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1992-075· ~pdoCs\~r~nJty ORDINANCE 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 TRINITY PIPELINE, INC 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 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 suppliers 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 Interruptlble Natural Gas Sales and Purchase Agreement with Trinity Pipeline, Inc providing for the purchase of spot market natural gas SECTION II That it authorizes the expenditure of funds in accordance with the terms of the Agreement SECTION III That this ordinance shall become effective imme- diately upon its passage and approval1 PASSED AND APPROVED this the ~3' day of 7~ , 1992 ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM DEBRA A DRAYOVITCH, CITY ATTORNEY PAGE 2 Standard Contract Standard Contract City of Denton Utilities Intcrruptlble Natural Gas Sales And Purchase Contract Agreement Date Apri'l 2].~ ].992 Trinity Pipeline~ Inc (SELLER) a Texas CorporaUon agrees to dehver and sell gas to the City of Denton Texas (Buyer) and BUYER agrees to purchase and receive sa~d natural gas from SELLER pursuant to the terms and condluons hereinafter set forth ]. DEFINITIONS The term Agreement shall mean thru Interruptlble Natural Gas Sales and Purchase Contract including Attachment A which ~s ~ncorporated here~n The term "month" shall mean a calendar month The term MMBtu" shall mean one mflhon (1 000 000) bnush thermal umts The term Recmwng P~pehne" shall mean the interstate ~ntrastate or local dmtnbut~on company immediately downstream of the Point Of Delivery The term "Buyers Not,ce shall mean the letter agreement a form copy of which ~s attached hereto as Attachment A, which may be executed by BUYER and SELLER from t~me to ume and whtch shall brad BUYER and SELLER to pamcular transacuons for the purchase and sale of natural gas m accordance w~th the terms thereof and this Agreement The term Point Of Dehvery shall mean the location of the phymcal dehvery to the Receiving Plpehne 2 TERM The lmtlal term will be one year from the date hereof and month to month thereafter subject to the right of either party to terminate thru Contract on 30 day s pmor wmtten nonce to the other party 3 PRICE AND PAYMENT OF COSTS AND TAXES PRIOR TO DELIVERY On a monthly basra, the pmce to be prod by BUYER for gas dehvered by SELLER shall be specified on the Buyers Nouce" shown m Attachment A Prices shall include and SELLER shall be responmble 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 dehvery hereunder Pmces shall also include and SELLER shall be responmble for payment of gathenng and transportation charges to the Point Of Dehvery, payments or other charges thereon apphcable before the title of gas passes to BUYER at the Point Of Dehvery BUYER shall pay transportauon charges on the Recetwng Ptpehne, downstream of the Point Of Dehvery PAGE 1 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 Buyer's 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 NoIIce 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 vnll make diligent efforts to notify the other party of the situation within 48 hours INCREASES IN QUANTITY AND CHANGES TO POINTS OF DELIVERY BUYER may request increases to gas quantities or changes in points of delivery by specif~ng these requests in a revised "Buyer's 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 quantmes or change points of dehvery, he must notify BUYER and receive a revised Buyers Notice signed by BUYER to do so OVER DELIVERIES If SELLER provides gas quantities for a month in excess of 4% above the quantities in the "Buyer's Notice or at points of delivery not specified in the Buyer s 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 Nouce or at locations not specified In the "Buyer's Notice" 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 Mcr and Btu free of water vapor (Dry) Prices will be In U S dollars QUALITY AND PRESSURE The gas delivered by SELLER shall meet the pressure requirements and quality specifications of the Receiving Pipeline I0 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 hens encumbrances and claims of every kind SELLER shall lndemmf~ 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 SELLER to BUYER PAGE 2 Il 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 momtormg of deliveries or Receiving Plpehne s records BUYER shall have the right to pay on the undisputed amount either 0) under protest or (ii) upon final agreement bemg made on the delivered volumes by BUYER, SELLER and Receiwng Pipeline BUYER and SELLER shall have the right to later revise payment volumes as a result of additional or revised volumetric data from the Recelxang Plpehne or other companies associated with the production, sale, storage, or transportation of the gas 12 PAYMENT Within 15 days of receipt of the statement, BUYER shall make payment to SELLER for the gas quantltl~ as determined in Paragraph 11 Payment statements should be directed to BUYER at City of Denton Utilities Electric Production Division 1701 A Spencer Road Denton, TX 76205 Atm Jim Thune, Manager Electric Production 13 NOTIFICATION Communications regarding the performance of this contract shall be directed to SELLER Trinity Pipeline, Inc BUYER City of Denton Utilities 17101 Preston Rd Electric Production Div~sion Suite 240, LB 122 1701 A Spencer Road Dallas, Texas 75248 Denton TX 76205 Attn Jeff L Singleton Attn Jim Thune 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 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 EXCIIANGE OF GAS QUANTITY INFORMATION During the period of actual gas dehvenes 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 is unable to provide current estimates of gas acuwty to BUYER SELLER will assist BUYER in obtaining said information from pipeline transporters processing plant operalors, 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 ~ts construction and enforcement shall lie m the courts of Denton County Texas PAGE 3 SELLER TRINITY PIPELINE, INC BUYER By ~' F Norman Berthueen Title Vice President, Gas Supply Title Date April 21, 1992 Date PAGE 4 BUYERS #OTIr~ GA5 SALEB AND PURC~IAS~ AGR~T DATED Date Of 8~ers Not~ce B~ers ~ot~ce BUYER SELLER ALt voids a~ prices are ~s~ on HHB~u edjust~ to 1~ 650 Dry Prices are m U S do~ars Tot6[ HHBTU Prtce Dates For Potnt of Receiving HHBtU/Day For Perl~ ($/HHBtu) OeL~very ~e~fverv ~ac~Jty (~4,650 D/D) ;1~ 650 D/D) (1~.650 D/O) Accepted And Agreed Accepted And Agreed (SELLER) (BUYER) Zts Dated Dated GASBID PAGE 5