1995-023E:\WPDOCS\ORD\GAS.K
ORDINANCE NO. 3~----~__
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, AP-
PROVING AN INTERRUPTIBLE NATURAL GAS SALES AND PURCHASE AGREEMENT
BETWEEN THE CITY OF DENTONAND ENERGY TRANSFER CORPORATION FOR THE
PURCHASE OF SPOT MARKET NATURAL GAS; AUTHORIZING THE EXPENDITURE OF
FUNDS; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City has a need for interruptible natural gas pur-
chases to provide fuel for the Spencer Electrical Generating
Station; and
WHEREAS, the City may realize price savings by purchasing gas
on the spot market; and
WHEREAS, the City has solicited bids for one year contracts
with spot market suppliers of natural gas, in accordance with Chap-
ter 252 of the Local Government Code; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the City Council authorizes the Mayor to exe-
cute the attached Interruptible Natural Gas Sales and Purchase
Agreement with Energy Transfer Corporation providing for the
purchase of spot market natural gas.
SECTION II. That the expenditure of funds in accordance with
the terms of the Agreement is authorized.
SECTION III. That this ordinance shall become effective immed-
iately upon its passage and approval.
PASSED AND APPROVED this the ~'/ day of ~, 1995.
(/
JENNIFER WALTERS, CITY SECRETARY
BY: ., _
APP/~ED A~TO LEGA :
MICHAEL A. BUCEK, ACTING CITY ATTORNEY
Standard
Contract
Standard Contract
City of Denton Utilities
Intermptible Natural Gas Sales And Purchase Contract Agreement
Date: December 12, 199t~
Energy Transfer Corporation -'(SELLER) a Texas Corporation
a~ees to deliver and sell gas to the City 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 Intermptibte Natural Gas Sales and Purchase Contract
including Attachment A which is incorporated herein.
The term "month" shall mean a calendar month.
The term "MMBtu" shall mean one million (1,000,000) British thermal units.
The term "Receiving Pit~eline"..sh~lt mean the interstat4, intrastate, or local distribution
company immediately d0wns.trea{n_, of the Point 0fDelivery.
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 SF.I.LEK to particular transactions for the purchase and
sale of natural gas in accordance with the terms 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.
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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 tlfis contract. SELLER shall deliver gas quantities
consistent with the quantity, Point Of Delivery, Receiving Pipeline, and dates as specified in
the "Buyers Notice" fi.om the BUYER.
5. BEST EFFORTS PERFORMANCE:
SELLER will make a best effort to deliver, and q3UYER best effort to receive, the gas
q,,anfities as specified in the Buyers Notice. ~Either party may at any time 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 quantifies or changes in points of delivery by specifying
these requests in a revised "Buyers Notice" to the SELLER. If accepted by SFJ.LER,
SEIJ.ER shall make all arrangements needed to revise deliveries within 24 hours. If SELLER
wishes ~o increase gas quantities or'c.h, ange points of delivery, he must notify BUYER, and
receive a revised Buyers. Notice signed by BUYER to do so.
7. OVER-DELIVERmS
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".
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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 SI:.LLEK 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 indemnify and save BUYER harmless from all suits, claims, liens, damages,
costs, losses, expenses and encumbrances of whatsoever nature arising 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, claim, 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 SELLERt~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 (i) under protest, or (ii) upon final agreement being made on the delivered volumes by
BUYER, SFJ J.ER and Receiving Pipeline. BUYER and SF.I J .F.R 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 Parag[aph 11. Payments statements should be directed to
BUYER at: City of Denton Utilities
Electric Production Division
170 I-A Spencer Road
Denton, TX 76205
Attn: Jim Thune,
Manager, Electric Production
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13. NOTII~ICATION:
Communications regarding the performance of this contract shall be directed to:
SELLER: BUYER: City of Denton Utilities
Eneroy Transfer Corporation Electric Production Division
8080 N. Central Expressway _ tT01-A Spencer Road
Suite 1200 Denton, TX 76205
Dallas, TX 75206 Attn: JimThune,
Manager, Electric Production
14. PERFORMING NOMINATIONS:
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 sh~ll 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 INFORMA'IION:
During the period of ac'o,al gas deliveries, SEI_.LER and BUYER shall make available to each
other current estimates of gas flows at the Point(s) of delivery under this agreement for the
purposes of nomination to others and the monitoring of actual gas quantities delivered. If
Seller is unable to provide current estimates of gas activity to BUYER, SELLER will assist
BUYER in obtaining said information fi.om pipeline transporters, processing plant operators,
well operators, or upstream suppli.ers.
'_2
16. GOVERNING STATE:
This agreement shall be construed pursuant to the laws 0fthe State of Texas and venue for
its construction and enforcement shall-lie in the-courts of Denton County, Texas.
. BUYER:
SELLER:
Title: President Title'
Date: December 12, 1994 Date: ~//'--
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Atsact~nent A
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.
Volume Price
Dates for Point of Receiving (mmBtu/ ($tmmBtu
Delivery Delivery ' Pipeline 14.65 D/D) 14.65 D/D)
Accepted and Agreed . '>. _: .. Accepted and Agreed
(Seller) '(Buyer)
· - Jim Thune
Dated: Dated:
To facilitate payment, please sign the above Buyers Notice and return via fax:
City of Denton
Electric Production Division
1701-A Spencer Rd
Denton, Texas 76205
Attn: Jim Thune
(817) 383-7551 phone
(817) 383-7555 fax
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