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1977-037OP9,91M y,VcE J:~ 77_3 9 dRP 77-37 AN ORDINANCE by the City Council of the City of Denton, Texas, relating to certain System Development and Reliability Expenditures as certified to this Council by the Board of Directors of the Texas Municipal Power Agency, approving such System Development and Reliability Expenditures, making certain findings in connection therewith, ratifying and confirming certain actions heretofore taken, and declaring an emergency WHEREAS, by ordinances heretofore duly passed, the governing bodies of the Cities of Bryan, Denton, Garland and Greenville, Texas, approved the execution of identical Power Sales Contracts by and between such Cities and the Texas Municipal Power Agency, the execution thereof on behalf of the said Agency having also been approved by the governing body of the Agency, and WHEREAS, the executed Power Sales Contracts were submitted to the Attorney General of Texas (in connection with his examination of the proceedings relating to the "Texas Municipal Power Agency Revenue Bonds, Series 1976") and said contracts were approved as to legality by such officer and were filed with the Comptroller of Public Accounts of the State of Texas under Registration Number 43300, and WHEREAS, pursuant to the Power Sales Contract with this City, the Agency has given notice to this governing body of its intention to issue an additional series of bonds in order to provide funds with which to discharge certain costs and expenses of the Agency in connection with the acquisition or construction of certain electric facilities, to provide engineering, planning and financing expenses and for the purpose of setting aside certain amounts for payment into the Bond Fund and the Reserve Fund and has further submitted to this governing body (as required in such Contract) a general description of the "System Development and Reliability Expenditures" (all of which expenditures which are to be made from the proceeds of the Texas Municipal Power Agency Revenue Bonds, Series 1977 being considered a single Project, as defined in such Power Sales Contract) together with a report showing the projected sources (bond proceeds) and uses of funds for all aspects of the construction and testing of the Project (where applicable) and the Resolution a roved by the Agency finds such System Development and Reliability Rxpenditures are necessary for the Agency to meet its commitments under the Power Sales Contract and that the same are economically feasible together with an explanation of the basis for such finding and opinion, and WHEREAS, a true and correct copy of the Resolution of the Board of Directors of the Agency (being Resolution 77-6-3) transmitted to this governing body which, among other things, describes the proposed System Development and Reliability Expenditures, is attached hereto and made a part of this ordinance for all purposes, it being hereby found and determined that (1) all conditions of the Power Sales Contract (by and between this City and the Agency) so as to permit the issuance of the said proposed Series 1977 bonds by the Board of Directors have been met and (2) neither this City nor the Agency is in default of any obligation imposed upon them or either of them by the terms and provisions of the said Power Sales Contract, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS SECTION 1 That all of the recitals contained in the pream a ereof are found to be true and are hereby adopted as the findings of this governing body SECTION 2 That this governing body hereby approves the System Development and Reliability Expenditures, which are set forth in the attached Resolution 77-6-3 of the Board of Directors of the Texas Municipal Power Agency, and the issuance of bonds up to the principal amount specified therein SECTION 3 The prior execution of the Power Sales Contract y and between this City and the Texas Municipal Power Agency) on behalf of this City and the authorization, issuance and delivery of the Texas Municipal Power Agency Revenue Bonds, Series 1976 (pursuant to the resolution adopted by the governing body of the said Agency on the 29th day of September, 1976) are hereby in all things approved, ratified and confirmed That the bonds proposed to be issued by the Agency are to be payable from the same sources and secured in the same manner as the Texas Municipal Power Agency Revenue Bonds, Series 1976, and it is recognized by this governing body that, under such circumstances, the obligation of this City, under Section 14 of the aforesaid Power Sales Contract, will be equally applicable to the said Series 1976 and Series 1977 bonds SECTION 4 That the public importance of this measure and the fact that it is to the beat interest of this City to