Southern Union Co. v. City of Edinburg

The City of Edinburg entered into franchise agreements with Rio Grande Valley Gas Company, to whom we will refer as RGVG, that were embodied in ordinances of the City. The ordinance at issue in this case, Ordinance No. 1129, permitted RGVG to install and operate pipeline facilities on or under public rights-of-way and other public lands within the City or areas annexed by the City and to distribute and sell natural gas. The ordinance required RGVG to pay a franchise tax of “four (4%) percent of its gross income derived from all gas sales within the City.” RGVG was subsequently acquired by and…