1975-034ORDINANCE NO 75-34
AN ORDINANCE by the City Council of the City
of Denton, Texas, relating to a contract by
and between the City of Denton, Texas, and
the Texas Municipal Power Agency, prescribing
the form of contract and authorizing the
execution thereof for and on behalf of the
City of Denton, providing an effective date
WHEREAS, the Cities of Bryan Denton, Greenville and
Garland, Texas, have heretofore by concurrent ordinances
provided for the creation of the TEXAS MUNICIPAL POWER
AGENCY under the provisions of Article 1435a, V A T C S ,
and
WHEREAS, such cities have reached an agreement with
each other and the Texas Municipal Power Agency with respect
to certain work that is to be done as a joint project, such
agreement being set forth in the contract attached hereto,
and
WHEREAS, it is now proper for this governing body to
approve such agreement and authorize the execution thereof
for and on its behalf, therefore,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION 1 That the instrument entitled, "Contract for
Development of Fuel Resources, Planning Electric Generation
Facilities and Performing Certain Duties," attached hereto
and made a part of this ordinance, is hereby approved
The Mayor is hereby authorized, empowered and directed
to execute such contract for and on behalf of this City and
as the act and deed of this governing body The City Secretary
is directed to attest to the signature of the Mayor and
impress thereon the seal of the City
SECTION 2 This ordinance shall be in force and effect
from an a ter its passage, and it is so ordained
PASSED AND APPROVED this the =day of October,
1975
ATTEST
i
CiV retary, City o Denton,
Texas
(City Seal)
7 /S 73 / 10-2-75
H
CONTRACT FOR DEVELOPMENT OF FUEL RESOURCES,
PLANNING ELECTRIC GENERATION FACILITIES AND
PERFORMING CERTAIN DUTIES
THIS INSTRUMENT embodies four separate contracts, which
for the most part are identical, in order that all parties
.signatory will be apprised of all contents and under no
circumstance does one city assume an obligation, which under
.the terms hereof, is assumed by another city. These contracts
:are made and entered into as of the /.S" day of September,
;1975, the first contract is by and between the TEXAS MUNICIPAL
POWER AGENCY (hereinafter called "Agency"), and the City of
.-.'Bryan (hereinafter called "Bryan"),,and a second contract is
by and between the Agency and the City of Denton (hereinafter— -
;called "Denton"), and a third contract is by and between the
Agency and the City of Garland (hereinafter called "Garland"),,
and a fourth contract is by and between the Agency and the
City of Greenville (hereinafter called "Greenville"), each
'of such cities being a municipal corporation organized and
existing under the Constitution and laws of the State of
!Texas (hereinafter collectively called "cities" or "each
:city" or "the city"), and each of such parties being a
political subdivision of the State of Texas, and a body
politic and corporate.
W I T N E S S E T H
WHEREAS, under the provisions of Article 1435a,-V.A.T.C.S.,
entities engaged in the generation, transmission, or distri-
bution of electric energy may join together as co-tenants or
co-owners'-in the planning, financing, acquisition, construction,.
ownership, operation and maintenance of electric generating
units and plants, electric transmission lines and other
electric facilities; and may enter into agreements for the
planning, financing, acquisition, construction, ownership,
operation and maintenance of jointly owned and operated
electric facilities; and
WHEREAS, acting pursuant to Section 4(a) of Article
1435a, V.A.T.C.S., the Texas Municipal Power Agency has been
created and established as a municipal power agency (without
taxing power) as a separate municipal corporation, a political.
subdivision of the State and a body politic corporate, and
such agency has and may exercise all of the powers which are
by Chapter 10 of Title 28, Revised Civil Statutes of Texas,
1925, as amended, and Article 1435a conferred upon a public
entity or entities; and
WHEREAS, the Agency is empowered to make contracts and
agreements with municipalities, political subdivisions of
the State, and public or private corporations or persons and
perform all acts necessary for the exercise of the full
powers invested in it; and
WHEREAS, by virtue of the foregoing, each of the parties
} hereto is empowered to execute this contract; now, therefore,
THE PARTIES TO EACH CONTRACT, IN CONSIDERATION OF THE
MUTUAL AGREEMENTS AND UNDERTAKINGS HEREINAFTER SET FORTH,
HEREBY CONTRACT AND AGREE AS FOLLOWS:
ARTICLE I
SECTION 1.01: As the basis for its entering into this
contract, tTie parties to these several contracts each make
the following findings of fact:
j (a) The Cities of Bryan, Denton, Garland and Green-
ville and the Brazos Electric Power Cooperative, Inc.