approve the System Development and Reliability Expendi- tures and make the findings as contained in this ordinance at the earliest possible time so as to enable the Texas Municipal Power Agency to issue the Series 1977 bonds upon a favorable market constitutes and creates an emergency and urgent public necessity requiring that this ordinance take effect and be in full force from and after its passage, and it is so ordained PASSED AND APPROVED this the 5th day of July, 1977 Mayor, City o n , Texas ATTEST (City Seal) APPROVED AS TO FORM EXHIBIT RESOLUTION 77-6-3 A RESOLUTION by the Board of Directors of the Texas Municipal Power Agency relating to the approval of certain expenses as System Development and Reliability Expenses, making provision for notification of the adoption of this resolution to the governing bodies of the Cities of Bryan, Denton, Garland and Greenville, resolving other matters incident and related to the purpose of this resolution, and providing an effective date WHEREAS, this governing body has reviewed the necessity for the immediate institution of a program to acquire a new electric generating unit so as to provide the electric power and energy which will be needed to supply the needs of the Cities of Bryan, Denton, Garland and Greenville, and by resolution adopted on the 26th day of August, 1976, approved as a "Project" the construction of "Bryan Lignite Number One", therein described as follows An electric generating plant (including land), steam boiler, steam turbine, electric generator, cooling facilities, associated transmission, transformation and switching facilities so as to connect the plant to existing or proposed facilities, a lignite mine, railroad siding, shops, warehouses, construction camp, office, dwellings and other structures, fixtures, equipment, supplies or other items which this Board finds are needed or useful in connection with the construction, maintenance, and operation of the plant (and providing fuel for the same) so the electric generating plant shall be placed in service as an operating utility and, WHEREAS, it was and is anticipated that (1) such initial generating plant will include a steam turbine acting as the prime mover of an electric generator of approximately 400,000 kilowatts (net) and that the steam boiler, steam turbine and electric generator will be of the outdoor type with all other equipment relating to plant services and control enclosed in appropriate buildings, and (2) the strip mining operation includes equipment for excavation and transportation and the Project includes communication equipment, all necessary permits, licenses, developmental rights, easements, right- of-way, approval certificates of state and federal agencies where applicable, real estate and interest in properties where necessary, and WHEREAS, in the aforesaid resolution adopted by this Board on August 27, 1976, this Board of Directors also approved certain System Development and Reliability Expenditures, as follows (a) Olinger - Greenville Transmission Line - the estimated balance required to provide survey, right-of-way, line construction, interconnection and engineering for a new 20 mile 138 KV transmission line from Greenville to Olinger (b) Bryan Capacitors Bank - to prevent Bryan from experiencing severe voltage drop during certain pooling contingencies, 21 6 MVAR of 69 KV capacitor banks are to be placed in service (c) Bryan interconnection - a 20 mile 138 KV line from Hearne to Bryan to provide transmission interconnection and reliable back up for the new 100 MW Dansby unit scheduled for completion in 1978 (d) Garland 345 MVA line (right-of-way) - to deliver power from Comanche Peak and Bryan Lignite Number One to Garland and Greenville , a 345 KV line, two double circuit 138 KV lines, and a 500 MVA 345/138 KV autotransformer will be required A 345 KV substation is to be located in Northeast Garland Right-of-way is to be acquired at this time since the completion date is now scheduled as June, 1980 (e) Denton interconnection - improvement program to provide firm transmission supply to over 231 MW of load in Denton and Roanoke area, including the conversion of portions of an existing 69 KV transmission system to 138 KV operation and two new 138 KV interconnections Rights-of-way and substation site purchases are to proceed immediately (f) Fuel exploration and acquisition program - the search for fuel for projects other than Bryan Lignite Number One (g) Microwave Communication - continuation of the development of a communication system begun with the initial financing of the Agency (h) Economic Dispatch Studies - continuation of studies (begun with proceeds of initial financing by the Agency) operating the most efficient and economical generating units and WHEREAS, the Bryan Lignite Number