1988-0361910L
NO
AN ORDINANCE APPROVING AN AGREEMENT BETWEEN THE CITIES OF DENTON,
BRYAN, GARLAND, GREENVILLE AND TEXAS NEW MEXICO COMPANY FOR THE
SALE OF POWER AND ENERGY, AND PROVIDING AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the City Council hereby approves and auth-
orizes the Mayor and City Secretary to execute and attest,
respectively, the agreement between the Cities of Denton, Bryan,
Garland and Greenville and Texas New Mexico Company for the sale
of power and energy, under the terms and conditions contained in
said agreement as attached hereto
SECTION II That this ordinance shall become effective
imme lately upon its passage and approval
PASSED AND APPROVED this the 11~414_)day of ~I 1988
RAY HENS, MAYOR
ATTEST:
JE IF W LTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
BY _ V V tJ
TNP/TMPA
AGREEMENT FOR SALE OF POWER AND ENERGY
This Agreement is pursuant to and entered into this, the day of
, 1987 by and between the Cities of Bryan, Denton, Garland, and
Greenville, Texas (hereinafter Cities), all municipal corporations organized
under the laws of the State of Texas, and Texas New Mexico Company, a Texas
Corporation (hereinafter TNP) This agreement is entered into in compliance
with and satisfaction of all terms and conditions either express or implied
of that certain contract dated July 7, 1986 as amended December 19, 1986
WITNESSETH
Whereas, Cities own and operate municipal electric systems which have
generation in excess of that necessary to meet their load and reserve
requirements and other contractual requirements for the period of this
agreement and,
Whereas, TNP operates an electric system which purchases for resale power and
energy from other utilities and,
Whereas, TNP desires to purchase from Cities power and energy and,
Whereas, Cities can and do agree to provide such power and energy,
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Now, therefore in consideration of the premises and the mutual covenants
herein contained the parties hereto do hereby agree and bind themselves as
follows
DEFINITIONS
Base Power - the firm power contracted for in any given year as shown in
Schedule I, which when multiplied by the base price for that year establishes
that annual contract fee
Optional Power - additional power purchases which may be requested at TNP's
option in addition to the base power contracted in amounts up to those as set
forth on Schedule I Optional power is as set forth on Schedule I and shall
be paid for by TNP in amounts as verified to TNP by the cities
Request for Changes in Power - an indication by TNP to the Cities requesting
an increase or decrease in scheduled power amounts by means of oral and/or
written communication inclusive of telecommunication signals of
telecommunication devices installed on TNP's Points of Delivery
ARTICLE I
1 1 The Cities agree to provide and deliver and TNP agrees to accept during
each year of the term of this contract amounts of base power as shown in the
attached Schedule I The Cites further agree to provide and deliver such
optional power as is set forth on Schedule I which optional power may be
requested at TNP's sole discretion The base power and any optional power
shall be provided and delivered at TNP's sole direction to one or both of
TNP's metering points with Houston Lighting & Power in TNP's Southeast
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Division at a level of firmness equal to Cities' native load and the Texas
Municipal Power Pool load Cities agree to provide power and energy up to
the levels as set forth on Schedule I to TNP during the term of this
contract Requests for changes in power and energy may be made by TNP
through oral or written communication from TNP to the Cities' dispatch
center Oral requests shall be confirmed by written confirmation within 24
hours Actual use of power by TNP over and above base power amounts shall be
scheduled orally or via written communication and shall be billed after the
amount of power has been verif2ed by the cities with HL&P at the end of the
month in which the power was taken Verification shall consist of
documentation that reflects power delivered by Cities that is in an amount
equal to the remainder of power in excess of all power delivered to TNP by
it's other suppliers
Requests for changes in power and energy by TNP shall be made at least
12 hours in advance Cities will make all necessary arrangements for
wheeling of power from its generation source to TNP's metering points
The cost of wheeling is included in the delivered price of base power and
optional power as set forth on Schedule I, provided, however, that the price
paid by TNP for base power and/or optional power shall not be affected or
changed by actual costs of wheeling experienced by TMPA during the term of
this agreement or any extension hereof under this Article
1 2 The cities agree to provide documentation to TNP prior to December 1,