(hereinafter collectively referred to as "entities'.'):
(1) each maintain its own electric generating
facilities to meet power and electric energy
requirements for its own electric system; and have
entered into a pooling agreement with each other
for the purpose of:
(i) effecting investment and operating
economies by pooling the use of reserve
electric capabilities and capacities; and
(ii) obtaining power during emergencies and
scheduled maintenance service; and
(2) are members of the Texas Interconnected
System so that the generation plus purchased power
will equal forecasted peak demands increased by
15% in order to provide the pro rata share of the
reserves required by the Texas Interconnected.
System; and
- -T- ---(3)--endeavor-to -carry.a spinning reserve above-.-,---
load requirements, as required by Texas Inter-
connected System; and
(4) have electrical systems which are connected
by more than 1900 miles of transmission lines
which extend southward from the Oklahoma border to
just north of Houston, as well as from Bryan to as
far west as Seymour with coordination of generation
and transmission now being provided by a central
dispatching center in Waco, Texas, (which center
i coordinates the level of generation of each plant- .
and the control of the system transmission lines
and substations), and
(5) now have a basic transmission interconnection
between the parties which are provided through 69-
and 138 kv transmission facilities of the Brazos
Electric Power Cooperative, Inc., and it some
instances direct connections between the parties
and privately owned utilities in the areas of
service.
(b) On a national level load growth for electric
systems has doubled approximately every 10 years but
the load growth of the entities' systems has almost
quadrupled in approximately 11 years, and the projected
power requirements of the entities indicate that additional
generating and transmission facilities will be required
each year of the next decade-and a-half in order to meet.
peak demands needed by the year 1990; and
(c) It appears that small independent plants will not
meet the needs of the future (1) because of their
higher construction and operating costs which result in
power costs higher than for larger, more efficient
plants, and (2) larger plants would provide for efficient
utilization of generation and tramsmission facilities,
increased reliability and a reduction in multiple
planning and operating costs, and reduced environmental
problems; and
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(d) In connection with the plans of the parties hereto
to acquire and obtain additional generation facilities
it is apparent that a new supply of fuel will be required
since (1) natural gas is the primary fuel source for
the generating facilities for each of the entities, and
(2) the supply of natural gas as a fuel is of questionable
dependability and duration in the light of existing
supply contracts and the impending curtailment of
delivery and restrictions on the use of natural gas for
boilers; and (3) it is also apparent that the construction
of a large lignite fired generating plant by this
entity acting alone would not be economically feasible;
and
(e) A consideration of the load growth of the parties
indicates that projections could vary from the histor-
ical trends but sharing of capacity with other entities
will reduce the hazards of incorrect load projections
for the entity and judicious adjustment may be made in
the date for placing new joint facilities in service;
and
(f) It appears that there is a need to expand joint
efforts of the parties to include not only the sharing
of the reserves but also the benefits of economic dis-
patch and savings in capital costs by the construction
of large units in a coordinated plan; and
(g) Petroleum products, particularly natural gas, have
increased in price from 3 to 5 times, and natural gas
curtailments have occurred on a random basis with
serious consequences in fuel supply problems by the
entity, and additional curtailments are being ordered
by various regulatory agencies and the increasing of
coal production is a long slow process, and it is
hampered in part by environmental restrictions prohibiting
the use of coal and petroleum products with a high
sulphur content; and
(h) The uninterrupted and adequate supply of fuel is
essential to the continued operation of the generating
facilities which mandates the development of fuel
supplies controlled by the entities; and
(i) In the investigation by the entities of certain
lignite deposits preliminary indications are that a
sufficient quantity of lignite exists to warrant the
of_ a_lignite_fired genera_ting__plant_but
the information received to date requires additional
verification, and if the estimated quantities are
reasonably confirmed, additional expenditures will be
required to obtain options, royalty contracts, etc; and
(j) The lignite deposits might be of adequate quantity
and acceptable quality which could be utilized with
moderate problems of combustion and handling should it
