HomeMy WebLinkAbout1986-1988
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Sening the cities of Bryan. Denton, Garlrnd & CreenOIle.
May 11, 1988
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Ms, 0ennifer Walters
City Secretary
City of Denton
215 E. McKinney
Denton, Texas 76201
Re: Ordinances Regarding Comanche Peak
j Settlement and Power Sales
Contract Amendment
Dear Ms. Halters:
Please furnish me with four, certified copies each of the ordinance and
meeting minutes approvitg the settlement of the Comanche Peak litigation
between TMPA and TU Electric arid the ordinance and meeting minutes approving
the amendment to the Power Sa'rs Contract between TMPA and your City.
Enclosed is a certificate which ycu may use. I have completed the certificate
based upon the information currently available to me. Please complete the
rest of the certificate (four times for each ordinance), execute it and return
to me with the ordinance attached.
j Thank you for you assistance in this matter. If you have an
please do not hesitate to contact me or my secre•ary, Sandra Wager. y questions,
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Sincerely,
TEXAS MUNICIPAL POWER AGENCY '
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Jim Bailey
Agency Attorney
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Enclosure
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Texas Municlital Power Agency P.O. Box 7000 Orion, Tim 77805 1409) 873.1413
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CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
I, the undersigned, City Secretary of the City of Denton, Texas,
DO HEREBY CERTIFY as follows:
1. That on the let day of March , 1988, the City
( 1 Council of the City of Denton, Texas, convened in ove session at its
iE regular meeting place in the City Hall of said City; to -July constituted
members of the Council being as follows:
Mayor Ray Stephens Council Member Bob Corton
Mayor Pro Tem. Linnie McAdams Council Member Jane Hopkins
Council Member Jim Alexander
Council Member Hugh Ayer
Council Member Randall Boyd
all of said persons were present at said meeting, except the following:
none Among other business considered at
said meeting, the attached ordinance entitled:
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88-051
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was introduced and submitted to the Council for passage and adoption, After
II presentation and due consideration of the ordinance, and upon a motion made by
J Alexand r and seconded by McAdAmm~~__.__ the ordinance
was u y passe an a opted on the first gc,aellR+farx:Bitx(RQx reading by the
Council to be effective immediatelysx3Ac:11gtsc by the following vote:
7 voted "For" n voted "Against" n abstained
all as shown in the official Minutes of the Council for the meeting held on
f the aforesaid date.
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2. That the attached ordinance is a true and correct copy of the
original on file in the official records of the City; the duly qualified and
acting members of the City Council of the City on the date of the aforesaid
meeting are those persons shown above and, according .o the records of my
office, advance notice of the time, place and purpose of the meeting was given
to each member of the Council; and that said meeting, including the subject of
the entitled ordinance, was posted and given in advance thereof in compliance
with the provisions of Article 6252-17, Section 3A, V.A.T.C.S.
i IN WITNESS WHEREOF, I have hereunto signed my name officially and
affixed the seal of said City, this the 24th day of mA14+
1998.
i *Citf ry
on, Tex as
(City Seal)
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ORDINANCE NO. _U51
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
MAKING CERTAIN FINDINGS RELATING TO AND INVOLVING THE PROJECT OF
THE TEXAS MUNICIPAL POWER AGENCY KNOWN AS THE COMANCHE PEAK STEAM
ELECTRIC STATION AND ASSOCIATED FACILITIES; AUTHORIZING THE
EXECUTION AND DELIVERY OF A RELEASE AND COVENANT NOT TO SUE WITH
RESPECT TO SAID PROJECT AND THE JOINT OWNERSHIP AGREEMENT TO
WHICH SAID AGENCY IS A PARTY; CONSENTING TO, APPROVINj, AUTH-
ORIZING AND RATIFYING TWO AGREEMENTS BETWEEN SAID l:~ENCY AND
TEXAS UTILITIES ELECTRIC COMPANY CONCERNING SAID PROJECT AND JOINT
OWNERSHIP AGREEMENT AND THE ELECTRIC POWER AND ENERGY GENERATED
AT SAID PROJECT; RELEASING ANY CLAIM AGAINST SAID AGENCY ON
{ ACCOUNT OF ITS EXECUTION OF EACH OF SAID TWO AGREEMENTS BETWEEN
SAID AGENCY AND TEXAS UTILITIES ELECTRIC COMPANY; APPROVING THE
WITHDRAWAL, UNDER CERTAIN CONDITIONS, OF SAID CITY'S APPROVAL OF
SAID PROJECT; MAKING CERTAIN REPRESENTATIONS AND WARRANTIES;
AGREEING TO BE BOUND BY, AND TO COMPLY WITH, THE NOTICE AND OTHER
REQUIREMENTS SET FORTH IN AN ASSUMPTION AND INDEMNITY AGREEMENT
EXECUTED BY TEXAS UTILITIES ELECTRIC COMPANY; AUTHORIZING THE
DELIVERY OF CERTAIN CERTIFICATES OF THE CITY SECRETARY; AND
PROVIDING FOR AN EFFECTIVE DATE OF THIS ORDINANCE.
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k WHEREAS, the Texas Municipal Power Agency (the "Agency") was
€ duly and validly created and established as a joint powers agency
I under Tex. Rev. Civ. Stat. Ann. art. 1435a (Vernon 1980) pursuant
to the adoption of concurrent ordinances of the Cities of Bryan,
F Denton, Garland and Greenville, Texas (the "Cities") and the
concurrent ordinance heretofore duly adopted by the City of
{ Denton (the "City") in such connection has not been amended or
repealed; and
WHEREAS the City has heretofore entered into a Power Sales
Contract, dated as of September 1., 1976, with the Agency (the
"Power Sales Contract"), which Power Sales Contract is valid and
binding upon, and legally enforceable against, the City; and
WHEREAS, pursuant to Section 13 of the Power Sales Contract,
the City has approved the Comanche Peak Steam Electric Station as
a Project and such approval has not been amended or repealed by
the City; and
WHEREAS, upon the approval of the Cities of the Comanche Peak
Steam Electric Station as a Project, the Agency, on January 2,
1979, entered into the Joint Ownership Agreetuent Between Dallas i
Power & Light Company, Texas Electric Service Company, Texas
Power & Light Company, Texas Utilities Generating Company, Texas
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Municipal Power Agency and Brazos Electric Power Cooperative,
Inc., which Joint Ownership Agreement was subsequently modified
in writing on June 1, 1979, and subsequently amended in writing
on December 9, 1980 and February 12,t 1982 (as modified and
amended, the "Joint Ownership Agreement"); and
WHEREAS, certain litigatioi is currently pending among the
Agency, Texas Utilities Electric Company ("TU Electric") and
Texas Utilities Company, being Cause No. 86-6809-A in the
District Court of Dallas County, Texas, 14th Judicial District,
styled "Texas Utilities Electric Company v. Tex-La Electric
Coo eratOV-or- exas Inc. t a r-, cause o. , n t e
` T District Court o Travis County, nty, Texas, 98th Judicial District,
styled "Tex-La Electric Cooperative of Tas Inc, and Texas
Munici al Power Aienc v, Texas t t ea exectr c om an anU
Cause o. 83- in the District Court o Harris County, Texas,
215th Judicial District, styled "Charles A. Atchison, et al v.
