1985-0771008L
NO 8577
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING AN AGREEMENT
PROVIDING FOR THE SALE OF ELECTRIC POWER BY THE CITIES OF DENTON,
BRYAN, GARLAND AND GREENVILLE AND BRAZOS ELECTRIC POWER
COOPERATIVE, INC (REFERRED TO AS "TMPP") TO TEXAS UTILITIES
ELECTRIC COMPANY (REFERRED TO AS "TUEC"), AUTHORIZING THE MAYOR
TO EXECUTE THE AGREEMENT, AND PROVIDING FOR AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I
That the City Council hereby approves the attached agreement,
providing for the sale of electric power by the Cities of Denton,
Bryan, Garland and Greenville and Brazos Electric Power
Cooperative, Inc to Texas Utilities Electric Company and
authorizes the Mayor to execute the agreement on behalf of the
City of Denton
SECTION
That this ordinance shall become effective immediately upon
its passage and approval
PASSED AND APPROVED this the day of 1985
i
I R TEW W YOR
CIT OF D TON, TEXAS
ATTEST
Y~5h(;KETARY
CITY OF DENTON, TEXAS
APPROVED AS TO LEGAL FORM
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
CITY OF DENTON, TEXAS
BY
10451
THE STATE OF TEXAS §
AGREEMENT
COUNTY OF DENTON §
This Agreement, made and entered into as of the ~ day of
1985, by and between BRAZOS ELECTRIC POWER
Ida
C00 RATIVE, INC., and the Cities of BRYAN, DENTON, GARLAND, and
GREENVILLE, hereinafter referred to as "TMPP", and TEXAS UTILITIES
ELECTRIC COMPANY, a Texas Corporation, acting herein through its
Texas Utilities Generating Company division, hereinafter referred
to as "TUEC".
WITNESSETH:
WHEREAS, TMPP owns and operates an electric utility system
including generation and transmission facilities in the State of
Texas, and desires to sell electric power to TUEC; and
WHEREAS, TUEC owns and operates an electric utility system
including generation, transmission and distribution facilities in
the State of Texas, and desires to purchase electric power from
TMPP;
NOW, THEREFORE, in consideration of the premises and mutual
covenants and agreements hereinafter set forth, the parties hereto
mutually contract and agree as follows:
ARTICLE I.
ELECTRIC POWER AND ENERGY
1.1 TMPP will have 200 megawatts (MW) generating capacity
available for sale to TUEC from June 1, 1985 through and including
PAGE 1
September 30, 1985, and agrees to sell such capacity to TUEC on
the following terms, and subject to the provisions set forth in
this agreement:
(a) Capacity Charge: TUEC shall pay TMPP an Annual Capacity
Charge as follows:
(1) During 1985, the Annual Capacity Charge shall be
$7,000,000 to be paid, as billed, in installments of
$1,750,000 for each month during the aforesaid period
of availability (hereinafter called "Monthly Capacity
Charge"); provided, however, if in any month TMPP
fails to have available 200 MW of capacity, then the
Monthly Capacity Charge for that month shall be
adjusted to reflect the amount of capacity actually
available to TUEC as follows: any hour that any part
or all of the 200 MW is not available, the Monthly
Capacity Charge will be adjusted by subtracting $12.00
for each MW not available during such hour.
(2) Although in 1.1(a)(1) above, a pricing adjustment is
set out for unavailable capacity, it is the intent of
this contract that the capacity sold hereunder shall
be available to TUEC at all times in accordance with
the terms of this agreement. This capacity sale shall
take precedence over any subsequent capacity sales by
TMPP Members to non-member entities.
PAGE 2
(3) TMPP will promptly notify TUEC, as far in advance as
practicable, when any of such capacity is not avail-
able or is limited and the duration of such period of
nonavailability or limitation.
(b) Energy Charge: TUEC is entitled to purchase energy up to
the maximum hourly amount capable of being generated by
the purchased capacity. For all such energy purchased,
TUEC will pay, in addition to the monthly Capacity Charge,
a Monthly Energy Charge for energy actually delivered to
TUEC.
(1) The Monthly Energy Charge will be the sum of: (i) the
incremental fuel costs (the same being the lowest cost
fuel available after the requirements of TMPP's own
load and prior contractual commitments are satisfied)
incurred by TMPP in generating the energy delivered to
TUEC each month; (ii) the incremental operation and
maintenance expenses incurred by TMPP in generating
the energy delivered to TUEC each month from TMPP gas
and oil fired generation, which the parties agree is
two (2.0) mills per KWH; (iii) the costs related to
transmission losses on the TMPP system resulting from
such deliveries to TUEC each month, which cost will be
determined by agreement of the parties based upon load
flow studies; and (iv) start up charges, if applicable.
