AGENDA CAPTION:
Title
Receive a Staff presentation and hold a public hearing to receive comments for or against Ordinance 2026-07, granting to SiEnergy, LP, d/b/a SiEnergy, the right, privilege and franchise to construct, install, extend, remove, replace, abandon, operate and maintain its facilities within the public rights-of-way of the City of San Marcos, Texas for the transportation, delivery, sale and distribution of natural gas; containing other provisions relating to the foregoing subject; providing for severability; including procedural provisions; providing for approval on three readings of the ordinance; and providing an effective date; and consider of approval of Ordinance 2026-07 on the first of three readings.
Body
Meeting date: March 3, 2026
Department: City Attorney’s Office
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Fiscal Note:
Prior Council Action: The city council previously approved a natural gas franchise agreement with SiEnergy in 2019.
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Background Information:
Franchise Agreements: Outside utility providers, other than telecommunications providers, that maintain infrastructure in the city must seek permission from the city to locate within city streets and rights-of-way. Such infrastructure may include natural gas, water and wastewater line and electric power infrastructure. That permission is granted via a franchise agreement.
The city is required to treat franchise holders equitably.
Franchise agreements establish fees for the privilege of using city streets and rights-of-way. They also establish rules and procedures for how the work will be done so as to protect city streets, pavement, and infrastructure and the public generally.
SiEnergy Franchise: The city approved a franchise agreement with SiEnergy in 2019. For over 25 years, SíEnergy has been a provider of natural gas services in Texas, serving primarily new single-family developments. SiEnergy presently serves customers in the Houston, Dallas-Fort Worth, and Austin metropolitan areas and the corridors running between those areas.
The company has not yet developed infrastructure in the city, but anticipates that possibility with new developments. The original agreement has expired and the company seeks to renew the agreement.
As a Texas natural gas utility, SiEnergy is regulated by the Railroad Commission of Texas and operates under the guidelines of the commission. Unlike electric utilities, which must obtain a Certificate of Convenience and Necessity (CCN), natural gas utilities in Texas can provide services anywhere in the state.
The company indicates that it has no immediate plans to provide service in the City, but it may serve proposed developments within the City’s ETJ. The company indicates that its facilities needed to serve such projects could potentially cross through land within the city limits along SH-80 and 1984. The company also prefers to have a franchise agreement in place the event projects in the ETJ are annexed. The company’s initial focus is on residential developments and major commercial projects.
Rates: For any infrastructure that is installed within the city, the agreement provides that the company will make quarterly payments equal to five percent of gross receipts for gas sold in the city and seven cents for every thousand cubic feet of natural gas transported through any lines in the city.
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