Brown 6 Root, at al."; and
WHEREAS, the Agency and TU Electric have agreed to compromise
I and settle all of the claims, actions, controversies, causes of
action, disputes, demands and complaints between them in the
above-referenced litigation as well as certain claims, actions, j
controversies, causes of action, disputes, demands and complaints
concerning the Joint Ownership Agreement, the Comanche Peak Steam
Electric Station and certain properties associated with the
Comanche Peak Steam Electric Station, all in accordance with and
pursuant to that certain written Agreement between the Agency and
TU Electric dated February 12, 1988 (the "A reement"), providing
for the sale by the Agency to TU Electric of the Agency a owner-
ship interest in Comanche Peak (as said term is defined in 'the
Agreement), an executed copy of which has been reviewed by the
City prior to the adoption of this Ordinance; and
Ali WHEREAS, as specified in Section 5.3(g) of the Agreement, the
Agency and TU Electric have approved the form and substance of,
and have agreed to enter into, a Power Purchase Agreement (the
"Power Purchase Agreement") providing for the sale by the Agency
to TU Electric of the Capacity Entitlement and the Energy Entitle-
ment Share (as said terms are defined in the Power Purchase
Agreement) generated at the Comanche Peak Steam Electric Station,
a copy of which has been reviewed by the City prior to the
adoption of this Ordinance; and
WHEREAS, neither the Agency not the City is in default under
the provisions of the Power Sales Contract nor has any event
occurred nor does any condition exist which with the giving of
notice or passage of time (or both) may constitute a default,
which in either event would either adversely affect the Purchased
Assets, as said term is defined in the Agreement, or prevent the
consummation of any of the transactions provided for in the
Agreement and in the Power Purchase Agreement; and
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WHEREAS, for and in considevation of the agreements, under-
takings, promises and covenants set forth in the Agreement,
including without limitation TU 3lectric's agreement to deliver
to the City a Release releasing curtain claims TU Electric, Texas
Utilities Company (the parent of TU Electric) and their
subsidiaries and affiliates have or may have against he Agency
and the City, and TU Electric's agreement to deliver to the City
an Assumption and Indemnity Agreement under which TU Electric
agrees assume certain obligations of the Agency under the Joint
Ownership Agreement and to indemnify the Agency and the City
against certain claims, the Agreement stipulates that as a
condition to the consummation of the Agreement the City will pass
this Ordinance and will execute and deliver to TU Electric a
Release And Covenant Not To Sue in substantially the form set
forth as Exhibit A to this ordinance and will otherwise consent
to, approve and ratify the Agency's execution and delivery of the
Agreement, the other documents to be executed and delivered by
the Agency as set forth in the Agreement, and the Power Purchase
Agreement; and
WHEREAS, the Assumption and Indemnity Agreement referred to
above (attached to the Agreement as an Exhibit, the form of which
has been reviewed by the City prior to the adoption of this
Ordinance) contains certain notice and other requirements to be
performed by the City in the event that the City is notified of
l the commencement of any action or proceeding or the assertion of
any claim with respect to which the City may be entitled to
indemnification thereunder or under the Agreement; and
WHEREAS, the execution and delivery by the Agency of the
Agreement and the other documents to be executed and delivered by
the Agency as set forth in the Agreement and the adoption of this
Ordinance and the execution and delivery by the City of the
Release and Covenant Not To Sue in the form set forth in Exhibit
- A to this Ordinance and the execution and delivery by the Agency
of the Power Purchase Agreement will not conflict with or result
in any violation of, or constitute a default under, the City
Charter of the City, any prior Ordinance of the City, or any
material provision of any mortgage, indenture, lease, agreement
(including without limitation the Power Sales ConL:ract) or other
instrument, including any revenue or other bonds or other
obligation or other evidence of indebtedness, to which the City,
or any of the City's properties or assets, is subject or a party,
or any permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, rule or regulation applicable to the
City of any of its properties or assets, or with the passage of
time or the giving of notice (or both) may constitute a default
thereunder, and the City has full, requisite power and authority
to adopt this Ordinance and to execute, deliver and perform the
Release and Covenant Not to Sue attached as Exhibit A to this
Ordinance; and
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WHEREAS, other than the adoption of this Ordinance, no other
consent, approval, authorization, ppermit, certificate or order of
any court, tribunal or governmental agency or authority, Federal,
st,,te, county or municipal, is or will be required to permit the
City to consent to, approve and ratify the Agency's execution and
delivery of the Agreement and the other documents to be executed
and delivered by the Agency as set forth in the Agreement and the
Agency's execution and delivery of the Power Purchase Agreement
and the City Council's adoption of this Ordinance and the City' -
execution and delivery of the Release And Covenant Not To Sue in
the form set forth as Exhibit A to this Ordinance; and
WHEREAS, there are no obligations or liabilities, including
with respect to any revenue or other bonds or other obligations
or other evidence of indebtedness, of the City, whether accrued,
absolute, contingent or otherwise, which TU Electric may become
liable for or is assuming as a result of the purchase of Assets
provided for in the Agreement or in the Power Purchase Agreement
or which may apply with respect to any of the said assets; and
WHEREAS, the City Council has been advised that (i) reports
of R. W. Beck and Associates, co.isulting engineers to the Agency,
dated July 21, 1987, and February 11 , 1988, include forecasts
(based in part upon projections madeby the City's Director of
Electric Utilities) that the existing generating capacity of the
Cities and the Agency, exclusive of the Comanche Peak Steam
Electric Station, is expected to be sufficient to satisfy the
peak demand and the reserve requirements of the Cities own
electric distribution system through 1995; that additional
generating capacity in lieu of the interest of the Agency in the
Comanche Peak Steam Electric Station may be constructed or
acquired by the time required to satisfy projected future
increases in the requir,3ments of the Cities' own electric
j distribution systems; and in essence that the substitution of
such replacement capacity for the interest of the Agency in the
Comanche Peak Steam Electric Station is not expected to result in
any increase in annual combined carrying and operating costa of
the electric generating facilities of the Cities and the Agency
during the forecasted 10 year period; and (ii) that the
disposition of the interest of the Agency in the Comanche Peak
Steam Flectric Station and any entitlements to electric power and
energy generated therefrom will reduce the amount of surplus
energy available for sale to others by the Citiga during periods
of peak demand, unless additional generating capacity is acquired
or contracted for by the Agency;
WHEREAS, the Agency has also represented to the City Council
that, subsequent to the disposition of its interest in the
Comanche Peak Steam Electric Station, any entitlements to electric
power and energy generated therefrom, and associated transmission
facilities, it would be possible for the Agency to construct,
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acquire, or contract for additional electric generating and
transmission capacity in the amounts and by the time required to
satisfy the projected requirements of the electric system of the
City as well as the other Cities as contained in the aforesaid
forecasts, provided that the facilities required to provide such
capacity, or contracts for the purchase of power, if of the type
which would be classed as a "Project" under clause (iii) of the
definition of such term in the Power Sales Contracts, are
approved by the Cities pursuant to Section 13 of the Power Sales
Contract; and
WHEREAS, the Agency has further represented to the City
Council that at such time as TU Electric has performed its obli-
gations under the Agreement and Power Purchase Agreement,
including the payments of all amounts due thereunder, that the
Agency will, with the consent of the Cities, withdraw its prior
approval of the Comanche Peak Steam Electric Station Project (it
being understood that if the Agreement and the Power Purchase
Agreement are terminated, the Agency may be required to resume
payments under the Joint Ownership Agreement in order to avoid a
default under the Agency's bond resolutions); and
WHEREAS, the City Council has been advised that the provisions
of the Power Sales Contract, which have been considered as having
primary bearing upon the Agreement and the Power Purchase Agree-
ment, are as follows:
Section 3: Sale and Purchase of Power and Energy.
(a) Each City during the time this Section is applicable
shall:
(1) Purchase and receive from the Agency all Power,
and Energy which it shall require for the
operation of its electric system in excess of
the amount (i) supplied by any generation and
transmission facilities owned by it on the
effective date of this Contract, including
generating and transmission facilities under
construction on such date, and improvements or
extensions of generating facilities which
increase the Rated Capacity of same so long as
the increase during any period of two successive
Contract Years do not exceed 10% of the same's
Rated Capacity at the beginning of such period 1
provided the Cities and the Agency may, in
writing, waive such 10% limit, and (ii) supplied
from any generation facility primarily fueled
from and the construction and operation of which
is incidental to the disposal of solid waste
that is hereafter constructed and owned by one
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or more of the Cities, together with any transmis-
sion facilities that are necessary for the transmis-
sion of Power and Energy therefrom; and * *
Section 1: Rates and Charges:
(a) The rates and charges of the Agency to the Cities
for Power and Energy and for services supplied shall
be:
(1) non discriminatory, and
(2) fair and reasonable, and be based upon the coat
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of providing the Power and Energy or providing
the service with respect to which the rate or
charge is based, and
j (3) adequate (after taking into consideration other
monies received or anticipated to be received)
in each Contract Year to pay or make provision
for paying Annual System Costs.
Section 12: Covenants of the Agency.
(b) The Agency shall use reasonable diligence to provide
a constant and uninterrupted supply of Power and
Energy hereunder. If the supply of Power and Energy
shall fail, or be interrupted, or become defective
by reason of force majeure as hereinafter provided,
the Agency shall not be liable therefor or for ,
damages caused thereby.
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(d) The Agency covenants and agrees that it will operate,
maintain and manage its System or cause the same to
be operated, maintained and managed in an efficient
and economical manner, consistent with sound utility
practice and in accordance with standards normally
used by utilities owning like properties.
WHEREAS, it is now proper for the City Council to proceed
with the adoption of its Ordinance; NOW, THEREFORE,
THE COUNCIL. OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. The recitals of fact contained in the preamble of
this Ordinance are found to be true and are adopted as a part of
this Ordinance and the judgment of the City Council.
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SECTION II, (a) That the City Manager is hereby authorized
and directed to immediately execute the Release And Covenant Not
to Sue in the form attached as Exhibit A to this Ordinance and
made a part of this Ordinance for all purposes. The performance
of the obligations of the City under said Release and Covenant
Not to Sue is hereby accepted as an obligation of the City. The
City Manager shall cause the executed original of said Relee
And Covenant Not To Sue to be delivered to the General Counselato
the Agency to be held in escrow by him until the Initial Closing
Date referred to in the Agreement (the "Closing Date") as may be
ofestabltheished in the that the General) Counsel stouthe Agency agreement
authorized to deliver said Release And Covenant Not To Sue to TU
Electric on the Closing Date when all of the other prerequisites
for closing other than the delivery of such Releases and Covenants
Not to Sue of the Cities of Bryan, Denton, Garland and Greenville
! have been met or waived by TU Electric and the Agency; and, upon
delivery thereof, the same shall constitute the act and deed of
the City Council and the City for all purposes.
(b) The acceptance of the responsibilities imposed upon the
I~ General Counsel to the Agency, as set forth in the preceding
shallgg rbe , a shall o dition noted at
to the delivery this Ordinance
Release
R And Covenant Not to Sue. It is provided, however, that such
General Counsel shall refuse to deliver said Release And Covenant
Not To Sue unless supplied with a certificate, dated the Closing
Date, by the City Secretary of the City that this Ordinance has
not been repealed or amended, which the City Secretary is hereby
authorized and directed to deliver.