1987, (a) that there is sufficient transmission line capability in the ERCOT
facilities to accommodate the base power and optional power deliveries
expected to occur under the terms of this agreement and (b) Cities are able
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to negotiate satisfactory arrangements for the transmission services for the
terms as contained on Schedule 1 by third parties contemplated in Paragraph
1 1 This contract shall become null and void if the Cities are unable to
provide documentation to TNP's satisfaction that contractual arrangments have
been made by the Cities and the necessary affected parties to insure delivery
of the power energy provided for in this agreement If at anytime after
December 1, 1987 the Cities cannot deliver power and energy as provided for
in this agreement because of the failure of Cities to comply with either (a)
or (b) above TNP shall have the option of cancelling as provided for in
paragraph 6 2 Any determination by Cities that they will be unable to
comply with either the requirements set forth in (a) or (b) above shall be
transmitted in writing to TNP no later than three days after the
determination is made
1 3 The Cities also agree to make available and TNP to purchase, at TNP's
option, additional amounts of power up to the amounts shown in the optional
column of the attached Schedule I TNP shall provide an initial nonbinding
notice of intent to request optional amounts of power for each year on or
before the dates indicated in Schedule I and shall make a firm
request for optional power by the dates indicated in Schedule I
1 4 TNP may extend this contract one year beyond May 31, 1991 by submitting
a written request for extension prior December 1, 1989 The base power and
optional power prices for the extension year shall be the same as set forth
in the contract year beginning May 31, 1990 as set forth in Schedule I
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ARTICLE II
TERM
2 1 This agreement shall become effective at 12 01 A M , December 1, 1987
and terminates at 11,59 P M May 31, 1991 unless extended in writing pursuant
to Section 1 4 of Article I
ARTICLE III
IN FOR POWER AND ENERGY
3 1 In consideration for Cities providing and delivering this capacity, TNP
agrees to pay for the amount of base power shown for that year in Schedule I
at the price also shown in Schedule I This price is inclusive of all
wheeling cost referred to in 1 2 above and as conditioned in 1 1 above
3 2 TNP also agrees to pay $10 00 per KW per year for any year of the
contract term beginning June 1, 1989 for which TNP provides a firm request
for optional power This payment shall be known as the reservation fee and
shall be paid to the Cities at the time the firm request for optional power
is made Any reservation fee paid for optional power for a contract year
shall be subtracted from the price for optional power actually taken in the
contract year Requests shall be made a minimum of 6 months prior to the
Cities obligation to deliver In the event optional power that has been
requested is not taken in the contract year for which it was reserved, the
reservation fee shall be held by the cities as liquidated damages and the
Cities agree that they will not be entitled to further damages
In the event TNP elects to nominate an amount of optional power to be
taken in one of, or any, or a combination of the preceding years, then that
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amount of optional power cannot be displaced by purchases from alternate
suppliers Nothing in this paragraph shall be construed to prohibit TNP from
making the necessary purchases to fulfill its obligations to its customers
3 3 TNP agrees to pay $75/KWyr for all optional power actually taken which
is greater than the base amount of power for that contact year The amount
of optional power greater than the base amount shall be determined by the
following formula
A Total TNP Southeast Divisions Peak load
Less B Total TNP suppliers load inclusive of
base power from the cities at the time
of peak period in A above and any
standby purchases made by TNP
Optional power actually taken and
to be multiplied by optional power
rates on Schedule I
In any given contract year which the Cities provide and deliver, and TNP
accepts, more power than the base amount set forth in Schedule I for that
contract year, TNP agrees to pay the amount per KW as set forth for optional
power in Schedule I for that contract year multiplied by the amount
determined in the above formula The power accepted by TNP beyond the base
amount for that contract year shall be considered optional power for that
contract year whether or not a firm request for delivery of optional power
has been received by the Cities
3 4 On or before the 15th of each month during the term of this contract,
the Cities will supply TNP with a rate per KWH for fuel and energy (combined)
which will apply for energy delivered in the subsequent calendar month TNP