One and all of the aforesaid System Development and Reliability Expenditures have been heretofore approved by the governing bodies of the Cities of Bryan,Denton, Garland and Greenville, Texas, by ordinances adopted (on the 27th day of August, 1976, by Denton, Texas, and on the 26th day of August, 1976, by the remainder of said cities) and a part of the cost of the same was funded through the issuance of $50,000,000 Texas Municipal Power Agency Revenue Bonds, Series 1976, and - 2 - WHEREAS, this governing boay proposed to authorize the issuance of Additional Bonds (to be designated "Texas Municipal Power Agency Revenue Bonds, Series 1977") for the purpose of providing funds with which to discharge certain costs and expenses of the Agency in connection with the acquisition or construction of certain electric facilities to provide engineering, planning and financing expenses and for the purpose of setting aside certain amounts for payment into the Bond Fund and the Reserve Fund and it is anticipated that the proceeds of the bonds will be utilized for the following purposes (1) Bryan Lignite Number One - (now sometimes callea the Gibbons Creek Steam Electric System) The plant, mine and transmission facilities (the installation of 54 MVA transformer at Gibbons Creek Switchyard for construction power at the plant site, construction of Switchyard for 138 KV line from Bryan and 138 KV line to power draglines, installation of 145 KV breakers, 138 KV breakers and a 40 MVAR shunt reactor, relaying and metering in Switchyard, construction of 7 miles of 345 KV line to tie into Jewett-Parish 345 KV line, construction of 60 miles of 345 KV line from Gibbons Creek to Oak Knoll to provide bulk power transfer from the plant to the north, construction of 11 miles of 345 KV line from Oak Knoll to the Lake Creek-Jewett 345 KV line), (2) System Development and Reliability Expenditures (a) Olinger-Greenville Transmission Line - (now sometimes called Greenville-Phase I) The construction of 22 miles of 138 KV line between Garland's Olinger plant and Greenville, (b) Greenville-Phase II - The construction of 138 KV Commerce Substation, 138 KV Greenville Switchstation, approximately 18 miles of 138 KV line from Greenville to Commerce or Royse City (T P & L ) Substation, and 2 miles of 138 KV line from Greenville steam Plant to the Greenville Diesel Plant, (c) Bryan Interconnection - (the location of the line was changed by the Board of Directors of the Agency as the result of a point study) To provide transmission interconnection and reliability back up for the new 100 MW Dansby unit in Bryan, for administrative purposes these expenditures are classed as Phase I and Phase II Bryan - Phase I~ The construction of a 23 mile 138--1 line an substation facilities from the Atkins Substation in Bryan to Gibbons Creek The Atkins Substation will provide 138/69 KV transformation and provide construction power for Gibbons Creek After construction, power will flow from the Gibbons Creek Plant to the Bryan area Bry_an~~_~ Phase II The construction of a 4 mile I"38-RV Ilne and substation facilities from Gibbons Creek to Keith Substation A 138 KV line is to be constructed from Keith Substation to East Substation to provide another source to reinforce power delivery to the Bryan area - 3 - (d) Nall Switching Station - The construction of 500 MVA Switching Station will provide primary high voltage delivery of generation to the City of Bryan (e) Bryan Capacitors Banks - To prevent Bryan from experiencing severe voltage drop during certain contingencies, 21 6 WAR of 69 kV capacitor banks are to be placed in service, (f) Garland 345 KV line - (now sometimes called Garland-Phase I) The construction of 345/138 KV Garland Central Substation, 345 KV Royse City Switchstation, 12 miles of 345 KV line from Royse City to Garland Central, 3 miles of 138 KV line from Garland Central to Brand to Olinger, 7 miles of 138 KV line from North Garland to Apollo to McCree and 9 miles of 138 KV line from Apollo to Olinger, (g) Denton Interconnection - (as a matter of administrative convenience this has been broken into Phase I, II and III, as follows Denton - Phase I The construction of a 4 mile 138 KV line rom T P & L Corinth Substation to Denton Steam Plant, including 138/69 KV substation, and a 4 mile 138 KV line from Denton Steam Plant to T P & L Arco Switchstation to improve bulk transmission capability Denton - Phase II The construction modification 0 North enton 38/69 KV Substation, and a 138 KV line from Arco Switchstation to North Denton to strengthen power capability in the North Denton area, Denton - Phase III The construction of Denton Central K Substation, Roanoke 345/138 KV Substation, 20 miles of 345 KV line from Roanoke Switch to Denton Central, 3 miles of 138 KV line from