Kyle City Council has authorized finalizing an agreement that would require Kinder Morgan to pay $2.7 million in exchange for exemption from the city’s new pipeline development ordinance.
The vote took place the night before the first hearing, scheduled for Sept. 17, in the pipeline company’s lawsuit against the city over the ordinance.
“The city of Kyle has been in the process of discussing a potential settlement with Kinder Morgan in regards to the ongoing litigation we are involved in with them,” Mayor Travis Mitchell said when the council convened after speaking with its attorneys.
The vote came just a week after the council met to amend the ordinance, originally passed in July, that places additional restrictions on and mandates additional requirements of both pipeline companies and developers working on projects near those pipelines.
The ordinance itself was written and approved after months of vocal opposition to and legal action against the Permian Highway Pipeline—a 430-mile natural gas conduit that Kinder Morgan plans to build through parts of the city—by Kyle’s elected officials.
Before the council voted on the potential settlement on Sept, 16, William Christian of Graves, Dougherty, Hearon & Moody—the Austin-based firm Kyle hired to defend the city against the suit—detailed the terms.
In addition to a $2.7 million payment from the company to Kyle—the first half to be delivered 30 days after completion of the pipeline and the second one year later—in exchange for exemption from the ordinance, the potential settlement would require the two parties to enter into a right-of-way use agreement that would provide the city would not be subject additional delays or costs “above and beyond what is spelled out in state of federal statutes” and that the city issue a road-crossing permit to the company within 14 days of the execution of the settlement.
Christian also said that, at the Sept. 17 hearing, both the company and city would ask for a two-week continuance from the U.S. District Court to continue negotiations.
“I want to make sure everybody out there knows we’re not done yet,” Council Member Daphne Tenorio said before the vote. “This is just an opportunity for us to continue the talks.”