SECTION III.
execution _01--t-Me AgreemIt is ent and the found
Power Purchase miAgreement the
the parties and the performance of the obligations of the Agency
11 thereunder, including the series of sale transactions whereby all
of its ownership interest in Comanche Peak and associated
facilities, including without limitation the Fuel and Transmission
Facilities (as said terms are defined in the Agreement) and the
sale of the Capacity Entitlement and the Energy Entitlement Share
(at said terms are defined in the Power Purchase Agreement), will
not cause the ency to be in violation of its obligations under
Sections 3(a)('11, 7(a), 12(b) or 12(d) of the Power Sales
Contract with the City, these being the only pertinent Sections
of the Power Sales Contract, and the City does hereby consent to,
approve and ratify the Agency's execution and delivery of the
Agreement and the Power Purchase Agreement to TU Electric, the
consummation of the sales of the Purchased Assets (as defined and
provided for in the Agreement) by the Agency to TU Electric and
the consummation of the other transactions provided for in the
Agreement and the consummation of the sale of the Capacity
Entitlement and the Energy Entitlement Share (as defined and
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provided for in the Power Purchase Agreement) by the Agency to TU
Electric.
hereafterh have City hereby releases any claims that it has or may
Agreement and the Power Purchase Agreement by the Agency and the
performance of its obligations thereunder would cause the Agency
to violate the provisions of the Power Sales Contract, and
warrants and stipulates that the Agency's execution of the
Agreement and the Power Purchase Agreement and performance of its
obligations thereunder will not cause a violation of any of the
aforesaid provisions of the Power Sales Contract or any other
agreement or instrument to which the City is a party.
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(c) Nothing herein shall be construed as (i) releasing any
claims against the Agency except as provided in paragraph (b) of
1 4 this section; (ii) interfering with the discretion vested in the
I Board of Directors of the Agency; or (iii) approving any proposed
Project under the Power Sales Contract.
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SECTION IV. The City Council hereby approves the withdrawal
by t e Ag~i`ency of its approval of the Pro~ect knoir,i as the Comanche
Peak Steam Electric Station and associated facilities at such
j time as TU Electric has pei.formed its obligations under the
Agreement and the Power Purchase Agreement, including the
3 payments of all amounts due thereunder, (it being understood that
if the Agreement and the Power Purchase Agreement are terminated
the Agency may be required to resume payments under the Joint
Ownership Agreement in order to avoid a default under the
Agency's bond resolutions).
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SECTION V. The City hereby represents and warrants that it
has not ass gned and, as of the Initial Closing provided for in
the Agreement, will not have assigned any of the claims, actions,
controversies, causes of action, disputes, demands and complaints ,
which are subject to the Release And Covenant Not To Sue provided
for in Section II of this Ordinance.
SECTION VI. The City Secretary is hereby authorized and
directs to a iver or cause to be delivered, at the Initial
Closing provided for in the Agreement, a certified copy of this
Ordinance certifying that this Ordinance has not been amended or
repealed and a certificate with respect to (i) the incumbency of
the City officials and tboir signatures to (a) this Ordinance and
(b) the Release And Covenant Not To Sue and (ii) the due adoption
of this Ordinance.
SECTION VII. It is hereby officially found and determined
4 that t e meet ng at which this Ordinance is passed is open to the
public as required by law and that public notice of the time,
place and purpose of sa•_d meeting was given as required.
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SECTION VIII. The City hereby agrees to be bound by, and to
comp y~h; the notice and other requirements pertaining to the
City as set forth in the Assumption and Indemnity Agreement.
SECTION IX. That this ordinance shell become effective
imme ate y upon its passage and approval.
PASSED AND APPROVED this the lst day of March, 1988.
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ATTEST:
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SECRETARY
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APPROVED AS TO LEGAL FORM;
DEBRA A. DRAYOVITCH, CITY ATTORNEY
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BY:
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The undersigned, General Counsel to the Texas Municipal Power
Agency, hereby accepts the responsibility imposed upon him in
Section II of the foregoing Ordinance.
I PA L
GENERAL COUNSEL TO THE TEXAS
MUNICIPAL POWER AGENCY
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EXHIBIT A
THE STATE OF TEXAS §
COUNTY OF DENTON RELEASE AND COVENANT NOT TO SUE
§
For and in consideration of the agreements, undertakings,
promises, and covenants of TU Electric, TUC, and their subsi-
diaries, and affiliates set forth in the Agreement, including
without limitation the contemporaneous delivery to the City by
TU Electric of (1) a Release releasing certain claims which TU
Electric, TUC, and their subsidiaries and affiliates, have or
may have against TMPA and the City, and (2) an Assumption and
Indemnity Agreement under which TU Electric agrees to indemnify
the City against certain claims, the adequacy and sufficiency of
such consideration being hereby acknowledged and confessed, the
' City, for itself and on behalf of any person or entity, private
or governmental, claiming by, throwggh or under the City,
including without limitation its or their respective insurers,
agents, servants, employees, officers, directors, consultants,
attorneys, and representatives, does hereby agree to the
following:
1. DEFINITIONS
1 As used herein, the following terms have the following
meanings:
A. "Agreement" means that certain Agreement dated February
12, 1988, by and between TMPA and TU Electric.
B. "BEPC" means Brazos Electric Power Cooperative, Inc. j
C. "City" means the City of Denton, Texas.
D. "Comanche Peak" means the nuclear-fueled electric gene-
rating facility under construction on certain lands situated in
Hood and S.)mervell Counties, Texas and consisting of two unite
having a nominal capacity of 1,156 megawatts each, and related
properties, and is the aggregate and combination of the Station,
Fuel, and Transmission Facilities, and all other rights and
interests associated with or relating thereto.
E. "Fuel" means the Comanche Peak nuclear fuel, irrespective
j of chemical and/or physical form, and the rights and interests
related thereto.
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j F. "JOA" means that certain instrument entitled on the cover
i page thereof "JOINT OWNERSHIP AGREEMENT BETWEEN DALLAS POWER &
LIGHT COMPANY, TEXAS ELECTRIC SERVICE COMPANY, TEXAS POWER 6
LIGHT COMPANY, TEXAS UTILITIES GENERATING COMPANY, TEXAS
MUNICIPAL POWER AGENCY AND BRAZOS ELECTRIC POWER COOPERATIVE,
INC. FOR COMANCHE PEAK STEAM ELECTRIC STATION", executed on
January 2, 1979, together with and as modified by that certain
instrument entitled on the cover page thereof "Modification of
Joint Ownership Agreement Between Dallas Power 6 Light Company,
Texas Electric Service Company, Texas Power 6 Light Company,
Texas Utilities Generating Company, Texas Municipal Power Agency
and Brazos Electric Power Cooperative, Inc.: For Comanche Peak
Steam Electric Station," executed on June 1, 1979, together with
and as amended by (i) the Amendment of Joint Ownership Agree-
ment, executed on December 9, 1980, between Dallas Power 6 Light
Company, Texas Electric Service Company, Texas Power 6 Light
Company, Texas Utilities Generating Company, TMPA, BEPC, and
Tex-La, together with and as amended by (it) the Second Amend-
ment of Joint Ownership Agreement, executed on February 12,
1982, between Dallas Power 6 Light Company, Texas Electric
Service Company, Texas Power 6 Light Company, Texas Utilities
Generating Company, TMPA, BEPC, and Tex-La.
G. "owners" means collectively TMPA, TU Electric, Tex-La,
and BEPC, as owners of Comanche Peak in accordance with the
terms of the JOA, or singularly any of such parties.
H. "Project Manager" means TU Electric designated and acting
as such in accordance with the terms of the JOA.
I. "Site" means approximately 7,669 acres owned (in fee or
other estate or interest) by the Owners, as tenants in common,
and located in Hood and Somervell Counties, Texas.
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J. "Station" means the Sites, all improvements thereon
(including Squaw Creek Lake and Park) and all fixtures and
attachments thereto, as well as (i) all personal property
thereon and associated therewith or related thereto and owned by
the Owners, and (ii) all rights (tangible or intangible), and
all easements and other interests of any nature associated
therewith or related thereto and owned by the Owners, excluding,
however, the Fuel, and the Transmission Facilities.
K. "Subject Claims" means any and all claims, actions, con-
troversies, causes of action, disputes, demands, and complaints
of whatsoever kind or nature and whether known or unknown.
L. "Tex-La" means Tex-La Electric Cooperative of Texas, Inc.
M. "TMPA" means Texas Municipal Power Agency.
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N. "Transmission Facilities" means the Comanche Peek--Parker
Switching Station 345 kV electrical transmission line approxi-
mately 41 miles in length, and associated rights-of-way, equip-
ment, fixtures and personal property.
0. "TUC" means Texas Utilities Company, which is a Texas
corporation and the parent of TU Electric.
P. "TU Electric" means Texas Utilities Electric Company,
which is a Texas corporation.
