and shall provide such reasonable assistance to the Franchisee as Franchisee may request, including, but not limited to, providing declarations and/or testimony in support of said rate adjustment. In the event the PUC approves a retroactive rate adjustment, the effective date of the increase in the Franchise fee will be correspondingly retroactive.

(b) The Franchisee of this franchise shall file with the Clerk of the City within three (3) months after the expiration of the calendar year, or fractional calendar year, following the date of the grant of this franchise, and within three (3) months after the expiration of each and every calendar year thereafter, a duly verified statement showing in detail the total gross receipts of the Franchisee, its successors or assigns, during the preceding calendar year, or such fractional calendar year, from the sale of the utility service within the City for which this franchise is granted. It shall be the duty of the Franchisee to pay to the City within fifteen (15) days after the time for filing such statement in lawful money of the United States, the specified percentage of its gross receipts for the calendar year, or such fractional calendar year, covered by such statement. Any neglect, omission or refusal by said Franchisee to file such verified statement, or to pay said percentage, at the times or in the manner hereinbefore provided, shall be grounds for the declaration of a forfeiture of this franchise and of all rights thereunder.


This grant is made in lieu of all other franchises owned by the Franchisee, or by any successor of the Franchisee to any rights under this franchise, for transmitting and distributing gas within the limits of the City, as said limits now or may hereafter exist, and the acceptance of the franchise hereby granted shall operate as an abandonment of all such franchises within the limits of this City, as such limits now or may hereafter exist, in lieu of which this franchise is granted.


The Franchise granted hereunder shall not become effective until written acceptance thereof shall have been filed by the Franchisee thereof with the Clerk of the City. When so filed, such acceptance shall constitute a continuing agreement of the Franchisee that if and when the City shall thereafter annex or consolidate with additional territory, any and all franchise rights and privileges owned by the Franchisee therein shall likewise be deemed to be abandoned within the limits of the additional territory. If Franchisee fails to file the written acceptance within the time and in the manner prescribed by this Section, Franchisee shall be deemed to have accepted each and every term of the Franchise.


The franchise granted hereunder shall not in any way or to any extent impair or affect the right of the City to acquire the property of the Franchisee hereof either by purchase or through the exercise of the right of eminent domain, and nothing herein contained shall be construed to contract away or to modify or to abridge, either for a term or in perpetuity, the City's right of eminent domain in respect to the Franchisee; nor shall this franchise ever be given any value before any court or other public authority in any proceeding of any character in excess of the cost to the Franchisee of the necessary publication and any other sum paid by it to the City therefore at the time of the acquisition thereof.


The Franchisee of this franchise shall:

(a) Construct, install and maintain all pipes and appurtenances in accordance with and in conformity with all of the ordinances, rules and regulations heretofore, or hereafter adopted by the legislative body of this City in the exercise of its police powers and not in conflict with the paramount authority of the State of California, and, as to State highways, subject to the provisions of general laws relating to the location and maintenance of such facilities;

(b) Pay to the City, on demand, the cost of all repairs to public property made necessary by any operations of the franchisee under this franchise;

(c) Indemnify, defend and hold harmless the City and its elected and appointed officials, officers, employees and agents from any and all liability for damages resulting from, arising out of, or claimed to arise out of, directly or indirectly, the negligent or wrongful acts, errors or omissions of Franchisee in conducting any operations under this Franchise; and be liable to the City for all damages resulting from the failure of said Franchisee well and faithfully to observe and perform each and every provision of this Franchise and each and every provision of Division 3, Chapter 2 of the Public Utilities Code of the State of California. Franchisee acknowledges that any claims, demands, losses, damages, costs, expenses, and legal liability caused by the release or spill of any Contaminant as a result of Franchisee’s use of or the existence of the pipes and appurtenances are expressly within the scope of this indemnity; to the extent they are imposed or required by the state agency with responsibility for the hazardous material or waste or the release or spill, the costs, expenses, and legal liability for environmental investigations, monitoring, containment, abatement, removal, repair, cleanup, restoration, remedial work, penalties, and fines arising from the violation of any local, state, or federal law or regulation, attorney’s fees, disbursements, and other response costs are expressly within the scope of this indemnity. This subsection (c) shall survive the termination or expiration of this franchise and shall continue for so long as franchise property of Franchisee is located within the City