be determined that the lignite exists in commercial
quantities; and
r-
(k) Consideration should be given to the desirablity--
of owning coal deposits in order to obtain a long term
supply or in the alternate, contractual arrangements
should be made with coal vendors who would indicate a
reasonable savings to the parties if ownership of such
resources and facilities necessary to mine and transport
the fuel can be properly financed and careful analysis
is required to determine the extent of capital funds
which would be needed to insure the dedication of
adequate reserves for long term utilization by the
process of disbursing substantial "front end money",
and other capital funds would be required or be better
expended for transmission, generation and transporta-
tion facilities (if given a higher priority) than
owning fuel resources; and
(1) The acquisition of fossil fuel resources at locations
other than the generating plant site will require
transportation of fuels from one or more geographical
locations in accordance with a particular state of the
art for each type of fuel whether it is solid, liquid
or gaseous; and
(m) Until such time as there is a definite commitment
for coal or lignite (either or both) resources and the
established magnitude of fuel to be transported in any
given year it is not possible to identify with accuracy
anticipated transportation costs; and
(n) It appears that additional investigations should
be made to determine whether various types of trans-
- - portation_facilities-could_ be. leased,- thereby increasing
the maintenance and operating expenses, or whether it
would be more economical to purchase such facilities;
and
(o) Nuclear generating plants both planned and under
construction have been subjected to vigorous opposition
causing substantial delays in the construction and
availability of electric energy; and
(p) The refinement, enrichment, conversion and fabrication
of nuclear fuel involves long lead time commitments
similar to developing new coal resources, and the cost
of one component of nuclear fuel (uranium) has almost
quadrupled in the past 2 years so that the supply of
domestic uranium is anticipated to be extremely tight
by 1980 so as to cause an increase in the price of such
fuel; however, nuclear generation may economically
supply a portion of entities' generation requirements;
and,
(q) Transmission planning studies cannot be refined
until final generation plans have been completed and
sufficient information has been assembled to enable
preliminary transmission arrangements to be developed
and additional study is required in connection with
such transmission plans; and
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(r) Transmission costs
mileage as well as the
would be required; and
involve the computation of
number of substations which
(s) The planning of the expansion of electric generat-
ing facilities in the magnitude being considered by the
parties requires an identification of potential water
resources which might be utilized for plant cooling,
the specific type of cooling system for which the plant
is designed determining to a large extent the cooling
requirements since the total water makeup requirements
could generally be expected to be between 1/2 and 1
gallon per kilowatt hour for evaporative and blowdown
losses; and
(t) The range of water utilization would also depend
upon whether the plant utilized water for its cooling
systems or whether dry towers were used where water is
utilized only for boiler blow-down, and the variables
involved in the utilization of cooling water requirements
indicate additional capital cost or annual operating
cost would vary so that a study is needed in order to
determine which is the most economical for the parties;
and
(u) Power flow analyses are needed in order to deter-
mine transmission requirements, and environmental and
economic considerations require the opportunities for
joint planning and coordinated development of trans- - -
__-mission with other area utilities; and
(v) The question arises whether combustion turbines should
be added so as to relieve a portion of the deficiency
in capacity and energy for the period of 1978 through
1982 even with the increasing cost and reduced availability
of natural gas and liquid petroleum fuels but it would
be feasible to further investigate to determine if the
combustion turbines could be used as the initial building
block for the installation of combined cycle generating
facilities, but the type of combustion that should be
used will vary with the amount of time per year that it
will operate. The approach of adding a combustion
turbine with an existing unit requires detailed analysis
so that consideration may be given to the anticipated
life of the existing equipment in connection with the
cost analysis which must be developed, and it further
appears that steam pressure and temperature conditions
for existing turbines would affect the approach and
cost that would be used; and
(w) The delegation of dispatch responsibility for the
resources-of the parties-to a central coordination. .
