§ 8-272. Requirements for franchise ordinance.

(a)

No ordinance for the grant of a franchise for an electric distribution system or a natural or artificial gas distribution system as set forth in section 8-271 shall be granted except under such terms and conditions as shall preserve the financial integrity of the Memphis light, gas and water division and the amount of payments in lieu of taxes received by the county from the Memphis light, gas and water division. Such franchise ordinance shall require that any franchise holder shall pay to the county a franchise fee of up to five percent of gross receipts of the electric or gas distribution system. Gross receipts shall include the costs of operation and the costs of purchased electric power and gas. If the franchise holder is distributing to itself, the gross receipts shall include not only the cost of operation of the distribution system but also the cost of the electricity or gas to be distributed.

(b)

The franchise holder shall make all of its records available to the county for the purpose of determining the franchise fee. If the franchise holder is also the owner of any natural gas facilities or the producer of electricity, the cost of the natural gas or the cost of the electricity shall not be less than the average annual cost for the preceding calendar year of electricity (demand and commodity charges) or such natural gas (commodity charge only) to the Memphis light, gas and water division for the purpose of computing the franchise fee.

(c)

If franchises are granted by the county and the City of Memphis ("city"), the franchise fee of the county shall be computed by applying the county percentage to the total gross receipts within both the county and the City of Memphis. One-half of that amount shall be allocated to facilities and one-half to consumption. The amount payable to the county from the portion allocated to facilities shall be its proportion of the value of facilities within the county outside the city to the total value of facilities. The amount payable to the county from the portion allocated to consumption shall be its proportion of the amount of consumption within the county outside the city to the total consumption. The allocation between the city and the county shall be adjusted as of the effective date of any annexation by the city and prorated for the franchise year.

(Code 1992, § 7-252; Ord. No. 37, § 2, 3-20-1989)