(d) To the extent no in conflict with Applicable Law, if, in the reasonable discretion of the Director, subject to appeal to the City Council, the Franchisee's Facilities conflict in any way with the construction, relocation or repair of any City facility or storm drain or sewer owned by the City of Rancho Palos Verdes, County of Los Angeles, or any successor agency to any of these agencies, or if the Franchisee’s Facilities impede any lawful change of grade, alignment or width of any public street, way, alley or place, or conflicts with the construction of any subway or viaduct by the City or other proper governmental use of the streets (collectively referred to as “public projects”), the Franchisee shall remove or relocate its Facilities to the reasonably nearest alternative location or other location mutually agreeable to the City and the Franchisee necessary to accommodate the public project(s), either permanently or temporarily, as is mutually determined by the Director and Franchisee to be within the time required by the Director. Said removal or relocation shall be accomplished at no cost to the City. If the Franchisee, fails to remove or relocate its Facility within the required time, or to pave, surface, grade, repave, resurface or regrade, the City, to the extent permitted by Applicable Law, may cause the work to be done and shall keep an itemized account of the entire cost thereof, and the Franchisee shall reimburse the City or other public entity for such cost within thirty (30) days after presentation to said Franchisee of an itemized account of such costs. The Franchisee shall hold harmless the City, its officers and employees and the other public agency, if any, from any liability which may arise or be claimed to arise from the moving, cutting, or alteration of any of the Franchisee's Facilities, or the turning on or off of gas, electricity, cable or other services required to be accomplished by City or any other public agency as a result of the Franchisee's failure to relocate said facility by the date established by the City or other public agency. The Franchisee shall also be liable for any consequential damages incurred by the City or other public agency arising from the Franchisee's failure to timely complete the work required by this section;

(e) File with the legislative body of the City within thirty (30) days after any sale, transfer, assignment or lease of this franchise, or any part thereof, or of any of the rights or privileges granted thereby, written evidence of the same, certified thereto by the Franchisee or its duly authorized officers.

(f) At its own expense, Franchisee shall maintain during the life of the franchise a policy or policies of commercial general liability, including pollution legal liability coverage and workers’ compensation insurance from companies authorized to transact business in the State of California by the Insurance Commissioner of California and with an A.M. Best’s Rating of “A” or better.

(i) The commercial general liability insurance policy shall:

(A) be issued for Franchisee and name the City and its officers, agents and employees as additional insureds.

(B) defend and indemnify the insureds against liability for which the Franchisee is legally obligated to pay by reason of liability imposed upon Franchisee by law or liability assumed by Franchisee under the franchise for personal injury, bodily injury, wrongful death and property damage arising from the activities conducted pursuant to the franchise by providing coverage therefore, including but not limited to, coverage for the negligent acts or omissions of Franchisee and its agents, servants and employees, committed in the conduct of franchise operations.

(C) provide coverage limits in the amount of ten (10) million dollars ($10,000,000.00), per occurrence, and if a policy aggregate applies, such policy aggregate shall be twice the per occurrence limit;

(D) be noncancellable without thirty (30) days prior written notice, ten (10) days for non-payment of premium, directed to the City Clerk.

(ii) The Workers’ Compensation insurance requirement may be satisfied by self-insurance if the Franchisee is a qualified self-insured as approved by the State of California Department of Industrial Relations. Franchisee shall provide City a copy of the certificate to self insure as issued by the California Department of Industrial Relations.

(iii) Franchisee shall file with the City Clerk certificates of insurance providing the following information:

(A) The policy number.

(B) The policy effective date and the expiration date.

(C) The named insured and the certificate holder/additional insured.

(D) Type of coverage provided by each policy of insurance.

(E) The limits of coverage (required by the franchise) for each policy of insurance.

(F) If applicable, all endorsements required by this section and that form a part of the policy.