Denton Central to North Denton, / miles of 138 KV line from Denton Central to Denton Steam and 4 miles of second 138 KV circuit from Denton Steam to T P & L Corinth Switchstation, (h) Denton - Garland 345 KV - The construction of 40 miles of 345 KV tranmission line and the 500 MVA Denton Central Station to provide transmission support to serve the City of Denton, (i) Comanche Peak - Parker - The construction of a portion of the Texas Utilities 345 KV line from Comanche Peak to Parker (to deliver Comanche Peak Power) A commitment to make this expenditure is not to be authorized unless and until (1) Comanche Peak is approved as a Project by the Agency and the Cities of Bryan, Denton, Garland and Greenville, Texas, or (2) a contract for the purchase of power by and between the - 4 - Agency and the owners of the Comanche Peak Steam Generating Plant has been executed, or (3) if neither of the foregoing has been accomplished (or is then anticipated by this Board not to be subject to accomplishment) within 24 months of the adoption of this resolution, any moneys tentatively allocated to this expenditure (approximately $221,000, if $125,000,000 or more in Series 1977 bonds are delivered, otherwise no allocation is made for this expenditure) shall be utilized for the Bryan Lignite Number One Project), (3) Fuel exploration and acquisition program - The search for fuel for projects other than Bryan Lignite Number One (k) Economic Dispatch Studies - Continuation of studies (begun with proceeds of initial financing by the Agency) operating the most efficient and economical generating units, (1) Microwave Communication - Continuation of communications and control facilities construction and WHEREAS, it now appears to this Board that the amount of bonds to be issued at this time, and to be known as the Series 1977 bonds as aforesaid, should be between $100,000,000 and $150,000,000 and that the actual amount (within such parameters) should be determined at a later time based upon the market conditions for the sale of bonds it being specifically determined that all of the proceeds of an issue of $150,000,000 or less will reasonably be expected to be expended within the safe harbour rule of the Internal Revenue Service as set forth in the proposed regulations relating to arbitrage, and it is now proper for this governing body to communicate its decision in this regard to the governing bodies of the aforesaid cities, therefore BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE TEXAS MUNICIPAL POWER AGENCY SECTION 1 That all of the recitals contained in the preamble h reof are found to be true and are adopted as findings of fact by this Board SECTION 2 That it is proposed that bonds of the Agency (Series 1977) be issued in the principal amount of not to exceed $150,000,000, that the governing body of the Agency be authorized to issue, in its discretion, up to such amount of bonds with the bond proceeds to be allocated for the Bryan Lignite Project and the System Development and Reliability Expenditures as follows - 5 - Application of Proceeds (Estimated) Size of Issue (000 added) $100,000 $125,000 Construction Fund $ 77,040 $ 96,300 Capitalized Interest 12,500 15,625 Capitalized Reserve 7,460 9,325 Financing Costs 3,000 3,750 §ivu,vcu $I'£5;66U Application of Construction Fund $100,000 $125,000 $150,000 $115,560 18,750 11,190 4.500 $150,000 Bryan Lignite No 1 - Project $ 55,123 $ 71,522 $ 89,282 System Development and Reliability Expenditure 21 917 24 778 26 278 77' Ora ~115, 560 That the estimated expenditures are subject to adjustment and finalization as preliminary estimates at such time as the bonds of the Agency are sold and defi.native construction bids are received A tentative budget shall be prepared when bonds of the Agency are sold and then revised as construction bids are received SECTION 3 Approval is hereby given to the System Development and Reliability Expenditures described in the preamble hereof SECTION 4 That a copy of this resolution shall be transm tte to each of said Cities with the request that the System Development and Reliability Expenditures be approved by them This resolution shall constitute a written notice of the intention of the Texas Municipal Power Agency to provide funds (through the issuance of bonds) for (1) the Bryan Li trite Number One (heretofore approved as a Project) and (2 the System Development and Reliability Expenditures described generally in the preamble hereof The General Manager is authorized and directed to also transmit to each City a copy of the report on the proposed System Development and Reliability Expenditures and other data and information as to such expenses, including the projected sources and uses of funds for the construction of testing of the components of the said System Development