DEPARTMENT:
Finance
DEPARTMENT HEAD:
Troy Elliott, Deputy Chief Financial Officer
COUNCIL DISTRICTS IMPACTED:
District 4
SUBJECT:
West Texas Gas Inc. License Agreement
SUMMARY:
West Texas Gas Inc., (WTG) has requested a non-exclusive license agreement for the use of City right-of-way for the installation and operation of facilities to sell and transport natural gas.
BACKGROUND INFORMATION:
WTG is a natural gas distribution utility regulated by the Railroad Commission (RRC) of Texas. WTG owns and operates 5,797 miles of natural gas distribution mainlines and provides natural gas service to 28,670 customers in Oklahoma and Texas. WTG also provides natural gas gathering and natural gas liquids transmission services. The company has its headquarters in Midland, Texas.
Under state law natural gas distribution companies, such as WTG, have the right to access City right-of-way, subject to consent from the City and an agreement to abide with City regulations. City consent takes the form of a licensing agreement with reasonable compensation to the City for use of the right-of-way. Grey Forest Utilities is an example of a previously negotiated licensing agreement where compensation was set at 3% of gross revenues.
WTG has provided service to communities south and west of San Antonio since 1999. In 2019 representatives of WTG contacted the City and notified City staff that as a result of annexation, WTG now had facilities located within the City limits in the southwest and west side of San Antonio. WTG also informed staff that they were providing service to two schools south of Loop 410 and east of Somerset road. City staff notified WTG that they would need to obtain a non-exclusive license agreement for the use of City rights-of-way and pay compensation to the City.
Key terms of the agreement are (a) The term of the license agreement is for twenty-five (25) years, (b) WTG must pay the City 3% of gross revenues from sales in the licensed area, (c), L...
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