II. RELEASE
The City, except as provided in paragraph V herein, for
itself and on behalf of any person or entity, private or govern-
mental, claiming by, through, or udder the City, including
without limitation its or their respective insurers, agents,
servants, employees, officers, directors, consultants, attorneys,
and representatives does hereby waive, release, discharge,
renounce, and relinquish any and all Subject Claims relating to
Comanche Peak which it has or they have or may have, whether
known or unknown, contingent or absolute, including without limi-
tation those based on common law, whether contract (expressed or
implied including express or implied warranty) or tort (includ-
ing, without limitation, intentional tort, negligence or gross
negligence, sole, joint) or concurrent) or strict liability or
fraud, and those based upon any Federal, state, or local statute,
law, order, or regulation, including without limitation the
Atomic Energy Act of 1954, as amended, the regulations of the
United States Nuclear Regulatory Commission, the Securities Act
of 1933, as amended or the Securities Act of 1934) as amended,
and any rule or regulation thereunder, the Texas Securities Act
(Title 19, Articles 381-1, e_ts_e_g., V.A.T.S.) and the Texas
Deceptive Trade Practices and-Consumer Protection Act, against
TU Electric or TUC, or both, in any capacity, whether indivi-
dually, as the Project Manager of Comanche Peak, or otherwise,
and their respect ve insurers, agents, servants, employees,
officers, directors, shareholders, consultants, attorneys, and
representatives, past and present, and my and all of their
respective successors, subsidiaries, and affiliates and their
respective agents, servants, employees, officers, directors,
shareholders, consultants, attorneys, and representatives, past
and present.
III. COVENANT
The City hereby covenants and warrants that it has not
assigned any Subject Claims that are hereby released.
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s:ana
~yr.r+.a ,•seea~
IV. COVENANT NOT TO SUE AND AGREEMENT NOT TO CHALLENGE
The City, except as provided in paragraph V herein, for
itself and on behalf of any person or entity, private or govern-
mental, claiming by, through, or under the City, including
without limitation its or their respective insurers, agents,
servants, employees, officers, directors, consultant, attorneys,
and representatives, does hereby covenant:
(a) That it and they, individually, collectively, or in any
combination, will forebear from asserting against, and never sue
for or look for satisfaction with respect to, TU Electric or
TUC, or both, in any capacity, whether individually, as Project
Manager or otherwise, and the'.r respective insurers, agents,
servants, employees, officers, directors, shareholders, consul-
tents, attorneys, and representatives, past and present, and any
and all of their respective successors, subsidiaries, and
affiliates and their respective agents, servants, employees,
officers, directors, shareholders, consultants, attorneys, and
representatives, past and present, with respect to any Subject
Claim (including without limitation any Subject Claim against
any contractor, subcontractor, supplier, consultant, vendor, or
other person, firm, or entity in privity in any manner with any
of them which may therefor or as a result thereof have a right
over or Subject Claim in subrogation) in any manner involving,
concernin, arising out of, or relating to, the design,
construction, management, and licensing of, or any other matter
relating to, Comanche Peak and the management, procurement,
j conversion, enrichment, fabrication, shipping, transportation,
and storage of the Fuel.
(b) That neither it nor they, individually, collectively, or
in any combination, will directly or indirectly challenge, con-
test, or assert any complaint in any court or before any admini-
strative agency or body or in any other forum whatsoever with
respect to, or in any manner involving, concerning, arising out
of, or relating to, Comanche Peak and the incident and attributes
thereof including, without limitations (1) the design, construc-
tion, management, and licensing of Comanche Peak, or any other
aspect thereof, (2) the coats and schedule of construction and
completion of Comanche Peak, (3) the reasonableness, prudency,
or efficiency of the planning, desi n, construction, management,
and licensing of Comanche Peak, (4~ the costs of construction
and the schedule of construction and completion of Comanche
Peak, (5) the reasonableness, prudency, or efficiency of the
management, procurement, conversion, enrichment, fabrication,
chipping, transportation, and storage of the Fuel, (6) the costs
incurred in connection with the management, procurement,
conversion, enrichment, fabrication, shipping, transportation,
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and storage of the fuel, (7) the breach of the JOA and any
express or implied warranties arising out of the JOA, (8) any
representation, misrepresentation, disclosure, or non-disclosure
in connection with the negotiations, or preceding the execution
of the JOA, (4) in connection with the performance or nonper-
formance by TU Electric 'of its duties, responsibilities, or
obligations under the JOA as Project Manager or otherwise, (10)
the failure of TU Electric to pursue any remedies, either at law
or otherwise, that may be, or may have been, available against
any and all contractors, subcontractors, suppliers, consultants,
vendors, or others with respect to Comanche Peak (including
s
(1 on account eparately the Station, Fuel, or Transmission Facilities), and
occurred, in whole o or in anything with that
reshas occurred or pect to Comanche Peak (have
ins
eluding separately the Station, Fuel, or Transmission Facilities)
11 E and the incidents and attributes thereof, and any of the fore-
going whether known or unknown.
{
V. EXCEPTIONS TO RELEASE, COVENANT NOT TO
SUE, AND AGREEMENT NOT TO CHALLENGE
The City specifically does not release, and specifically
does not covenant not to sue with regard to, and specifically
does not agree to not assert, challenge or contest with regard
to:
I
(a) Any Subject Claims arising out of or under the Agreement
or any of the other agreements or instruments delivered by TU
Electric pursuant to the Agreement.
` (b) Any Subject Claims which could not have been brought in
J the Pending Litigation and which accrue on or after the Date of
Commercial Operation (as that term is defined in the JOA) and
which are based upon the acts or omissions of TU Electric or the
Project Manager other than acts or omissions in connection with
the planning, design or construction (or the management thereof)
of Comanche Peak.
(c) Any defenses which the City has or may have to Subject
Claims asserted against the City by any persons or parties whom-
soever, provided that the City may not seek any type of affir-
mative relief hereunder against TU Electric, TUC, or both, their
successors, subsidiaries and affiliates, or its or their respec-
tive insurers, agents, servants, employees, officers, directors,
shareholders, consultants, attorneys and representatives.
(d) Any counterclaims which the City has or may have against
any party other than TU Electric, TUC, or both, their successors,
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PAGE S
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subsidiaries and affiliates, or its or their respective insurers,
agents, servants, employees, officers, directors, shareholders,
consultants, attorneys and representatives, acting in such
capacity, with respect to any Subject Claims being asserted
against the City by anyone other than TU Electric, TUC, or both,
their successors, subsidiaries and affiliates, or its or their
respective insurers, agents, servants, employees, officers,
directors, shareholders, consultants, attorneys and
representatives.
I EXECUTED this the day of ~"/d.L, 1988, as duly
authorized by Ordinance No. 98 '(9s finally passed and approved
on the lst day of March, 1988.
THE CITY OF DENTON
I
BY:
ELL
CITY MANAGER
E
ATTEST:
.71YERIWALTERSO CITY SECRETARY
APPROVED AS TO LEGAL FORM:
DEBRA A. DRAYOVITCH, CITY ATTORNEY
III ~ BY:
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City of Denton City Council Minutes O 9
March 1, 1988
Page 9
J. The Council considered adoption of an ordinance
of the City Council of the City of Denton, Texas, making
certain findings relating to and involvirg the project of the
Texas Municipal Power Agency known as t1.e Comanche Peak Steam
Electric Station and associated facilities] authorizing the
execution and delivery of a release and covenant not to sue
with respect to said project and the joint ownership agreement
to which said agency is a party: consenting to, approvin
a
and uthorizing and ratifying two agreements between said agency
and joint ownership utilities ag eElectric e ent and Company electric concerning said
generateon at
asaid project) its execution any each claim of against
said said
agreements between said agency and Texas Utilities Electric
Company: approving the withdrawal, under certain condition, of
said City's approval of said projects making certain
kj representations and warranties: agreeing to be bound by, and to
comply with, the notice and other requirements set forth in an
assumption and indemnity agreement executed by Texas Utilities
Electric Company: authorizing the delivery of certain
certificates of the City Secretary: and providing for an
effective date of this ordinance.
The following ordinance was considered:
ORDINANCE NO. 88-051
i
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
DENTON, TEXAS, MAKING CERTAIN FINDINGS RELATING TO AND
INVOLVING E PROJECT TEXAS MUNICIPAL POWER
COMANCHE PEAK STEAM ELECTRIC
STATION AND ASSOCIATED FACILITIES: AUTHORIZING THE
EXECUTION AND DELIVERY OF A RELEASE AND COVENANT NOT
~J TO SUE WITH RESPECT TO SAID PROJECT AND THE JOINT
OWNERSHIP AGREEMENT TO WHICH SAID AGENCY IS A PARTYP
CONSENTING TO, APPROVINGF AUTHORIZING AND RATIFYING
TWO AGREEMENTS BETWEEN SAID AGENCY AND TEXAS UTILITIES
E
LECTRIC COMPANY CONCERNING SAID PROJECT AND JOINT
OWNERSHIP AND ELECTRIC AND ENERGY
GENERATED ATRSAIDNPROJECT:H RELEASING A YW CLAIM AGAINST
SAID AGENCY ON ACCOUNT OF ITS EXECUTION OF EACH OF
SAID TWO AGREEMENTS BETWEEN SAID AGENCY AND TEXAS
UTILITIES ELECTRIC COMPANY: APPROVING THE WITHDRAWAL,
U
SAID NDER CERTAIN CONDITIONS, OF SAID CITY'S APPROVAL OF
WARRANTIES,~CAGRELING FAKING TO CBETBOUND REPRESENTATIONS
BY ESANDA TON COMPLY
WITH, THE NOTICE AND OTHER REQUIREMENTS SET FORTH IN
AN ASSUMPTION AND INDEMNITY AGREEMENT EXECUTED BY
TEXAS UTILITIES ELECTRIC COMPANY: AUTHORIZING THE
DELIVERY OF CERTAIN CERTIFICATES OF THE CITY
SECRETARY! AND PROVIDING FOR AN EFFECTIVE DATE OF THIS
Ii ORDINANCE.
