Loading...
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 -13- 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 -14-