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may elect to purchase energy at this price in amounts ranging from zero up to
a maximum of the base power plus any optional power requested for that
calendar year
ARTICLE IV
PAYMENT TERMS
4 1 Cities will invoice TNP for all power and energy delivered by the 10th
of the month following the month of usage under Article I of this contract
with payment being due and payable by the 25th of that month The monthly
rate for power shall be calculated as follows
Monthly Rate = 1/12[(A x B) + (C x D)]
where
A = Base amount of power for that contract year
B = Price per KW for base power in that contract year
C = Optional amount of power for that contract year
D = Price per KW for optional power for that contract year less
Reservation Fee
During the 12 months in the year 1989, the Cities shall apply a credit in
the amount of $39,375 00 per month to the above formula in compliance with
the amounts due pursuant to paragraph 3 4 of the contract between the parties
dated July 7, 1986 as amended December 19, 1986 The formula as applied in
1989 shall be as follows
Monthly rate = 1/12 [(A x B) + (C x D)] - $39,375 00
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The parties recognize that the amount of optional power in C may not be
identified by the 10th of each month In such cases a separate bill for C
power will be provided at a later date The monthly rate for power will be
adjusted as indicated in 3 2 above optional power taken will be billed for
the 12 month period following the month in which it was taken according to
the price as set forth in Schedule I as applied in the above formula in
Section 3 4
ARTICLE V
CONTINUITY OF SERVICE, FORCE MAJEURE
5 1 Each party will exercise reasonable diligence and care to avoid
interruptions of delivery of power and energy, hereunder, but will not be
liable for any damage or loss that may be occasioned by any failure or
interruption caused by fires, floods, lightning, storms, or other acts of
God, or by strikes, riots, civil disturbance, action of public authority,
litigations, breakdown, or other causes beyond its reasonable control
ARTICLE VI
REMEDIES FOR BREACH
6 1 In addition to and not excluding any remedy herein provided, it is
agreed that if either party fails to perform any of its obligations
hereunder, including the prompt payment of monthly bills or delivery of
electric power, the injured party may suspend payment of bills or delivery of
energy hereunder, and said party will not be liable in any manner for loss of
damage arising from such nonpayment or suspension, provided that the injured
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party shall specifically notify the other party of such failure in writing at
least ten (10) days prior to such suspension or nonpayment No such
suspension or nonpayment will interfere with the enforcement by either party
of any other legal right or remedy No delay by either party in enforcing
any of its rights hereunder, and no waiver of any right to enforce any breach
hereof, will be deemed a waiver of such rights No waiver by either party or
any delay by the other party shall be deemed a waiver of any other or
subsequent default All rights and options herein are provided to the
benefit of either party and are continuing such that a failure to exercise
any such right or option shall not be construed as waiving the right or
option upon any subsequent delay or breach whether of like or different
character In no event shall this Article VI apply when the event of default
is the failure to take reserved optional power as set forth in Article III
with the exception of the 20 MW as set forth in paragraph 2 of Schedule I
6 2 Nothing in this agreement to the contrary withstanding, it is expressly
agreed that should Cities fail to deliver base and/or optional power as
contracted for by TNP, and it is the result of the Cities failure to perform
and such failure occurs in a peak month as defined in that certain purchased
power agreement between TNP and Houston Lighting and Power Company (HL&P),
and such failure causes a new and higher demand to be placed by TNP on the
HL&P system, then in such event, and in no other, TNP will have the sole and
exclusive option to cancel the terms of this agreement and have no further
obligations to the Cities hereunder In the alternative TNP may continue to
take base and/or optional power from the Cities at a level to be determined
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by TNP for the remaining terms of this agreement Also in such event, the
Cities agree to reimburse TNP for prior billings from the Cities in an amount
equal to any demand payment TNP incurred over and above monthly levels of
demand payments incurred had the Cities not been a supplier during the
particular contract year Such reimbursement of demand payments shall be
