HomeMy WebLinkAbout2000-001ORDINANCE NO Awv—tMl
AN ORE INANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
APPROV NG AN INTERRUPTIBLE NATURAL GAS SALES AND PURCHASE
AGREETY ENT BETWEEN THE CITY OF DENTON AND TEXAS ENERGY TRANSFER
CO, LTD FOR THE PURCHASE OF SPOT MARKET NATURAL GAS, AUTHORIZING
THE EXP NDITURE OF FUNDS THEREFORE, AND PROVIDING AN EFFECTIVE DATE
(BID 243 -NATURAL GAS AWARDED TO TEXAS ENERGY TRANSFER CO, LTD, FOR
THE MO HLY CONSIDERATION FOR THE SPOT PURCHASE OF NATURAL GAS)
WHEREAS, the City has a need for interruptible natural gas purchases to provide fuel for
the Spencer Electrical Generating Station, and
WHEREAS, the City could realize price savings by purchasing gas on the spot market,
and I
REAS, the City has solicited bids for one year contracts with spot market suppliers
of natl gas, in accordance with Chapter 252 of the Local Government Code NOW,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SACTION I That it authorizes the Mayor to execute the attached Interruptible Natural
Gas Sale and Purchase Agreement with Texas Energy Transfer Co, Ltd providing for the
purchase of spot market natural gas
I That the City Manager is authorized to expend funds in accordance with
the terms f the Agreement
SECTION III That this ordinance shall become effective immediately upon its passage
and appr val /n
PASSED AND APPROVED this the A= day of 42000
JAC I ER, MAYOR
ATTEST
JENNIFER WALTERS, CIT, SECRETARY
n �
D AS TO LEGAL FORM
L PROUTY, CITY ATTORNEY
BY
2438
Standard
Contract
Standard Contract
City of Denton Utilities
Interruptible Natural Gas Sales And Purchase Contract Agreement
Date 11-18-99
Texas Energy Transfer Company, Ltd (SELLER) Limited Partnership Corporation
agrees to deliver and sell gas to the Citv of Denton, Texas (Buyer) and BUYER agrees to purchase
and receive said natural gas from SELLER pursuant to the terms and conditions hereinafter set forth
1. DEFINITIONS:
The term "Agreement" shall mean this Interruptible Natural Gas Sales and Purchase Contract
including Attachment A which is incorporated herein
The term "month" shall mean a calendar month
The term "WABtu" shall mean one million (1,000,000) British thermal units
The term "Receiving Pipeline" shall mean the interstate, intrastate, or local distribution
company immediately downstream of the Point Of Delivery
The term "Buyers Notice" shall mean the letter agreement a form copy of which is attached
hereto as Attachment A, which may be executed by BUYER and SELLER from time to time
and which shall bind BUYER and SELLER to particular transactions for the purchase and
sale of natural gas in accordance with the tetras thereof and this Agreement
The term "Point Of Delivery" shall mean the location of the physical delivery to the Receiving
Pipeline
2. TERM:
The initial term will be one year from the date hereof, and month to month thereafter, subject
to the right of either party to terminate this Contract on 30 day's prior written notice to the
other party
page 18
3. PRICE AND PAYMENT OF COSTS AND TAXES PRIOR TO DELIVERY:
On a monthly basis, the price to be paid by BUYER for gas delivered by SELLER shall be
specified on the "Buyers Notice" shown in Attachment A Prices shall include and SELLER
shall be responsible for payment of all royalties, production taxes, property taxes, severance
taxes, purchaser taxes, and all other taxes and license fees which attach to the gas prior to
delivery hereunder Prices shall also include and SELLER shall be responsible for payment
of gathering and transportation charges to the Point Of Delivery, payments or other charges
thereon applicable before the title of gas passes to BUYER at the Point Of Delivery BUYER
shall pay transportation charges on the Receiving Pipeline, downstream of the Point Of
Delivery
4. QUANTITY AND POINTS OF DELIVERY:
Gas quantities and points of delivery will be specified on a monthly basis on the "Buyers
Notice", as shown in Attachment A, signed by BUYER and by SELLER Requests for bids,
submission of bids, or preliminary correspondence will not act as a Buyers Notice and shall
not be the basis for gas deliveries under this contract SELLER shall deliver gas quantities
consistent with the quantity, Point Of Delivery, Receiving Pipeline, and dates as specified in
the "Buyers Notice" from the BUYER
5. BEST EFFORTS PERFORMANCE:
SELLER will make a best effort to deliver, and BUYER best effort to receive, the gas
quantities as specified in the Buyers Notice Either party may at anytime curtail or interrupt
service with no liability to either party The curtailing party will make diligent efforts to notify