(iv) Franchisee retains the right to self-insure any of the insurance requirements above, as provided for as a qualified self-insured by the State of California. Franchisee also retains the right to determine what levels of deductibles or self-insured retentions it maintains.

(v) The Franchisee shall not commence operations until Franchisee has complied with the aforementioned provisions of this Section. The Franchisee shall cease operations if the Franchisee fails to maintain said policies in full force and effect. In the event any policy is cancelled, the Franchisee shall provide the City, at least five (5) business days prior to the effective date of the cancellation, but not later than one (1) day prior to the effective date of the cancellation, a certificate of insurance or confirmation of coverage binder showing that the Franchisee has replacement insurance in full force effective on the effective date of the cancellation.

The Franchisee may satisfy any or all of the insurances requirements under this Section 16 through self-insurance, provided the Franchisee is a qualified self-insured as approved by the State of California and the Franchise submits evidence of such qualifications to the City. The Franchisee retains the right to determine what levels of deductibles or self-insured retentions to maintain, provided, however, that such deductibles or self-insured retentions are declared to and acknowledged by City’s Risk Manager prior to the commencement of this Franchise.


(a) The Director shall have the power to give the Franchisee such directions for the location of any pipes and appurtenances as may be reasonably necessary to avoid sewers, water pipes, conduits or other structures lawfully in or under the streets; and before the work of constructing any pipes and appurtenances is commenced, the Franchisee shall file with said Director plans showing the location thereof, which shall be subject to the approval of said Director (such approval not to be unreasonably withheld); and all such construction shall be subject to the inspection of said Director and done to his or her reasonable satisfaction. All street coverings or openings of traps, vaults and manholes shall at all times be kept flush with the surface of the streets; provided, however, that vents for underground traps, vaults and manholes may extend above the surface of the streets when said vents are located in parkways, between the curb and the property line.

(b) Where it is necessary to lay any underground pipes through, under or across any portion of a paved or macadamized street, the same, where practicable and economically reasonable shall be done by a tunnel or bore, so as not to disturb the foundation of such paved or macadamized street; and in the event that the same cannot be so done, or in the event it is necessary to cut the street in order to access existing pipes and appurtenances, such work shall be done under a permit to be granted by the Director upon application therefor. Provided, however, that the fee to Franchisee for such a permit shall be imposed on a nondiscriminatory basis only to the extent such fees are imposed generally on all non-governmental applicants for such permits within the City, and the amount of such fee shall not exceed the reasonable expense to the City of processing such permit and inspecting the work done thereunder.


If any portion of any street shall be damaged by reason of defects in any of the pipes and appurtenances maintained or constructed under this grant, or by reason of any other cause arising from the operation or existence of any pipes and appurtenances constructed or maintained under this grant, Franchisee shall, at its own cost and expense, immediately repair any such damage and restore such portion of such damaged street to as good condition as existed before such defect or other cause of damage occurred, such work to be done under the direction of the Director, and to his or her reasonable satisfaction. If the Franchisee, within ten (10) days after receipt of written notice from the City, instructing it to repair such damage, shall fail to commence to comply with such instructions, or, thereafter, shall fail diligently to prosecute such work to completion, then the City immediately may do work necessary to carry out said instructions at the cost and expense of the Franchisee, which cost and expense, the Franchisee agrees, by its acceptance of this Franchise, to pay upon demand. If such damage constitutes an immediate danger to the public health or safety requiring the immediate repair thereof, the City without notice may repair such damage and the Franchisee agrees to pay all costs incurred.


(a) This Franchise is granted and shall be held and enjoyed upon each and every condition contained in this Ordinance and shall be strictly construed against the Franchisee. The Franchise shall grant only those rights that are stated in plain and unambiguous terms. Franchisee shall comply with all Applicable Law in the exercise of its rights under the Franchise. If the Franchisee shall fail, neglect or refuse to comply with any of the material provisions or conditions hereof, and shall not, within thirty (30) days after written demand for compliance, begin the work of compliance, or after such beginning shall not prosecute the same with due diligence to completion, then the City, by its legislative body, may declare this franchise forfeited but only after a hearing shall have been conducted. Notice of such hearing shall be given to Franchisee by certified mail not less than ten (10) days prior to such hearing.