limited to those incurred during the year in which the failure to deliver
occurred A peak month is defined as being any month or a part thereof
between May 15 and October 15 of a year Should Cites be unable to make
delivery of power as described in this agreement for reasons not within their
control, TNP shall have the same option of cancellation and base power
adjustments as described above However, in such case the Cities shall not
be obligated to make a refund or reimbursement This article shall in no way
relieve TNP of the responsibility to properly schedule power to each of its
metering points with HL&P to prevent a new demand
ARTICLE VII
Cities reserve the right to assign portions of this contract responsibility
to another member of the Texas Municipal Power Pool, provided however that
such assignment shall be subject to the same terms and conditions contained
in this agreement unless modified by agreement in writing by TNP and the
assignee Cites agree to notify TNP of the appropriate parties responsible
for any requests in change of power on a regular basis
ARTICLE VIII
This contract and its terms and conditions shall be interpreted in accordance
with Texas law, as applied and enforced by the PUCOT through their
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regulations, and shall become null and void if any or all of the terms and
conditions are not approved by order of appropriate regulatory authorities
The parties recognize that each may have obligations to the other under
Article 3 3 of the 1986 Agreement for Sale of Power and Energy by and between
TNP and the City of Bryan In the event of regulatory disapproval of this
contract, those obligations, to the extent they may exist, will continue In
the event Municipally owned systems become regulated as to their contract
terms and rates by an agency of the State of Texas, it is agreed that no
tariff requested by the Cities will include a term that provides for payment
for base or optional power beyond the term of the contract because of a
minimum or ratcheted demand In the event such a term is included in the
tariff by the regulatory agency, then this contract shall immediately become
null and void at TNP's option
In the event Municipally owned systems become regulated as to their
contract terms and rates by an agency of the state of Texas or any government
and such agency or regulatory authority imposes regulations that would modify
this agreement, TNP shall have the sole right to terminate immediately upon
effective date of such regulatory order
TNP may, with the agreement of the Cities, modify the terms and
conditions of this agreement to a form necessary to accommodate TNP's plans
to make firm economy sales to its industrial customers The Cities also
agree, subject to transmission access and arrangements with third parties, to
deliver the firm power as described in this agreement and set forth on
Schedule I, as attached, to alternate points of delivery as described by TNP
The afore-referenced agreement by the Cities may not be unreasonably
withheld
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All notices and other communications required or permitted by this
agreement except as otherwise specified shall be sufficiently given by
certified mail, return receipt requested as follows
To the City of Bryan
City of Bryan
P 0 Box 1000
Bryan, Texas 77805
Attn Mr Ernest Clark, City Manager
To the City of Denton
City of Denton
215 E McKinney St
Denton, Texas 76201
Attn Mr Lloyd Harrell, City Manager
To the City of Garland
City of Garland
P 0 Box 401889
Garland, Texas 75040
Attn Mr James Spore, City Manager
To the City of Greenville
City of Greenville
P O Box 1049
Greenville, Texas 75401
To TNP
Attn Mr Bill Cook, City Manager
Texas New Mexico Power Company
Attn
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Signed by the parties hereto on the dates and year first written above by
Approved as to Form City of Bryan, Texas
City ttorney By Title Mavor
Attested by - A XX g~L L
City Secreta y
City of Denton, Texas
By /&r
Title
ko \j
Attested by
City of Garland, Texas
By P
Title G \ \ lMN>tJ{
Attested by
City of Greenville, Texas
By \7
Title
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Texas-New Mexico Power Company
By V Jack V Chambers
Title Vice President
Attested by
AtL Michael D uBlanchar~
Corporate Secretary b General Counsel
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SCHEDULE I
(1)
Term
Beginning
Base
Power/NW Price/KW
Jun 1, 1988
20
$75
00/Yr
Jun 1, 1989
30
$75
00/Yr
Jun 1, 1990
40
$75
00/Yr
Jun 1, 1991
30
$75
00/Yr
Option Year
Jun 1, 1992 0 $75 00/Yr
Optional
Power/MW Price/KW
25 $75 00/Yr
30 $75 00/Yr
50 $75 00/Yr
60 $75 00/Yr
Firm Request
Reservation For Optional
Fee KW Power
$10 00/Yr Feb 1, 1988
$10 00/Yr Oct 1, 1988
$10 00/Yr Dec 31, 1988
$10 00/Yr Dec 31, 1989
Notice of
Intent to
Request
Optional
Power
Feb 1, 1988
Feb 1, 1988
Oct 1, 1988
Oct 1, 1989
30 $75 00/Yr $10 00/Yr Dec 31, 1990 Oct 1, 1990