and Reliability Expenditures - 6 - SECTION 5 In the opinion of the Agency and its Board o Directors, the Project, consisting of all of the System Development and Reliability Expenditures are necessary in order for the Agency to meet its commitments under the Power Sales Contracts it has with the Cities of Bryan, Denton, Garland and Greenville, Texas, and the same is economically feasible As a basis and explanation for this opinion, the following additional information is respectfully submitted (a) The Olinger-Greenville 138 KV Transmission Line will provide the reserve capability that is needed to supply the load requirements for the City of Greenville when the largest unit, 42 MW, is out of service The existing 69 KV tie with Garland cannot meet this contingency (b) The Greenville-Phase II project consists of another 138 KV tie to provide a path for importing power from remote lignite plants For an outage of the Olinger-Greenville 138 KV line, the existing 69 KV line would be thermally overloaded above its rated capacity of 37 MVA, thereby jeopardizing the reliability of service to the entire City of Greenville A 138 KV line between Greenville and Commerce or Royse City (T P & L ) Substation will provide a second independent source of power into the City of Greenville This additional source will permit temporary outages of imported power from TMPA, recognizing that Greenville's generating facilities cannot supply the peak requirements after 1982 (c) The Bryan-Phase I project is vital in that a bulk source of power is needed to provide construction power for the Gibbons Creek Steam Electric Plant After construction, the 138 KV line will import power from Gibbons Creek plant to the Bryan area This will also permit outages of Bryan units The Bryan-Phase II project (Gibbons Creek to Keith to East) is needed to compensate for the loss of the Dansby 100 MW unit The Phase I line from Gibbons Creek to Atkins Substation cannot provide the needed requirements Also, the Gibbons Creek to Keith line will enhance the reliability of the Keith area that is served by Brazos (d) Nall Switching Station will provide an independent high voltage source of bulk power to the City of Bryan from Comanche Peak as well as the capability of service from the Gibbons Creek Plant (e) The Bryan capacitor bank, 21 6 WAR will supply the needed voltage suppport to the Bryan system during the construction of the Gibbons Creek Steam Electric Station - 7 - (f) The Garland-Phase I project consists of both 345 KV and 138 KV transmission lines In 1976, the Garland Power and Light Municipal System had a peak demand of 255 MW Extra high voltage bulk power lines will be a necessity in the near future Under the condition that Garland is supplying its own load by internal generation, the interconnected network supplying the general area including Dallas, Richardson, Mesquite and Garland will not perform adequately Thermal overloads and unacceptable voltage drops will occur for numerous single contingency conditions To alleviate the system problems encountered in 1980 as well as to provide for the delivery of bulk power from the Gibbons Creek plant during both peak and light load conditions, it is proposed to establish a primary bulk power source to supply the City of Garland by constructing a 12 mile, 345 KV line from TP&L Royse City substation to a new substation strategically located northeast of Garland (g) Denton Interconnection The electric peak demand in the service area supplied by the City of Denton and Brazos reached 164MW in the summer of 1976 The demand has grown concurrently with the area's strong economy, sustaining an annual growth rate of 14 40/ for the ten year period ending in 1975 The growth rate is projected to decrease to a more manageable 10 6% for the next five years Currently, the 69 KV and 138 KV subtransmission systems of the three companies are interconnected in a limited number of places and are supplied principally by the gas- fired 150 MW Collin Plant of TP&L, the gas-fired 168 MW plant of the City of Denton, and the 450 MVA Northwest Carrollton 345/138 KV substation of TP&L Limited support to the area system is also provided by the Rhome, Apollo and Spring substations For 1977 sumaner peak conditions, excessive thermal overload and intolerable voltage declinations will otherwise occur To restore the reliability of service to the area, a comprehensive program of system improvements is required as indicated by the possibility of a castastrophic collapse of the system To provide capacity to adequately serve the extraordinarily high rate of load growth in the area, a multi-step rather than a single step program is required To minimize the impact in an environmentally sensitive area and to avoid duplication of facilities, a coordinated program is