(b) The City may sue in its own name for the forfeiture of this franchise, in the event of noncompliance by the Franchisee, its successors or assigns, with any of the conditions thereof.


At all times during the term of this Franchise, Franchisee will comply with all applicable laws



The Franchisee shall keep and preserve for a period of not less than four (4) years all financial records maintained by Franchisee in connection with this Franchise. Upon request, the Franchisee shall permit the City or its duly authorized representative to examine at reasonable times all of Franchisee's pipeline monitoring and repair reports subject to this Franchise, and any and all books, accounts, papers, maps, and other records kept or maintained by the Franchisee or under its control which concern the operations, affairs, transactions or property of the Franchisee with respect thereto. Said records shall be made available upon reasonable notice to the City at Franchisee’s office in Los Angeles, California.


a. Any decision made by the Director pursuant to authority delegated in this Ordinance may be appealed by any interested person to the City Council by filing a notice of appeal with the City Clerk within fifteen (15) calendar days of the issuance of the Director’s decision. The City Council shall fix a time and place for hearing such appeal, and the City Clerk shall give notice in writing to the Franchisee at the address on file with the City. The findings of the City Council shall be set forth in writing and shall be served upon the Franchisee by personal service or by depositing the notice in the United States mail, postage prepaid, addressed to the Franchisee at the address on file with the City. For purposes of seeking judicial review, the decision of the City Council shall be final when notice of the decision is served upon the Franchisee.


The Franchisee shall pay to the City within thirty (30) days after receiving a statement therefor, all actual and reasonable administrative and other costs incurred by the City in processing the application for a franchise, including but not limited to the costs of all technical experts, attorneys or other consultants retained by the City to negotiate the Franchise, the costs for the preparation of any reports, statements or studies reasonably required pursuant to the California Environmental Quality Act (Public Resources Code §§ 21000, et seq.,) and any similar Federal statute, or any successor statute, and for all reasonable advertising and publishing costs, including the cost of publishing the ordinance, if necessary, incurred in connection with the granting of the Franchise not to exceed a maximum amount of $7,500.00.


After the publication of this ordinance, the Franchisee shall file with the City Clerk a written acceptance of the franchise hereby granted, and an agreement to comply with the terms and conditions hereof. This Ordinance shall take effect on the 31st day after passage as provided by law.


In the event that either party to this Franchise commences any legal action or proceeding to enforce or interpret the provisions of this Franchise Agreement, the prevailing party in such action or proceeding shall be entitled to recover its costs of suit, including reasonable attorney’s fees.


If any part of this Ordinance or the application thereof to either of the parties hereto or to circumstances is for any reason held invalid by a court of competent jurisdiction, the validity of the remainder of the Ordinance or the application of such provision to the parties hereto or circumstances shall not be affected. If any part of this Ordinance is found to be invalid in a manner that affects a material term of the Franchisee, then the affected party may request renegotiation of said term pursuant to Section Two of this Ordinance.


The City Clerk shall cause this Ordinance to be posted in three (3) public places in the City within fifteen (15) days after its passage, in accordance with the provisions of Section 36933 of the Government Code. The City Clerk shall further certify to the adoption and publication of this Ordinance, and shall cause this Ordinance and its certification, together with proof of publication, to be entered in the Book of Ordinances of the City Council of this City.

PASSED, APPROVED, AND ADOPTED this 20th day of December 2005.

/s/ Stefan Wolowicz



/s/ Carolynn Petru

City Clerk

State of California )

County of Los Angeles )ss

City of Rancho Palos Verdes )

I, Carolynn Petru, City Clerk of the City of Rancho Palos Verdes, do hereby certify that the whole number of members of the City Council of said City is five; that the foregoing Ordinance No. 429 passed first reading on December 6, 2005, was duly and regularly adopted by the City Council of said City at a regular meeting thereof held on December 20, 2005, and that the same was passed and adopted by the following roll call vote:

AYES: Clark, Gardiner, and Mayor Wolowicz

NOES: None

ABSENT: Long and Stern



City Clerk