center would be an improvement in the overall economics
of operation although local conditions such as minimum
load restrictions on units, limitations on incoming
transmission line or transformer capabilities, and the
need to operate generation for voltage support might
place some constraintants on dispatching; and
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(x) Each entity-will receive a benefit from the expenditures
-which are to be made and-for the services and work to
be performed under the provisions of this contract
since (1) each of the engineering studies are needed in
order that an informed judgment may be made as to the
extent that this entity should proceed with the proposed
joint endeavors, and such studies will also give this
governing body the information that is needed with
respect to some of its own operations so improvements
in procedures may be perfected, and (2) it is necessary
to acquire and develop new fuel sources which may be
used and utilized for generation, and it is essential
that a fuel supply be obtained and developed prior to
the determination of the location of proposed generating
units, and (3) the construction of the interconnection
with the private utilities and the transmission lines
to be constructed are needed to provide capabilities of
exchanging electric capacity and energy between entities,
and (4) storage facilities for an emergency fuel (in
the event of natural gas curtailment) are needed, and
(5) feasibility studies must be made for the purpose of
obtaining financing for some of the above mentioned
facilities; and
(y) A nationally recognized consulting engineer has
extensively studied the alternatives of independent and
joint action in obtaining generating and transmission
and developed estimates of the costs of both which show
savings ranging from-$56,000,000 to $1,013,000,000 over
the period from 1983-1994 due to joint efforts.
The governing body of each of the cities signatory
specifically finds:
(i) the foregoing facts are true and recognizes that a
joint effort with the other entities is the best course
- - ---of--action--in-meeting-its-power- -supply- and -transmission
requirements for the future; and
(ii) that the benefits to be received by such city will
be in excess of the costs which it is obligated to pay
hereunder (particularly since such costs are to be
shared by others); and
(iii) the engineering studies proposed to be made
hereunder relate to facilities which are required in
order for the electric light and power system of such
city_to_provide efficient service; and
(iv) the improvements proposed to be constructed or
acquired by the Agency hereunder are needed to insure
that electrical energy may be made available for use
and distribution by the electric light and power system
of such city and thereby provide adequate service to
the customers of the city's distribution system.
In the making
forth a portion of
same are not to be
third parties have
verification.
of findings herein, the parties are setting
the reasons for the execution hereof, and the
considered as representations upon which
any right to rely without independent
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i
SECTION 1.02: The parties signatory, in recognition of
-the facts set~lorth, believe .there is a need for immediate-
,steps to be taken in the planning of a cooperative endeavor
'under the provisions of Article 1435a, V.A.T.C.S., as well
,as the necessity for immediate steps to be taken in the
;development of an adequate fuel supply for the proposed
:generating facilities.
SECTION 1.03: The City agrees and covenants with the
Agency tat to --t-Tie extent it may legally do so:
(a) The City will not hereafter make any expenditure
of funds for the purpose of constructing or acquiring additional
:electric generating capabilities (including improvements to
or extensions of presently existing generating facilities
which increase the rated capacity of such existing facilities
by more than 10% in any two year period) other than those
,generating facilities under contract for construction or
under construction as of the date of this Agreement, or
-other improvements__(not_additions to the plant) which have the
result of increasing the rated capacity of the generating
'facilities to such an-extent within such periods, unless:
(1) it has obtained the approval of the same as a
joint project from the governing bodies of the Agency
and the Texas Power Pool, Inc. (hereinafter called
the "Corporation"), or
(2) the governing bodies of either the Agency or the
Corporation fail to approve the same as a joint
project for a period of 90 days after written
notice is given to them by the City that the City
wishes to proceed with the project.
