City considers franchise deal with Lakeway energy company

A Lakeway-based energy company is looking to get its foot in the door in Kyle by having the city approve an ordinance to grant the company a franchise to supply gas to residents.

SiEngergy, LP, does not have agreements in place to supply gas within city limits. However, according to city documents, the company wants to have a franchise agreement in place to be able to act quickly, should the opportunity arise.

The company requested the franchise agreement to potentially offer service in the future, said Kyle Chief of Staff Jerry Hendrix. The city charter requires companies to have a franchise agreement first.

“Based on our knowledge, there’s only a small part over on the east side they would be able to provide service to in the future,” Hendrix said.

The agreement also provides for a franchise fee to be paid to the city that covers costs for use of its streets, as well as grants the city oversight on where the company puts its lines, he said.

The proposed ordinance is for a 10-year term, five percent franchise fee and requires that SiEnergy notify the city manager if the company enters negotiations to supply gas to a Kyle development. Until the company initiates service with the city limits, the franchise agreement will have no impact on the city budget.

The Kyle City Council approved the first reading of the ordinance at its meeting July 3. A second hearing, along with a mandatory public hearing, is scheduled for July 17.

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