I
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1 O City of Denton City Council Minutes
March 1, 1988
Page 10
Alexander motion, McAdams second to adopt the ordinance. on
roll vote, McAdams "aye," Alexander "aye," Hopkins "aye,"
Gorton "aye," Ayer "aye," Boyd "aye," and Mayor Stephens
"aye." Motion carried unanimously.
K. The Council considered adoption of an ordinance
calling and ordering an election to be held in the City of
Denton, Texas, on May 7, 1988, for the purpose of electing
Council Members to the City Council of the City of Denton,
Texas to rdering that the 5 punand 6 ch card and electronic voting system )adopted electing a Mayor to by Denton County be used
in said election) designating voting
o
places and appointing election officialst providing for
election supplies= providing for notice of said elections and
providing of an effective date.
I The following ordinance was considered:
NO. 88-052
AN ORDINANCE CALLING AND ORDERING AN ELECTION TO BE
HELD
PUIN THE RPOSE COFY ELOF DENTON, TEXAS$, ON MAY 7j ECTING COUNCIL MEMBERS TO )
THE THE CITY
COUNCIL OF THE CITY OF DENTON, TEXAS TO PLACES 5 AND
SYSTEM ADOPTED BYH DENTON
PUNCH CARDTELECTRONIC VOTINGPLACE
APPOINTINGIDELEC ION ELECTION OFFICIALS)1 PROVIDING
PLACES ANDUSED
FOR ELECTION SUPPLIES; PROVIDING FOR NOTICE ELECTIONS AND PROVIDING FOR AN EFFECTIVE DATES OF SAID
Gorton motion, McAdams second to adopt the ordinance. on roll
vote, McAdams "aye," Alexander "aye," Hopkins "aye," "Gorton
"aye," Ayer "aye," Boyd "aye," and Mayor Stephens aye.
Motion carried unanimously.
5, Resolutions
A, The Council considered approval of a resolution
andrthe Town oft Ponderlforrthee impoundment the disp sition tof
dogs and cats.
The following resolution was considered:
NO. R88-016
A RESOLUTION APPROVING AN INTERLOCAL AGREEMENT BETWEEN
THE CITY OF DENTON AND THE TOWN OF PONDER FOR THE
IMPOUNDMENT AND DISPOSITION OF DOGS AND CATS AND
DECLARING AN EFFECTIVE DATE,
LM
~INw~4C pM'4v4~
CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
1, the undersigned, City Secretary of the ;ity of Denton, Texas,
DO HEREBY CERTIFY as follows:
That on the 15th day of se embe ,1987':, the City
n 1.
~ Council of the City of Denton, Texas, convene in ° Lne -duly sconstituted
regular meeting place in the City Hall of said C y;
members of the Council being as follows:
Mayor Ray Stephens Council Member Randall Boyd
Council Member Bub Gorton
Tem i i Mayor Pro Linnie McAdams Council Member Jane Hopkins
i { Council Member Jim Alexander
II Council Member Hugh Ayer exce
the all of said persons were present at said
Amongtother business considerednat
sa meeting, the M.O.- Hance ent tied: j
E
87-153
i
E
was introduced and submitted to the Council for passage and adoption. After
presentation and due consideration of the ordinance, and upon a motion made by
ordinance
_~ian and seconded by McAdams x --reading the
was Cu y passe an a opted on the firibcX;e theefollowin9 vote:
~ Council to be voted effective immediatelypMxdarysx by
"For" ______voted "Against" ,_Q..abstalned
all as shown in the official Minutes of the Council for the meeting held on
the aforesaid date.
I
I.
i
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2. That the attached ordinance is a true and correct copy of the
original on file in the official records of the City; the duly qualified and
acting members of the City Council of the City on the date of the aforesaid
meeting are those persons shown above and, according to the records of my
office, advance notice of the time, place and purpose of the meeting was given
to each member of the Council; and that said meeting, including the subject of
the entitled ordinance, was posted and given in advance thereof in compliance
with the provisions of Article 6252-17, Section 3A, V.A.T.C,S.
k IN WITNESS WHEREOF, I have hereunto signed my name officially and
affixed the seal of said City, this the day of ~1gy_ ,
XJ
1988.
City r ary a EN
City f enton, Texas
1 (City Seal)
,4
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Er fi.
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bj
8 6 1973L
NO.
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF DENTON APPROVING
AN AMENDMENT TO THE POWER SALES CONTRACT BY AND BETWEEN TE"AS
MUNICIPAL POWER AGENCY, THE CITIES OF GARLAND, DENTON, BRYAN Ai-P
GREENVILLE, AND PROVIDING FOR ITS EXECUTION ON BEHALF OF THIS
CITY; ENACTING OTHER PROVISIONS INCIDENT AND RELATED TO THE
PURPOSE OF THE ORDINANCE; REPEALING CONFLICTING ORDINANCES OR
{ RESOLUTIONS; AND PROVIDING AN EFFECTIVE DATE.
~ a
WHEREAS, the City of Denton, Texas has executed with each of
the Cities of Bryan, Garland, and Greenville and Texas Municipal
Power Agency a Power Sales Contract dated September 1, 1976; and
h f WHEREAS, the Cities have various opportunities to construct
or acquire generation facilities, extremely limited In size and
scope, using alternative fuels which would provide economical
power and energy; and
WHEREAS, this governing body has and does hereby determine
that it is in the best interest for the City and its inhabitants
to approve the same; NOW, THEREFORE,
i
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS.,
SECTION r. That attached hereto and made a part hereof for
all purposes, is a copy of an amendment to the Power Sales
Contract.
SECTION 11. That the amendment to the Power Sales Contract
by an between the Texas Municipal Power Agency and this City,
the some being identical contracts between said Agency and the
Cities of Bryan, Denton, Garland, and Greenville, being attached
hereto, is hereby approved so long as such changes are not
substantial and do not affect the substantive Intent of the
document as attached hereto. The Mayor of this City is hereby
authorized to execute said contract as the act and deed of this
City and its governing body and may, upon the advice of the City
Manager and City Attorney, approve minor changes to the same so
long as such changes are not substantial and do not affect the
v substantive intent of the document as attached hereto.
i
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SECTION III. All ordinances or other actions heretoiore
taken w c are or may be contrary to the provisions hereto or
the provisions of the amendment to the Power Sales Contract
authorized to be executed are hereby repealed.
SECTION IV. That this ordinance shall become effective
imme ate y upon its passage and approval.
PASSED AND APPROVED this the L4'd of, 1987,
T ENS yp`{---
l
f t
ATTEST:
jI
1
, CITY A
APPROVED AS TO LEGAL FORM:
j DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
BY:
II ~ 1
1 SR/
~PRaf r4a.:~
I
IfCF.ll 6~
YqM
AMENDMENT TO
POWER SALES CONTRACT
BETWEEN
TEXAS MUNICIPAL POWER AGENCY
AND
CITY OF BRYAN, TEXAS
CITY OF DENTON, TEXAS
CITY OF GARLAND, TEXAS
CITY OF GREENYILLE, TEXAS
This amendment to that certain contractthe made and entered Contract" by an
into as of the 1st day of September, 1976 a tsnnict al Corporation
between the Texas Municipal Power Agency, P
and political subdivision of the State of Texas herein called
"Agency" and the City of Bryan, the City of Denton, the City of
Garland and the City of Greenville, Texas each of which cities is
a municipal corporation of the State of Texas and a home rule
city herein collectively called "Cities" or individually called
"City".
j WITNESSETH:
WHEREAS, as of September 1, 1976, the Cities of Bryan,
Contract (the Texas Municipal pal Power Agency,
Denton, executed Garland a Power Sales Greenville
WHEREAS, the Cities have various opportunities to construct
or acquire small generation facilities, using alternative fuels
which would provide economical Power and Energy to each City; and
WHEREAS, the Agency has obtained the consent of Texas Commence
Bank Association and National Australia Bank to such amendment;
hereinwcontained, thelAgencyiandaeach Citytagr etas if llowstakings
la
Section 3(a) of the Contract is hereby amended to read as
follows:
Section 3: Sale and Purchase of Power and Energy
i
(a) During the time this Section is applicable to such City,
each City agrees as follows:
I (1) Each City shall purchase and receive from the Agency /
all Power and Energy which it shall require for the
operation of its electric system in excess of the
y....[A >FRIF✓
~•a
.r 89.
amount (t) supplied by those generation and transmission
facilities (in this subsection 3(a) called the "clause
(1) Facilities"), if any, owned by it on September 1,
1976, including, as parts of any clause (i) Facilities,
those generating and transmission facilities, if any,
under construction on such date, and improvements or
extensions of such generating facilities made or to be
made after September 1, 1976, which increase the Rated
Capacity of same so long as the increase during any
period of two successive Contract Years does not exceed
101 of the same's Rated Capacity at the beginning of such
period, provided the Cities and the Agency may, in
writing, waive such 101 limit, (ii) supplied from one or
more generation facilities (in this subsection 3(a)
called "clause (ti) Facilities"), if any, each of which
is primarily fueled from and the construction and
operation of which Is incidental to the disposal of solid
waste and which was or is constructed after September 1,
1976, and owned by one or more of the Cities, including,
as parts of any clause (ii) Facility, any transmission
facilities that are r:ecessary for the transmission of
Power and Energy therefrom, and (Ili) supplied from any
other generation facilities (in this subsection 3(a)
I called the "clause (iii) Facilities" and including, as
parts of any such clause (iii) Facilities, any
1 transmission facilities that are necessary for the
transmission of Power and Energy therefrom), if any,
i owned by the City which are acquired or on which
construction is begun after January 1, 1988, so long as
(A) the Rated Capacity of any one such clause (iii)
Facility does not exceed 3,000 kilowatts, (B) the City
does not, during the term of this Contract, own or have
an interest in two or more clause (iii) Facilities that
have a combined Rated Capacity in excess of S,000 kilo-
watts, and (C) no clause (iii) Facility is fueled by
lignite, coal, natural gas, oil, nuclear fuel, or any
purchased fuels; and provided that each City stipulates
and agrees with the Agency that Power and Energy
generated by clause (lit) Facilities shall not be taken
into or transmitted through any of the City's transmission
lines or used by the City for the operation of its
electrical system except to the extent expressly permitted
under the provisions of subsection 3(A)(4) below.