required between TMPA and other utilities - 8 - (h) The Denton-Garland 345 KV transmission line and the 500 MVA Denton Central Station will provide high voltage bulk power support to the City of Denton This line will strengthen the TMPA transmission grid between the Cities of Denton and Garland and improve the overall reliability of the extra high voltage system interconnections that are vital for even single contingencies (i) The Comanche Peak-Parker project is to provide a bulk power source closer to the load center of TMPA as well as provide an alternate source during outages of Gibbons Creek Steam Electric Station (j) The reliable operation of the system depends on an adequate and effective communication and control system PASSED AND APPROVED this 20th day of June, 1977 Yresiaent, board or Director Texas Municipal Power Agency ATTEST cretary Board or Directors exas Municipal Power Agency - 9 ORy -7;--17 OR D 77-?7 CERTIFICATE OF CITY SECRETARY THE STATE OF TEXAS § § COUNTY OF DENTON § § CITY OF DENTON § I, the undersigned City Secretary of the City of Denton, Texas, DO HEREBY CERTIFY that according to the records of the City of Denton, of which I am custodian, that 1 The attached ordinance is a true and correct copy of an ordinance adopted by the governing body of the City of Denton on the 5th day of July,1977 2 At such meetings (a) a quorum of governing body was said date of adoption, in that of said governing body were in such meeting when the question of the ordinance was called fo a vote, and present on ,G-a members atten ance at of the adoption r and placed to (b) ov R members of said governing body voted for-the adoption of such ordinance and 6 - members of said governing body voted aga nst its adoption and members abstained from voting, and (c) the said ordinance was adopted only after a motion was made that the same be adopted and the seconding of such motion, and 3 Prior to such meetings (a) notice of the time, place, subject and purpose of the meeting had been duly given in the time, form, and manner required by the provisions of Section 3A of Article 6252-17, V A T C S (b) actual notice of the time, place, subject and purpose of the meeting had been given to each member of the governing body of the City 4 The members and officers of the governing body of the City of Denton as of the time of the passage of such ordinance were ELINOR HUGHES MAYOR BILL NASH ) MARY CLAUDE GAY ) COUNCILMEN JOE MITCHELL ) RICHARD 0 STEWART ) and the following persons hold the respective office listed after their name JACK OWEN ACTING CITY MANAGER BROOKS HOLT CITY SECRETARY PAUL ISHAM CITY ATTORNEY and the following persons are those individuals who have been designated by the City of Denton as its members on the Board of Directors of the Texas Municipal Power Agency JOE MITCHELL and E B (ERNIE) TULLOS That according to the records of my office (a) Ordinance number 75-22 adopted by the governing body of the City of Denton on the 18th day of July, 1975 (the "concurrent ordinance" providing for the creation of the Texas Municipal Power Agency under the provisions of Article 1435a V A T C S ) has not been amended or repealed, and that notice of the intention to adopt such ordinance was published in the Denton Record- Chronicle on July 2, 1975 and July 9, 1975, a true and correct copy of such ordinance and affidavit of publication relating thereto being on file and of record in the office of the Comptroller of Public Accounts, the same having been previously supplied to the Attorney General of Texas in connection with the two series of bonds of the Texas Municipal Power Agency which have been approved by the Attorney General of Texas (b) Ordinance Number 76-38 adopted by the governing body of the City of Denton on the 27th day of August, 1976, (which among other things approved Bryan Lignite Number One as a Project, certain System Development and Reliability Expenditures, and the execution of the Power Sales Contract by and between this City and the Texas Municipal Power Agency) has not been amended or repealed 6 That on the 8th day of May, 1975, the City of Denton, Texas, owned and operated its electric light and power system, including the facilities for the generation of electric power and on said date the City was actually engaged in the generation and sale of electric energy to the public, and The City of Denton is currently operating as a home rule City under the provisions of Article XI, Section 5 of the Constitution of the State of Texas, having adopted a home rule charter thereunder and that the home rule charter of the City has not been amended since the 3rd day of April, 1976 TO CERTIFY WHICH, witness my official signature and the seal of said City, this 5th day of July, 1/977 CO?Uy- Secretary , City o Denton, Texas (City Seal)