PAGE 3
Such load flow studies will utilize the firm power
wheeling loss matrices produced pursuant to the Texas
Public Utility Commission substantive rules or such
other procedures as may be established by the parties
hereto.
(2) The incremental fuel costs for energy delivered to TUEC
herein shall be calculated by using the bus bar fuel
costs for gas in cents per kilowatt-hour based on the
incremental heat rates of the units which furnished the
energy for TUEC during the hours in which energy was
supplied to TUEC. The TMPP dispatcher, at his sole
discretion, may designate the unit or units which will
generate the energy for TUEC provided, however, that the
units so designated will be the most efficient units
available for operation after the TMPP load requirements
and prior contractual commitments are satisfied. Fuel
oil will be used to provide energy to TUEC only when
specifically authorized by the TUEC dispatcher, in which
case the additional average cost of fuel oil over gas
will be borne by TUEC. The cost of fuel oil shall be
the lesser of inventory or replacement costs. it is
intended that the energy furnished to TUEC by TMPP be
generated in gas and/or oil fired units. When energy is
available from coal fired units, TMPP, at its sole
PAGE 4
discretion, may elect to furnish the energy requested
by TUEC from such units at a cost equal to the cost of
energy which would otherwise have been generated by
TMPP with gas as fuel (or oil, provided prior authori-
zation has been obtained), using the heat rate of
10,250 BTU/KWH for cost calculations.
(3) TMPP will have complete discretion as to the fuel mix
that will be used to generate energy delivered to TUEC;
subject to prior authorization for oil. It is antici-
pated that the fuel mix will vary depending on such
factors as the time of day the energy is transferred,
the number of units available at the time of transfer,
and industry accepted operation practices. TMPP will
inform TUEC of the anticipated fuel mix, and the esti-
mated cost of the components thereof, when each
scheduled delivery period is requested, and TMPP will
immediately notify TUEC of any changes in the mix or in
such component costs during such scheduled delivery
period.
1.2 TUEC shall carry its spinning reserve assignments required
by applicable operating agreements on its own generators.
1.3 TUEC may, at its option, repay TMPP for TMPP's losses in
kind. If so elected, that component of the Energy Charge will be
eliminated or reduced to the extent of such repayment in kind.
PAGE 5
ARTICLE II.
FUEL SUPPLY
2.1 The delivery of energy to TUEC is subject to fuel
limitations that may be imposed upon TMPP or its fuel suppliers by
regulatory action, statutory changes, or the invocation of
provisions in TMPP's existing or future contracts for boiler fuel.
2.2 Daily scheduled requests by TUEC for capacity and energy
deliveries shall be made at least twenty-four (24) hours in
advance unless this requirement is waived by TMPP or unless TUEC
has an emergency capacity deficiency, in which event capacity will
be made available as soon as possible.
(a) Capacity shall be scheduled for a minimum of six (6)
hours, but TMPP shall not be required to start up any
one unit more than once during any twenty-four (24)
hour period. The minimum take during any hourly
period in which capacity is scheduled shall not be
less than thirty percent (30%) of the maximum amount
scheduled during a scheduled delivery period.
(b) Each time that capacity is started for TUEC, TUEC
shall pay a generating start-up cost to be calculated
as follows: 5.5 times the cost of fuel per million
BTU used in starting the unit times the maximum number
of megawatts scheduled. No such start-up charge will
be made when units do not have to be started in order
to supply TUEC's requested capacity.
PAGE 6
(c) TMPP dispatcher shall determine, at his sole
discretion, whether capacity must be started in order
to fulfill TUEC's request for capacity and energy.
TUEC shall retain the right to abandon or reduce any
schedule when a gas curtailment or Force Majeure would
cause a drastic change in the Energy Charge to TUEC.
(d) TMPP will not be obligated to pick up or drop load at
a rate in excess of three percent (3%) per minute for
the total amount scheduled.
2.3 TUEC may, from time to time at its option, provide natural
gas fuel to TMPP for its use in generating the energy delivered to
TUEC under this contract. In the event TUEC does make such natural
gas fuel available to TMPP by contract release or otherwise, TUEC
shall be responsible for arranging the delivery of such fuel to
TMPP at the power plants designated by TMPP. The Energy Charge
shall include no incremental fuel costs nor the fuel component of
start up costs with respect to fuel furnished by TUEC. TUEC will
bear all costs for purchase and delivery of said fuel.
ARTICLE III.
TRANSMISSION LINE CAPABILITY STUDIES AND WHEELING POWER
3.1 TUEC shall make all arrangements necessary to transport
beyond the transmission facilities of TMPP the power and energy it
expects to purchase from TMPP during the term of this agreement.
PAGE 7
ARTICLE IV.