the other party of the situation within 48 hours
6. INCREASES IN QUANTITY AND CHANGES TO POINTS OF DELIVERY.
BUYER may request increases to gas quantities or changes in points of delivery by specifying
these requests in a revised 'Buyers Notice" to the SELLER If accepted by SELLER,
SELLER shall snake all arrangements needed to revise deliveries within 24 hours If SELLER
wishes to increase gas quantities or change points of delivery, he must notify BUYER, and
receive a revised Buyers Notice signed by BUYER to do so
7. OVER -DELIVERIES
If SELLER provides gas quantities for a month in excess of 4% above the quantities in the
"Buyers Notice" or at points of delivery not specified in the 'Buyers Notice", BUYER shall
have the right to refuse the quantities of gas and shall be exempt from any payments on those
gas quantities SELLER shall be liable for any penalties or excess storage or transportation
charges owed by the BUYER as a result of the SELLERS deliveries in excess of 4% of the
Buyers Notice or at locations not specified in the 'Buyers Notice"
page 19
8. GAS AND PRICE UNITS:
All gas quantities and prices shall be in MMBtu adjusted to 14 650 psi, at a temperature of
60 degrees Fahrenheit, with both Mcf and Btu free of water vapor (Dry) Prices will be in
U S dollars
9. QUALITY AND PRESSURE:
The gas delivered by SELLER shall meet the pressure requirements and quality specifications
of the Receiving Pipeline
10. TITLE:
SELLER warrants for itself; its successors, heirs and assigns, title to all gas delivered and
accepted by BUYER hereunder SELLER warrants it has the right and lawful authority to
sell the gas and that such gas is free from liens, encumbrances and claims of every kind
SELLER shall mdemmfy and save BUYER harmless from all suits, claims, liens, damages,
costs, losses, expenses and encumbrances of whatsoever nature ansing out of claims of any
or all persons to said gas or the title of said gas SELLER shall be in control and possession
of and responsible for any risk of loss, damage, chum, liability or injury caused thereby until
the gas has been delivered to the BUYER at the Point Of Delivery Title and risk of loss shall
pass at the Point Of Delivery from SELLER to BUYER
11. DETERMINING PAYMENT VOLUMES:
On approximately the 15th day following the end of each month of gas deliveries, SELLER
shall furnish BUYER a statement specifying volume delivered, location, and Receiving
Pipeline If these volumes differ from BUYER's independent monitoring of deliveries or
Receiving Pipeline's records, BUYER shall have the right to pay on the undisputed amount
either (t) under protest, or (n) upon final agreement being made on the delivered volumes by
BUYER, SELLER and Receiving Pipeline BUYER and SELLER shall have the right to later
revise payment volumes as a result of additional or revised volumetric data from the
Receiving Pipeline or other companies associated with the production, sale, storage, or
transportation of the gas
12. PAYMENT
Within 12 days of receipt of the statement, BUYER shall make payment to SELLER for the
gas quantities as determined in Paragraph I 1 Payments statements should be directed to
BUYER at City of Denton Utilities
Electric Production Division
1701-A Spencer Road
Denton, TX 76205
Attn Phil Rennaker
Manager, Electric Production
page 20
13. NOTIFICATION:
Communications regarding the performance of this contract shall be directed to
EY:
1=1sY0:7
Texas Energy Transfer Company, Ltd
2838 Woodside
Dallas, TX 75204
Attn John Nolan, Partner
14. PERFORMING NOMINATIONS:
City of Denton Utilities
Electric Production Division
1701-A Spencer Road
Denton, TX 76205
Arm Phil Rannaker
Manager, Electric Production
BUYER will be solely responsible for nomination of gas volumes to the Receiving Pipeline,
unless SELLER is given specific written authorization from BUYER to perform these
nominations SELLER shall be responsible for all necessary nominations to transporters and
all others related to the supply of natural gas prior to Point Of Delivery
15. EXCHANGE OF GAS QUANTITY INFORMATION:
During the penod of actual gas deliveries, SELLER and BUYER shall make available to each
other current estimates of gas flows at the Pomt(s) of delivery under this agreement for the
purposes of nomination to others and the monitoring of actual gas quanuues delivered If
Seller is unable to provide current estimates of gas activity to BUYER, SELLER will assist
BUYER in obtaining said information from pipeline transporters, processing plant operators,
well operators, or upstream suppliers
16. GOVERNING STATE:
This agreement shall be construed pursuant to the laws of the State of Texas and venue for
its construction and enforcement shall lie in the courts of Denton County, Texas
SELLER
Texas Energy Transfer Company, Ltd
By its General Partner, TETC, Inc
By
Title Mackie McCrea, Attomey-in-Fact
Date 11-18-99
BUYER
City of Denton
sy GU
Title City Manager
Date 1-4-00
page 21
ATTACHMENT A
DENTON MUNICIPAL UTILITIES- SPENCER STATION
1701 A SPENCER ROAD
OENmN, TOLws 76205
Fax 940-349-7555
Date.
Firm Address
Dear
Below is a Buyers Notice for (month, year) supply to the City of Denton, Texas Under this
purchase the City of Denton, Texas, will take title to the gas at the point of delivery and be responsible
for payments subject to the terms of the purchase contract.
BUYERS NOTICE
GAS SALES AND PURCHASE AGREEMENT
Buyers Notice Number: Contract Date
BUYER: City of Denton, SELLER
Electric Production Division
All volumes and prices are based on mmBtu's, adjusted to 14 65 dry/dry
Prices are in U.S. dollars.
Dates for Point of Pipeline Volume Price
delivery delivery (MmBtu/ (S/mmBtu
14 65 D/D) 14 65 D/D)
Lone Star
Accepted and Agreed
(Seller)
Dated:
(Buyer)
Accepted and Agreed
Dated
To facilitate payment, please sign the above Buyers Notice and return via fax, attn Phil Rennaker
page 22