1992-076 ~pdocs\tr~star
ORD~NANCS NO
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
APPROVING AN INTERRUPTIBLE NATURAL GAS SALES AND PURCHASE AGREEMENT
BETWEEN THE CITY OF DENTON AND TRISTAR GAS COMPANY FOR THE PURCHASE
OF SPOT MARKET NATURAL GAS, AUTHORIZING THE EXPENDITURE OF FUNDS,
AND PROVIDING FOR AN EFFECTIVE DATE
WHEREAS, the Clty has a need for lnterruptlble 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
WHEREAS, the City has solicited bids for one year contracts
with spot market suppllers of natural gas, in accordance with
Chapter 252 of the Local Government Code, NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I. That it authorizes the Mayor to execute the
attached Interrupt~ble Natural Gas Sales and Purchase Agreement
with Tristar Gas Company providing for the purchase of spot market
natural gas
SECTION II That it authorlzes the expenditure of funds ~n
accordance w~th the terms of the Agreement
SECTION III That this ordinance shall become effective imme-
diately upon its passage and approval
PASSED AND APPROVED this the ~'" day of ~~__, 1992
BOB CASTLEBERRY, MAYO~ ~
/
ATTEST '
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
DEBRA A DRAYOVITCH, CITY ATTORNEY
PAGE 2
Standard
contraot
Standard Contract
City of Denton Utilities
Interruptible Natural Gas Sales And Purchase Contract Agreement
Date June l, 1992
Tristar Gas Company (SELLER) a Texas General ~'~,z~,.--~.,., Partnership
agrees to dehver and sell gas to the City of Denton Texas (Buyer) and BI. YYER 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 Interruptlble Natural Gas Sales and Purchase Contract
mcludmg Attachment A which is incorporated herein
The term month shall mean a calendar month
The term MMBtu shall mean one million (1 000 000) brttmh thermal units
The term Receiving Pipehne shall mean the interstate, intrastate or local distribution company
immediately downstream of the Point Of Dehvery
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 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 mtual term will be one year from the date hereof and month to month thereafter subject to the
right of either part~ to terminate this Contract on 30 day s prior written notice to the other party
3 PRICE AND PAY3,IENT OF COSTS AND TAXES PRIOR TO DELIVFRY
On a monthly basts, 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, aha 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 transportauon
charges to the Point Of Dehvery payments or other charges thereon apphcable before the title of gas
passes to BUYER at the Potnt Of Dehvery BUYER shall pay transportation charges on the
Recetxang Plpehne, 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 w~ll not act as a Buyer's Notice and shall not be the basis for gas
deliveries under this contract SELLER shall dehver gas quantities consistent vnth the quantity Point
Of Delivery, Receiv~ng Pipeline and dates as specified m the Buyers Notice from the BUYER
BEST EFFORTS PERFORMANCE
SELLER will make a best effort to deliver, and BUYER best effort to receive the gas quantities as
specified in the Buyer s 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 quantities or changes in points of delivery by speclf]ang these
requests In a revised Buvers Notice" to the SELLER If accepted by SELLER SELLER shall make
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 Buyer s Notice
signed by BUYER to do so
7 OVER DELIVERIES
If SELLER provides gas quantities for a month in excess of 4% above the quantmes in the Buyer s
Notice" or at points of dehvery 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 SELLER s deliveries in excess of 4% of the Buyer s Notice or at locations not specified
In the Buyer s Notice
8 GAS AND PRICE UNITS
Ail gas quantities and prices shall be In MMBtu adjusted to 14 650 psi at a temperature of 60 degrees
Fahrenheit with both Mcr and Btu free of water vapor (Dry) Prices vail 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 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 tn 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 SELLER to BUYER
Il DETERMINING PAYMENT VOLUME~
On approximately the l$th day followang the end of each month of gas dehvertes, SELLER shall
furmsh BUYER a statement specif]nng volume delivered location and Recer, nng Pipeline If these
volumes differ from BUYER s independent momtonng of dehverles or Recetvmg Plpehne s records
BUYER shall have the rtght to pay on the undisputed amount either 0) under protest or (n) upon
final agreement being made on the dehvered volumes by BUYER SELLER and Receiving Pipeline
BUYER and SELLER shall have the right to later revtse payment volumes as a result of additional
or revised volumetric data from the Receiving Pipeline or other companies associated wath the
production, sale storage, or transportation of the gas
12 PAYMENT
Wtthtn 15 days of receipt of the statement BUYER shall make payment to SELLER for the gas
quantttte$ as determined in Paragraph ll Payments statements should be directed to BUYER at
City of Denton Utilities
Electric Production Division
1701 A Spencer Road
Denton TX 76205
Attn Jim Thune
Manager Electric Production
13 NOTIFICATION
Commumcattons regarding the performance of thls contract shall be directed to
SELLER Tristar Gas Company BUYER City of Denton Utilities
Suite 1177 Electrlc Production Division
8150 N Central Expwy 1701 A Spencer Road
Dallas, Texas 75206 Denton TX 76205
Attn Betty Estes Attn JlmThune
Manager of Gas Supply Manager Electric Production
14 PERFORMING NOMINATIONS
BUYER wall 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 natu-al gas prior to Point Of Delivery
15 EXCILANGE OF GAS QUANTITY INFORMATION
During the period of actual gas deliveries SELLER 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 momtormg of actual gas quantities delivered If Seller ts unable to
provide current estimates of gas activity to BUYER SELLER will assist BUYER In obtaining said
reformation from plpehne 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 he tn the courts of Denton County Texas
3
T~t[~ Vice President T~t[¢ ~
Date April 16, 1992 Date
BUYERS llOT!r~
GAS SALES AJ4)
DATED June 1, 1992
Date Of B~ers Not~ce
B~ers No~ce
BUYER ~ilities
S~tte~ Tristar Gas Company
Natural ~as ~rcbase quantities
AIl voids a~ ~r~ces are ~s~ om MMS~u ed]us~ ~c 14 ~00ry ~rices are ~n
Total MMBTU Price
Dates For Point of Receiving HHBtu/Oay For Perf~ ($/MHBtu)
Oet~very OeLIverv Facility ~1~.650 O/o) (1~ 650 D/O) (1~,650 0/0)
Accepted And Agreed Accepted And Agreed
(SELLER) (BUYER)
Tristar Gas Company City of Denton Utilities
Dated Dated