(b) The City will not hereafter make any expenditure
for the purpose of constructing or acquiring additional
transmission facilities which will interconnect with any of
'-the-facilities of the Cities-or-any joint projects which-are primarily for transmitting power to Brazos or the Cities
unless:
(1) it has obtained the approval of the same as
a joint project from the governing bodies of the
Agency and the Corporation, or
(2) the governing bodies of either the Agency or the
Corporation fail to approve the same as a joint
project for a period of 90 days after written
notice is given to them by the City that the City
wishes to proceed with the project.
(c) The City will not make any expenditure for the
acquisition of a fuel supply (other than natural gas, oil,
diesel) for its electric generating facilities unless:
(1) it has obtained the approval of the same as
a joint project from the governing bodies of the
Agency and the Corporation or
(2) the governing bodies of either the Agency or the
Corporation fail to approve the same as a joint
project for a period of 90 days after written
notice is given to them by the City that the City
wishes to proceed with the project.
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D
(d) The City will not hereafter enter a contract for
'the purchase by it of capacity or electric energy to meet
,load plus reserves with any entity other than the Agency,
Brazos or the cities unless:
(1) it has first offered in writing for a period
of ten consecutive days to purchase such capacity
or energy from the Agency, Brazos or from one of
the cities (under the same terms and conditions),
and such offer has not been accepted in writing,
or
(2) Brazos and the other cities and the Agency
notify the City in writing, that no capacity or
energy is available in the quantity (under the
same terms and conditions) and for the period of
time requested by the City.-
i The provisions of this paragraph (d) have no application
'to the purchase of capacity or energy (i) on an emergency or
,stand-by basis, or (ii) under a contract having a duration
of less than two years (including any renewals thereof), or
(iii) for power or energy incident to.the construction and
testing of any facilities constructed by the Agency or its
agents, or (iv) on the basis of economic dispatch ["economic
dispatch" means the allocation of the total generation
required of the pool to alternate.available sources in order
'to achieve the best possible pool economy consistent with
!safe, effective operation. (Factors to be considered in
;determining the best possible economies include line losses,
generator efficiencies, fuel costs, load limits of generators,
transmission line load limits, purchase power costs, and
-fuel, generation, and purchased power contractual obligations)]
between the Cities, the Corporation, the Agency and Brazos,
any or all, or (v) under the existing contract with Texas
;Municipal Power Pool, Inc.
(e) The City will not hereafter enter a contract for
the sale by it of capacity or energy to an entity other than
the Agency, Brazos or the cities unless:
(1) it has first offered in writing for a period
of ten consecutive days to sell such capacity or
energy to the Agency, Brazos or to one of the
cities (under the same terms and conditions), and
such offer has not been accepted in writing, or
(2) Brazos, the Agency, and the other cities
notify the City, in writing, that no capacity or
energy is required in the quantity (under the same
terms and conditions) and for the period of time
offered by the City.
- The provisions of this paragraph (e) have no application
to the sale of capacity or energy (i) on an emergency or
(stand-)y basis or (ii) on a contract having a duration of
less than two years (including any renewals thereof) or
(iii) for purchase of power incident to the construction and
testing of any facilities constructed by the Agency or (iv)
,the basis of economic dispatch between the Cities, the
.Corporation, the Agency and Brazos, any or all, or (v) to
customers who are not Class 1 utilities (under F.P.C. guidelines)
:except at isolated points, ("isolated points" means a location
at which power and energy from a transmission or distribution
system of one entity is delivered as purchased power at the
distribution system of another entity, or to one of its
members, subsidiaries or customers), or (vi) to municipal
corporations that are not then interconnected with other
utility companies or (vii) under the existing contract with
:Texas Municipal Power Pool, Inc., or (viii) to another
distribution system which is owned by a city and operated by
the city seperately and apart from the City's system.
