City Council approved an extension of the current Franchise Agreement while the new Franchise Agreement was being negotiated at the May 22, 2023 meeting by Ordinance No. 2023-5-8.

The City of Plano and CoServ Electric have agreed to the terms of a new Franchise Agreement granting CoServ Electric to use the public Rights-of-Way in the City of Plano for the purposes of constructing and operating an Electric Distribution System. 

Since 1987, the City of Plano has granted CoServ Electric (formally Denton County Electric Cooperative) a non-exclusive franchise for the purpose of an Electric Distribution System within its city limits. CoServ Electric provides around 10% of the City’s electricity primarily in far north and west Plano, with Oncor providing the remaining 90%.

The current Franchise Agreement between CoServ Electric and the City of Plano has been in effect since 2003, and an updated agreement was necessary. Updates to the 2024 Franchise Agreement to align with our current franchise agreements with Oncor Electric, Atmos Energy and CoServ Gas include the following:  

• An update to the definition of “Gross Revenues” to include language under the accounting principles established by the Rural Utilities Service of the U.S. Department of Agriculture in 7 CFR 1767 and specifically 1767.26, Accounts 440-456, as amended.
• CoServ Electric’s requirement to remove and relocate its facilities within the time frame and as provided by the City’s Right-of-Way Management Ordinance, as amended.
• The terms of the agreement will be for an initial term of 10 years from the Effective Date, and will be automatically renewed for additional period of 5 year terms not to exceed a maximum term of 20 years from the Effective Date.
• Quarterly Franchise Fee payments will be due to the City on the same time frame as quarterly Franchise Fee payment by CoServ Gas.
• An update to the Effective Date is defined as 30 days after final passage and publication of the Franchise Agreement.

The City of Plano staff recommend the approval of the updated Franchise Agreement Ordinance with CoServ Electric.  As required by City Charter, the first reading will be held at the Monday, July 22nd City Council meeting, and the second reading will be held at the Monday, August 26th City Council meeting. After the second reading, the Ordinance will be published for four consecutive weeks in the official Plano newspaper, and conditioned upon written acceptance by CoServ Electric. 

This Franchise Agreement will produce an indeterminable amount of revenue, attributable to a quarterly franchise fee based on 4% of the Gross Revenues during the preceding quarter, as defined in the agreement. As a point of reference, anticipated CoServ Electric Franchise Fee Revenue to be received in FY 2023-24 is approximately $1,300,000. 

Approval of this Franchise Agreement relates to the City's Strategic Plan Critical Success Factor of Excellent, Innovative, and Accountable City Government.