The City charges a franchise fee whenever our public easements and rights-of-way are used for private business. Most ONG business customers currently pay a 3% franchise fee on natural gas purchases.
A new ONG franchise agreement was recently approved by City voters and now requires those companies that buy natural gas from a third party supplier and receive it through ONG pipelines to also pay the 3% franchise fee on the natural gas. The fee to be paid is based on a calculation formula in the ONG franchise agreement.
Key documents pertaining to the Natural Gas Franchise Fee are available here:
License Agreement for buyers of third-party natural gas.
Volumetric rate calculation form. The volumetric rate is the method by which fees for non-ONG gas customers are assessed.
Proposed ordinance as published in the Jounal Record newspaper. Dates of publication are listed on the document.
The franchise agreement also requires these companies (called Transport Customers) to enter into a License Agreement with the City of Oklahoma City prior to receiving transport gas through ONG’s natural gas distribution system.
Deadline extended
City Council voted January 31 to extend the deadline for compliance with the ordinance from February 4, 2006 until April 3, 2006. This means transport customers who still need to return their License Agreements must do so by February 24, 2006.
Why does the City charge franchise fees?
The City charges fees whenever our public easements and rights-of-way are used for private business. These fees provide income for services provided to all citizens, not just the company’s customers. City voters approved the ONG franchise on October 11, 2005.
Does ONG agree with the new franchise?
Yes. ONG and the City agreed to submit the new franchise ordinance to City voters.
Who else pays a franchise fee?
Cox Cable and OG&E also pay franchise fees. Many other companies make payments in other ways such as permits.
Who are transport customers?
Transport customers are ONG customers inside Oklahoma City who receive non-ONG (third-party) gas through ONG’s pipeline system.
Why do companies who are transport customers need a License Agreement with the City?
The License Agreement is required by the new voter approved Franchise Ordinance as a condition for the use of the public rights-of-way for the delivery of non-ONG gas to transport customers.
Is there a deadline date for the License Agreement to be approved?
Yes. Transport customers must have an executed License Agreement with the City of Oklahoma City by April 3, 2006.
Transport customers must return the License Agreement to the City by February 24, 2005 to allow for the City Council approval process.
What happens if a transport customer does not have a License Agreement with the City by April 3, 2006?
Transport customers who do not have an executed License Agreement with the City on April 3, 2006 cannot receive or transport natural gas through ONG pipelines. They must purchase natural gas from ONG until a License Agreement is in place.
Are transport customers required to renew the License Agreement?
No. Once the City approves the License Agreement there is no requirement to renew it.
Can the City terminate the License Agreement?
Yes. The reasons for termination are found in Section 3, (pages 3 & 4) of the License Agreement.
Who can I call for more information?
Contact Revenue Auditor Jason Martinez at (405) 297-2425.