(2) Each City binds itself to pay for all Power and Energy
purchased or otherwise acquired by it from the Agency
pursuant to this Section 3, said payment to be made at
the rates and charges established pursuant to Section 7
of this Contract.
(3) Notwithstanding the foregoing provisions of subsection
3(a)(1) above, each City reserves and shall have the
PAGE 2
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aa:naew~
90
right to purchase or exchange Power or Energy (i) on an
emergency, maintenance, or stand-by basis or (ii) on the
basis of economic dispatch between the Cities and Brazos
Electric Power Cooperative, Inc. (Brazos), or any one or
more of such entities or (iii) under the existing pooling
agreement between the Cities and Brazos and future
pooling agreements among the foregoing and others, all,
or any combination thereof, and the Agency; provided that
each City stipulates and agrees with the Agency that
Power and Energy generated by clause (111) Facilities
shall not be purchased, exchanged, taken into or trans-
mitted through any of the City's transmission lines or
f used by the City for the operation of its electrical
system except to the extent expressly permitted under the
provisions of subsection 3(a)(4) below.
(4) Each City agrees that Power and Energy generated by
clause (iii) Facilities (regardless of which City owns
such clause (iii) Facilities) shall not be taken into or
transmitted through any of such City's transmission lines
or used by such City for the operation of its electrical
system or exchanged or sold by such City to any other
City or other entity except as follows:
I ~
(1) Power and Energy generated by clauso (iii) Facil-
ities may be taken and used by a City pursuant to `
this subparagraph (I) to the extent, and only to
the extent, required to supply the excess, if any,
of the City's requirements for Power and Energy at
any time above the maximum amount of Power and
Energy which is then available or could then be
made available (if requested) from the Agency to
supply such requirements; or
(I1) Power and Energy generated by clause (Iii) Facil-
ities may be taken and used by a City pursuant to
this subparagraph (II) during any month to the
extent, and only to the extent (if any), that the
City reduces the amount of Power and Energy which
would otherwise have been taken and used by the
city during such month as authorized In subsection
3(a)(1) or subsection 3(a)(3) hereof from then
existing clause (i) Facilities or clause (ii)
Facilities which are capable of generating such
Power and Energy at a cost to such City equal to or
less than the cost of such Power and Energy If it
had been purchased from the Agency; or
(111) A City which owns or operates clause (iii) Facil-
ities may generate Power and Energy In such
facilities and transmit same through its trans-
mission lines to the extent, and only to the
! PAGE 3
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~K~UYY! YYQ( Vy
91 ..r
extent, that such City or other Cities are auth-
orized and permitted to use such power and Energy
for the operation of its or eslectrical
under the foregoing P
or subparagraph (I!) of this subsection 3(a)(4).
City stipulates and acknowledges that the purpose and
Each C ara ra hs (I), (11) and (III) are to
intent of the foregoing subp g P th while a City cakes and
insure and require that, during any monone or more clause (iii)
d generated from any
uses Power anEnergy purchased and received END
Powe and ncyr during esuch month will never be
Facilities, the amount of e
by such City from the Ag purchased
` f } reduced b0ow the amount thereof whe chAgewould ncy if have e clause
and received by such City of the Cities.
Facilities were ever owned or constructed by any
{ II.
ovisions, conditions, and obligations of
All other terms, pr
cities and the E.;ency shall re■ dinin
the contract between the and said contract and the Ame
full force and effect, ther as a single contractual
Agreesent shall be construed toge 1
agreement.
f ) IN WITNESS WHEREOF, the parties hereto have caused this
f Amendment to be executed their
by the orproperamoEEicer tduly
corporate seals affixed,
f the day and year first hereinabove
authorized thereunto, as o
written.
TEXAS MUNICIPAL POWER AGENCY
J~
BY
ATTEST:
By l
I
CITY OF BRYAN, TEXAS
I
'll 'y BY: _
PAGE 4
92
ATTEST:
BY:
SECRETARY
CITY OF DENTON, TEXAS
BY:
MAY OV 0-
ATTEST:
1
By 0.,
k
CITY OF GARLAND* TEXAS'
r
1
i
BY:
14AYOR`
ATTEST:
{
i
BY:
SECRETARY
CITY OF GRFENVILLE, TEXAS
BY:
MAYOR
ATTEST:
i
i
BY:
SECRETARY
PAGE S
27]
City of Denton City Council Minutes
September 15, 1987
Page 11
Bob Nelson, Executive Director of Utilities, stated that there
was a need for an 8 1/21 increase in the water rates. Major
changes were the residential rates would go from $1.50/1,000 to
$1.65/1,000 which was a 71 increase. Commerical would go from
I 1.50 0 to $1.70 which was a 101 increase.
Hopkins motion, McAdams second to adopt the ordinance. On roll
vote, McAdams "aye," Alexander "aye," Hopkins "aye," Gorton
"aye," Ayer "aye," Boyd "aye," and Mayor Stephens "aye."
r~ Motion carried unanimously.
J. The Council considered adoption of an ordinance
authorizing the Mayor to execute an amendment to the power
sales contract between TMPA and the cities of Garland, Denton,
{ Greenville and Bryan.
The following ordinance was considered:
N0. 87-153
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF DENTON
I APPROVING AN AMENDMENT TD THE POWER SALES CONTRACT BY
I AND BETWEEN TEXAS MUNICIPAL POWER AGENCY, THe CITIES
OF GARLAND, DENTON, BRYAN AND GREENVILLE, AND
PROVIDING FOR ITS EXECUTION ON BEHALF OF THIS CITY
ENACTING OTHER PROVISIONS INCIDENT AND RELATED TO THE
PURPOSE OF THE ORDINANCE! REPEALING CONFLICTING
ORDINANCES OR RESOLUTIONS; AND PROVIDING AN EFFECTIVE
DATE.
Hopkins motion, McAdams second to adopt the ordinance. On roll
vote, McAdams "aye," Alexander "aye," Hopkins "aye," Gorton
"aye," Ayer "aye," Boyd "aye," and Mayor Stephens "aye."
Motion carried unanimously.
6. Resolutions
A. The Council considered approval of a resolution
approving a year-end budget adjustment for FY 1986-87.
f ` The following resolution was considered:
i RESOLUTION NO. R87-052
A RESOLUTION APPROVING BUDGET ADJUSTMENTS FOR FISCAL
YEAR 1986-871 AND DECLARING AN EFFECTIVE DATE.
Lloyd Harrell, City Manager, stated that this was a
housekeeping matter which was done at the end of each fiscal
year which balanced all of the City's accounts.
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Ir Yrxs
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Q'X Y r!Ne. d 6r ".'i.M1'~
FROM TMPA CAPLO_Y TX. 08,18%88 16:42 P. 2
RESOLUTION NO. 88-7-10
A RESOLUTION BY THE BOARD OF DIRECTORS OF THE TEXAS MUNICIPAL
POWER AGENCY ('AGENCY") ESTABLISHING GUIDELINES FOR THE
INVESTMENT OF PROCEEDS FROM THE SETTLEMENT OF LITIGATION
BETWEEN THE AGENCY AND THE TEXAS UTILITIES ELECTRIC COMPANY
(dTU ELECTRIC') CONCERNING THE COMANCHE PEAK STEAM ELECTRIC
STATION AND THE PURCHASE BY TU ELECTRIC OF THE PURCHASED
ASSETS; DELEGATING AUTHORITY TO INVEST SAID PROCEEDS%
AUTHORIZING THE PURCHASE OF OUTSTANDING AGENCY DEBT BY OPEN
MARKET PURCHASES AND TENDER OFFERS.
