Jacks

I. FACTUAL AND PROCEDURAL BACKGROUND

As summarized in Jacks, the parties stipulated to the following facts in the trial court: “Beginning in 1959, the City and SCE entered into a series of franchise agreements granting SCE the privilege to construct and use equipment along, over, and under the City’s streets to distribute electricity. At issue in this case is an agreement the City and SCE began negotiating in 1994, when their 1984 agreement was about to expire. The 1984 agreement required SCE to pay to the City a fee equal to 1 percent of the gross annual receipts from SCE’s sale of electricity within the City in

3 exchange for the franchise granted by the City. During the course of extended negotiations regarding a new agreement, the City and SCE extended the terms of the 1984 agreement five times, from September 1995 to December 1999. “In the negotiations for a long-term agreement, the City pursued a fee equal to 2 percent of SCE’s gross annual receipts from the sale of electricity within the City. At some point in the negotiations, SCE proposed that it would remit to the City as a franchise fee 2 percent of its gross receipts if the Public Utilities Commission (PUC) consented…