CONTINUITY OF SERVICE, FORCE MAJEURE
4.1 Each party will exercise reasonable diligence and care to
avoid interruptions of delivery and receipts 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, lightening, storms, or other acts of God; or by strikes,
riots, civil disturbances, action of public authority, litigations,
breakdown, or other causes beyond its reasonable control.
4.2 The Capacity Charge will be reduced, in the manner set
forth in 1.1(a)(1), for each hour that TUEC is unable to receive,
or TMPP is unable to deliver, all or part of the capacity made
available hereunder by reason of any of the causes set forth in
4.1 or 4.3. Failure or refusal of the Public Utility Commission
to allow TUEC to recover, as a purchased power or other allowable
cost, all or part of the expenses and costs incurred by TUEC
pursuant to this agreement shall not be a reason, as set forth in
4.1, for nonperformance hereof.
4.3 TMPP may interrupt delivery of capacity and energy to make
necessary repairs or to make changes in equipment or to install
new equipment, but only for such time as may be unavoidable. TMPP
will endeavor to schedule outages so as not to inhibit its perfor-
mance hereunder. Reasonable advance notice of such interruption
will be given if the nature of the situation permits.
PAGE 8
ARTICLE V.
BILLING AND PAYMENT
5.1 Beginning on July 10, 1985, and continuing on the 10th day
of each calendar month thereafter for three (3) months, TMPP or
its designated agent shall render a statement for the capacity
charge and any energy delivered to TUEC during the preceding
month; provided, however, TMPP may defer said billing for a
reasonable period of time if required in order to obtain the
necessary information to compute the Monthly Energy Charge, or
said billing may be estimated, subject to correction in the next
succeeding month's billing. Thirty (30) days after the last
monthly bill, a corrected bill or credit shall be sent to TUEC.
Bills will be due and payable within fifteen (15) days from
receipt of the statement.
5.2 Each party shall have the right at reasonable hours to
examine the books, records and charts of the other party to the
extent necessary to verify the accuracy of any statement, payment
calculation, or determination made pursuant to the provisions of
any article hereof. If any such examination shall reveal, or if
either party shall discover, any error in its own or the other
party's statements, payment calculation, or determinations, then
proper adjustment and correction thereof shall be made as promptly
as practicable thereafter.
PAGE 9
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 or damage arising
from such nonpayment or suspension, provided that the injured
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 of payment or delivery will excuse
continued performance by the party in default nor affect the
enforcement by either party of its rights hereunder. No waiver of
any right to enforce any breach hereof will be deemed a waiver of
any other or subsequent default. All rights and options herein
provided to or for the benefit of either party shall continue so
that 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.
ARTICLE VII.
REGULATORY APPROVAL
7.1 The terms of this contract and the charges herein set
forth are subject to the approval of any regulatory authority
PAGE 10
having jurisdiction over the parties hereto, and the rates and
charges herein set forth are subject to change or termination
pursuant to the order of such regulatory authority.
ARTICLE VIII.
TERM
This agreement shall become effective upon execution and shall
continue in effect until December 1, 1985.
ARTICLE IX
L"U'"In"C y n"
9.1 TUEC may, at its option, exercised by giving written
notice to TMPP not later than December 1, 1985, renew and extend
this agreement for all or part of the calendar year 1986. If such
option is exercised, TMPP will sell and TUEC will purchase, on the
terms and provisions and at the price herein set forth, such
generating capacity as TMPP may have available during such year
for such portion of 1986 as TUEC may designate in its notice; the
Capacity Charge shall be altered, pro rata, to reflect any change
in available capacity. Notwithstanding the foreging, TUEC may,
but shall have no obligation to, purchase available capacity in
excess of 200 MW; TMPP may, but shall not be obligated to, accept
any renewal hereof for any period that does not include the months
of June through September, 1986.
PAGE 11
ARTICLE X
SUCCESSORS AND ASSIGNS
10.1 This contract will inure to and be binding upon the successors and
assigns of.the respective parties.
EXECUTED on the date first above written.
BRAZOS ELECTRIC POWER COOPERATIVE,
INC.
ATTEST BY c(
Title
Executive Vice President and
?iJ~ pos~:gpAtVie rerary may- General Manager
CITY OF BRYAN, TEXAS
By
Title Mayor f
IT
Y
it
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J
ATTEST:_ _ 1
~l 1
b T.
\ A T\E S Tom?'
':ATTEST:
CITY OF GARLAND, TEXAS
By
` 1 rnL
Title
City S re ary
v1
ty Secretary
Secretary
CITY OF GREENVILLE, TEXAS
By
Tit
TEXAS UTILITIES ELECTRIC COMPANY
By `rY~Qc% I~h IIA.l1k~1
Title Vice President - TUGCO
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