WHEREAS$ pursuant to the Agreement between the Agency and TU Electric
dated February 12, 1988 (the "Settlement Agreement"), TU Electric has agreed
to acquire from the Agency the Purchased Assets and to make certain payments
to the Agency as specified in the Settlement Agreement (capitalized terms not
defined herein shall have the meaning given them in the Settlement Agreement
or the Agency's Bond Resolutions, as appropriate):
WHEREAS, other funds of the Agency currently on hand in the Bond Fund,
Reserve Fund, and/or Construction Fund identified for the payment of Comanche
Peak related costs and for the payment or security of Agency debt related to
Comanche Peak will become available for use for other purposes (hereinafter,
the "Funds on Hand");
WHEREAS, pursuant to the terms of the Settlement Agreement, the Agency
will receive from TU Electric certain payments as specified therein (the
"Proceeds');
Jl WHEREAS. it is necessary to establish certain guidelines regarding the use
of the Proceeds and the Funds on Hand (collectively, the "Available Funds")
and to deleg0ate authority to deal with the Available Funds in accordance with
those guidellnesi
NDW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE TEXAS
MUNICIPAL POWER AGENCY;
1, That the above recitals are true and correctl
2. That the Proceeds, immediately upon receipt by the Agency, shall be
deposited into the Revenue Fund, and then to a separato construction
fund the "SRA construction fund"), establishment of which is hereby
j authoritedl
1, That Proceeds, whild in the SRA construction fund, shall be used only
for in Approved Project or a Development Projectl otherwise, the
Proceeds shell not be moved out of the SRA construction fund without
further authorisation of this Boardl
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FROM TMPA CARLOS, TX. 09/19/68 16:43 P. 3
RESOLUTION NO. 68.7-10
AUGUST 16. 1988
PAGE -2-
4. That the ',rm,ilable Funds shall be invested in accordance with
existing Agency investment policies and procedures. The following
objectives shall apply to the investment of the Available Funds, in
the order of priority:
(i) cMinimization of onstruction costs in thecAgancy's rates o for Power and Energy/
(i1) Maintenance of levelited annual debt service; and
(iii) Lowering of overall Agency debt service.
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Proceeds shall have the provision for construction needs as the first
priorityl
~ I S. That it is recognized that Available Funds may be invested in
Investment Securities which are tax-exempt obligations. Proceeds
11 nue Code invested of 1954. nas amendedeandiSecteonti148 of Internal internal
sh, be Reve
Code of 19661 as amendedl
6. That, upon the determination of the Director of Financial Services
that a rtoin funds in the Construction Fund are no longer needed to
pay Coma.che Peak related costs, or to pay for the payment or deb mayube transferred by the Gsaid eneralnManagerlto themBondnFundt
Hand and
T. TbAS.th~ GRDBCi1,.~1~gA4Rr..1i.A~.~.hgJlzfO. t9, g}ll'Si19j9.xith,.AY~j.)~D)9
1 ecti t
said urchases his authority in conform Generale Managereshall & Ktendstouthe making vof
t' at a time certain
tender offers urchase
price, blocks
of c ide tified n8ndsi
for a pre
8. That the General Manager of the Agency shall report quarterly to this
Board on the source and uses of Available Funds and the impact of
! this settlement program on the Agency's Debt structure and annual
Debt Servicel
9. That this Resolution shall not be effective until the Initial
Closingl if there is no InitiaA Closing, then this Resolution shall
Iva 1Aa1'W A0V4'Ti'AA n9S4no ana aetermineo trot tors meeting OT the
Board of Directors of the Agency is open to the public as required by
law and a public notice of the time, place and subject matter of said
meeting was given as required by law.
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FiOM TMPA CAf2L05, TX. 08iI9i8B 1644 P. 4
RESOIUYION ND. 88-7-10
AUGUST 16o 1988
PAGE -3-
PASSED AND APPROVED this 16th day of August, 19884
arv n a e, res ent
Board of Directors
Texas Municipal Power Agency
( I a
ATTEST:
Roland a e, ecre ary
E Board of Directors
Texas Muntclpai Power Agency
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FROM TMPA CARLOS, TX. 02/13/88 12:10 P. 3
t
WA AM 181 ELBC IC AMWUWX
88T1IANW CF OWBOM PEAK LnMWrCN
(Not to be used before approval
of settlement by TWA on
G February 12, 1988)
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Thr I)-YAm Fhmiri 1 Pnwr r
M Arn`Y (^7MPA") nnrl tt>P 'Iprrrr I1t111tiss R1ertrlr
Company ("TU Electric") have reached an agreema+nt to settle the lawsuit
currently pending between the two concerning the omstruction and liQmaing of
the COMAnche Peak nuclear power plant under eonrtruotion nur Glen Rose,
Texas, about 75 miles southwest of Fort %brth. This Agreement was approved
this week by the TU Electric's Board of Directors and today by the WA Board.
Pursuant to the settlement agreemmnt approved today, 1V Electric has today
paid TWA $58,680,587,00. On the initial closing date, which is expected to
be in the fall of 19680 TU Electric will pay to TWA the additional amount of
$51,873,000.00, plus an incremental amount to be determined at closing based
on the data of closing. At the same time, TWA will convey to TU electric a
portion of 7WA'a interest in the plant, related fuel and transmission. Every
i six months thereafter for five years, TU Electric will pay to DWA
$45,417,631.75, and TEA will convey to TU Electric a portion of TWA's
remaining interest in the plant. At the end of the five year period, TWA
will no longer own any portion of CdtwdA Peak.
As a part of the settlement effective
~ today, TWA and TU 81ectriA have
agreed to halt further activities in the litigation, At the initial closing
f the parties will dismiss the claims pending against each other.
Also as part of the settlement, TWA will no longer be required to make
any payments to TU electric with regard to Comanche Peak,
Ibis settlimt is subject to the approval of both the Nuclear Regulatory
Commission and the Texas Public Utility Oannission,
The costs of Comanche Peak have not been included in TWAOs charges to its
eustcrers. Currently, WA plans to use the proceeds of the settlement to
retire outstanding debt associated with the plant.
Ed Wagoner, General Manager of TWA said, "This settleiwm S.s in the beet
interests of both parties. THPA will be able to dispose of its interest in
Comanche Peak and begin to plan for sources of power other than nuclear
generation for itself and its Mwber Cities of Bryan, Denton, Garland and
Greenville. TV &tectric will acquire an additional interest in the plant at a
fair and reasonable cost. Pinally, the settlement will allow both conpanim
to end the costly and time-oonsuning litigation between them."
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TEXAS MUNICIPAL POWER AGENCY
MEMORANDUM
TO: TMPA Board Members December 2, 1936
& City Managers
FROM: Ed Wagoner
SUBJECT: Status of Comanche Peak
The purpose of this iemo is to summarize major ^vents of the last few months
in the areas of Comanche Peak litigation, licensing, and construction.
1. LITIGATION
Currently there are three suits pending involving the design,
construction, and licensing of Comanche Peak. The first suit was filed
by the Texas Utilities Electric Company (TUEC) against TMPA, Brazos
Electric I'Zwer Cooperative, Inc. and Tex-La Electric Cooperative of
Texas, Inc., in Dallas, County. Subsequent to that suit, TMPA and
Tex-La joined together and filed suit against TUEC and the Texas
Utilities Company (TUC) in Travis County. Brazos also at that time
filed an independent action against TUEC, TUC, and other related
companies in Travis County. TMPA and Tex-La subsequently agreed to a
Motion to Stay the Travis County action filed by TUEC. As a result,
that action has been stayed indefinitely. The stay was agreed to on
procedural grounds, and is no reflection upon the merits of our case. sl
TMPA, Tex-La, and Brazos (Defendants) filed a Motion to Transfer Venue
in the Dallas County action which was denied. The Defendants have also
~J filed counterclaims against TUEC and TUC in the Dallas County action
similar to the claims alleged by the Defendants in the Travis County
action.
The Dallas County action is being heard before Judge John Marshall. In
September, Judge Marshall entered a Discovery Order in that action
providing for discovery between the parties on an expedited basis.
1 Interrogatories and Requests for Admission are to be answered in 14
days. Depositions may be taken on three days notice. In connection
with a Request for Production filed by the Defendants seeking the major
part of 1UEC`s Comanche Peak documents, Judge Marshall gave TUEC four
s.onths to respond. Those documents are due from TUEC on February 13,
1981. The Defendarts have taken the depositions of the Unit I Project
Manager and TUEC's Records Manager for Comanche Peak. Other
depositions are planned for coming months. TUEC has also filed a
Request for Production with us. We are currently in the process of
responding to that.
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In this type of litination, expert witnesses play a very important
role. We are in the process of interviewing various experts who may
serve as testifying or consulting experts. Also, document organization
is a major task. We have hired a computerized litigation support firm
to organize the millions of documents involved in this suit.
It is apparent that Judge Marshall will be aggressively pushing this
suit to a conclusion. He has set a tentative trial date of September,
1987. We are working very hard to be ready for trial at that time.
lI. LICENSING
Before operation of Comanche Peak, TUEC and the other applicants are
required to get an operating license from the Nuclear Regulatory
Commission (NRC). The Atomic Safety and Licensing Board (ASLB), an arm
of the NRC, is a quasi-judicial body which is presiding over the
licensing hearings. Decisions of the ASLB can be appealed to the
Atomic Safety and Licensing Appeal Board (ASLAB), then to the NRC
itself, and then to the United States Court of Appeals for the DC
Circuit. There are currently three parties in the ongoing licensing
I proceedings. These are: (1) Applicants (TUEC, TMPA, Tex-La, and
Brazos); (2) the NRC staff; and (3) the Citizens Association for Sound
{ Energy (CASE), the intervenor. In order to resolve the outstanding
j concerns over the quality of the design and construction of the plant
which have been raised over the past several years, TUEC formed the
Comanche Peak Response Team (CPRT), which was to conduct a massive
reinspection and reanalysis of the plant. The ultimate product of the
CPRT will be 51 individual Results Reports, which will serve as the j
j basis for the licensing hearings. The CPRT has recently completed all _
of its physical reinspection work. It is now in the process of
analyzing the results and writing reports. TUEC expects that half of
the 51 Results Reports will be issued by the end of this year, c
CASE is contesting the adequacy of the CPRT Program Plan itself. TUEC
expects that sometime in early 1987 the ASLB will rule on whether the
adequacy of the CPRT Program Plan itself should be litigated. If it is
determined that the adequacy of the Plan itself need not be litigated,
J then the ASLB will proceed to litigate the results of the Plan.
In January, 1986, after TUEC discovered that the construction permit
for Unit I had lapsed, the NRC granted an extension of that permit.
CASE and another intervenor appealed the issuance of that extension.
One appeal is pending in the United States Court of Appeals for the
D.C, Circuit. In another appeal, the ASLB ruled that the issue of
whether good cause existed for the construction permit extension would
be litigated. The NRC staff and TUEC have appealed that ruling to the
ASLAB. If TUEC is successful in that appeal, then good cause for the
issuance of the extension will not be litigated. That appeal is
currently pending, and a decision is expected shortly.
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II1. CONSTRUCTION
CoAccording
dins sr 80185% complete. [ TUECrecently essentially announced ea
new cost estimate and construction schedule for Comanche Peak. The
previous estimate, issued in November 1985 provided for commercial
operation of Unit I in mid-1987, with a total cost for Comanche Peak,
including capitalized interest, of $5.46 billion. That schedule was
withdrawn by TUEC in April 1986. Subsequent to that withdrawal, TUEC
announced that Unit 1 would not be ready for commercial operation by
the summer peak of 1988. In the recent announcement, TUEC stated that
commercial operation for Unit I would be achievable in early 1989.
Commercial operation for I+nit II would not be achievable in time for
~l the summer peak season oi 1989. The total cost of Comanche Peak,
excluding capitalized interest, is estimated by TUEC to be $5.27
billion. ) previous cost estimates, TUEC has estimated
capitalizeinterest interest and the capitalized Interestof TMPA, Tex iLa, and
8razos. This new cost estimate does not include capitalized interest
because TUEC stated that as a result of uncertainty about future
payments from the three minority owners, TUEC was unable to estimate
capitalized interest for the minority owners. IMPA`s share of the
j Comanche Peak costs, excluding capitalized interest, is estimated to be
$326 million.
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The CPRT Reinspection Plan has been expanded several times In the past
because of the number of defects found in particular areas. TUEC
stated that should it be necessary to expand the reinspection effort
again, then the schedule may slip more. TUEC also stated that the
schedule may slip further in the event of unforeseen licensing delays. I
I encourage you to contact me should you have any questions about our c
involvement in Comanche Peak.
Ed Wagoner
General Manager
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Texas Municipal Power Agency
MEK0RAMDUK
TO: City Managers, Member Cities DATE: January 24, 1985
FROM: Ed Wagoner, General Manager
SUBJECT: Comanche Peat: Cost and Schedule Change
Texas Utilities Electric Company released a revised cost estimate and schedule
for the Comanche Peak project on Wednesday, January 23, 1985. I have attached
a series of questions and answers we have developed to be used in media
inquiries concerning these changes. Piet ;e do not hesitate to refer questions
to the Agency concerning this issue if necessary. The staff is continuing to
analyze the effects of these changes and I will keep you informed of the
results.
If you have any questions about this information, please let me know.
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Ed Wagoner
General Manager j
ELW/wmc }
Attachment
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COMANCHE PEAK QUESTIONS
1. What is the total cost of Comanche Peak going to be when it
is completed?
A. $4.564,046,900 or about $1,930 per kilowatt based on the
estimates from Texas Utilities Electric Co. This new
cost estimate takes into account the cost of money used
to finance the Plant, expenses that will be incurred
while operation is delayed and other costs that were not
anticipated when the last estimate was made.
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2. When is Comanche Peak going to come on line?
A. Unit One is expected to be in commercial operation in
January, 1986. Unit Two is scheduled, with an
approximate 18 month interval, to be in commercial
operation in mid-1987.
3. Why is the Plant delayed?
A. Several areas covered in reports filed by the Nuclear
Regulatory Commission Staff need further review. The
Texas Utilities Generating Company Staff and consultants
~ are preparing additional responses to questions that
( have developed from the licensing hearings. All of
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these items must be examined prior to licenses being
granted to load fuel and operate the Plant. TMPA and
the other owners are committed to the safe construction
and operation of Comanche Peak and are dedicated to
fully satisfying the NRC's concerns.
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4. What will the Cities do for power since the Units at Comanche
Peak are delayed?
A. The Cities will continue to use the most economical nix
of units available from the power pool at all times.They
have sufficient capacity to supply the load and required
reserves until Comanche Peak is completed.
5. How much is this increase going to cost the Cities?
A. The additional funds required to construct the Comanche
Peak Plant will come from additional firancing by the
Agency. Therefore, tl.e cost will be sptaad over the
life of the Punt. This increase will represent about a
8.6% increasi in the average annual cost of power from
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Comanche Peak once both Units are on-line.
6. Will this cost increase and schedule change make Comanche
Peak uneconomical?
A. Obviously these changes erode some of the benefits the
f Cities were expecting when TMPA became a joint owner in
the project. However, the estimated cost of energy from J
Comanche Peak still compares favorably with the
Cities other alternatives.
7. Can you give an example of what you mean?
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A. Yes. The estimated cost per kilowatt-hour from Comanche
Peak is estimated to be 5.919 cents in 1988. Comparable
costs for a lignite unit, such as Gibbons Creek, is
j estimated to be 6.441 cents/KWH in 1988. A
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kilowatt-hour from a gas plant would be 7.290 cents in
1988.
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8. How does this compare with similar nuclear units being
constructed around the country?
A. In a study prepared in December 1983 by a major
investment firm, Units then under construction varied
from 51,120/0 to $4,419/*? with an average of
approximately $2,542/KV.
9. Should TMPA withdraw from Comanche Peak?
A. No. Every study we have done has shown that our
l participation will provide long term benefits to our
Member Cities in fuel diversification and stability of
E
E operating costs.
10. When will the Agency have to secure financing for this
increase?
A. Current plans are for the Agency to secure additional
financing in the second half of fiscal year 1985.
It. Are these the final cost estimates?
A. These figures are based on the best information
available. We are committed to achieving the highest
level of safety at Comanche Peak. This means taking the
time necessary to resolve the issues before us and is
the reason why there is uncertainty about the cost and
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schedule.
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Texas Municipal Power agency JIAV
MEMORANDUM AGEM FFiCE
TO: TMPA Board of Directors DATE: June 17, 1988
FROM: Ed Wagoner, General Manager
SUBJECT: Comanche Peak Settlement - PUC Approval
A hearing before the Administrative Law Judge (ALJ) of the Public Utility
Commission (PUC) concerning the approval of an amendment to TU Electric's
Certificate of Convenience and Necessity (CCN) allowing TU Electric to buy
back TMPA's interest in Comanche Peak began on Monday, June 13. Several days
before that hearing, discussions were held between TU Electric and the PUC
Staff in an attempt to reach a settlement of the issues in the matter. Before
the hearing began, a settlement to principle was reached between TU Electric
and the PUC Staff. TU Electric and the Staff agreed to sign a set of
stipulations regarding the issues which would preclude the necessity for a
hearing.
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Immediately after the hearing began on Monday, a recess was requested and
{ granted to allow all the parties to meet and attempt to reach a final
agreement. In addition to TU Electric and the PUC Staff, other parties to the
proceeding include the Office of Public Utility Counsel, Tex-La, and Brazos.
The Attorney General of Texas has also been allowed to participate on behalf
of several state agencies. However, the Attorney General has not yet been
admitted as a party. Discussions were held Monday to attempt to get the
agreement of the other parties to the stipulations previously worked out
between TU Electric and the PUC Staff. These discussions were recessed, and
then concluded on Wednesday. All parties to the proceeding have now agreed to
-J and signed the stipulations. Thus, a formal hearing before the ALJ will not
be necessary.
The next step is for the ALJ to write his Examiner's Report, which will then
be presented to the full Commission for entry of a final order on this matter.
The ALJ has informed us that he will try to have his report drafted in time
for a full Commission meeting by the end of July.
On a related matter, as you will recall, TMPA, prior to selling any interest
in real property, is required to publish notice of its intent to receive bids
for the property in the county or counties where this property is located.
Prior to selling its interest in Comanche Peak and the Comanche Peak-Parker
Switching Station Transmission Line back to TU Electric, TMPA is required to
publish notice in three newspapers in three different counties and to accept a
bid on those properties from TU Electric. Those notices have by now all been
published, and we have received TU Electric's sealed bid for our interest in
Comanche Peak. We `ave received no other bids for Comanche Peak. The
deadline for receipt of bids is July 5, and all bids will be opened on July 6.
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TMPA Board of Direct^rs
i June 17, 1988
Page -2-
The TMPA Board is scheduled to take action with regard to the bids at its next
meeting on July 14, 1988.
Please call me should you have any further questions.
4
Ed Wagoner
i General Manager
ELk/JB/sw
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