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The purpose and intent of paragraph (e) is to prevent
the sale of surplus electric energy or capacity by the City
!to others than Brazos, the other cities or the Agency if
such energy or capacity (1) is required to meet the needs of
Brazos or the cities and (2) may be made available to them.
alt is not intended to prevent the sale of electric energy or
capacity to regular customers of the City.
ARTICLE II
SECTION 2.01: In connection with its undertakings
hereunn eac City represents as follows:
(a) In its capacity as a duly incorporated city of
Texas, it is empowered under applicable laws to
enter into the engagements prescribed for it under
this agreement and to perform all obligations
which may result therefrom and its governing body
has duly authorized execution of this agreement.
(b) It will timely pay to the Agency the full amount
it is required to pay under the provisions of this
contract for the services supplied by or work
performed by the Agency.
(c) That it will (i) plan, construct, maintain and
finance its electric transmission and distribution
system, and (ii) set and collect rates to customers
for electric service adequate to meet its obligations,
including those hereunder.
(d) That it will cooperate with the Agency in the per-
formance of the duties and responsibilities assigned
to the Agency by this contract.
SECTION 2.02: Agency represents to the City and agrees
'with sucT-party that it will do or will cause the following
to be done:
(a) prepare comprehensive plans for the generation
of capacity and energy and the transmission thereof
to mutually agreed upon load centers. The planning
by the Agency shall be comprehensive in nature,
shall consider the sources of fuel and water, uses
thereof, recycling, pollution sources and pollution
abatement techniques;
(b) join in the performance of planning functions
and enter into planning agreements for such term
and upon such conditions as may be deemed desirable
- - so-as-to--provide-coordinated planning on an ar_ea-
wide scale;
i
(c) evaluate the planning as facilities are completed;
(d) coordinate and monitor the design, construction -
and operation of joint facilities;
(e) coordinate and monitor the economic dispatching
of generating facilities;
(f) provide accounting and cost allocation for above
activities.
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ARTICLE III
SECTION 3.01: The work to be done by the Agency, either
!throug its own representatives or authorized agents or
under contract with others, by virtue of this contract is
as follows:
(a) Fuel development
A
Bryan lignite:
drilling, logging, coring, surveying,
testing and analysis to accurately
determine the quality and quantity of
the lignite deposits; acquisition of
land or interest therein.
The Agency shall retain such geologist
or fuel consulting firm (either or both)
as in its judgment is required to make
appropriate determinations (based on
such drilling, logs, corings, surveys
.and analysis) as to whether such lignite
deposits are of commercially mineable
quality and quantity. The Agency shall
utilize bond proceeds only for the
acquisition of land or interest therein
as meet the criteria established by such
geologist or consultants.
The estimated budget submitted by the
Agency as guidelines for such proposed
operation being as follows:
Estimated Short Term Item Estimated Cost
Paul Weir Studies $ 226,500
Aerial Surveying 95,000
Drilling and geological analyses 519,000
Land men 316,000
Lease options 40,000
i Leases of land 60,000
Purchase options 25,000
Purchases of land 3,600,000
Lease conversion bonus 105,000
Geologist lease conversion fee 150,000
Preliminary engineering studies 100,000
Environmental and air quality studies 150,000
Legal evaluation of deed, titles 50,000
Testing of cores, samples 35,000
Miscellaneous 100,000
$5,571,500
Other lignite:
drilling on exploratory basis and pre-
liminary leasing (under terms and conditions
similar to those set forth with respect to Bryan
lignite)
$ 150,000
Western coal:
negotiations and minor development expenses
in order to determine availability of
coal as a fuel supply.
$ 25,000
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(b) Engineering Studies
Combustion turbines
Evaluation of alternates
simple cycle combustion turbines
regenerative cycle combustion turbines
combined cycle generation
combustion turbines connected to
supply waste heat to older existing
units
negotiation of firm power purchase
contracts with other suppliers of
electric energy
Preparation of feasibility study for financing
Economic Dispatch:
Tests on performance of
the cities of Bryan, De
and the Brazos Electric
study of existing power
engineering accounting,
on accounting criteria;
and personnel.
$ 50,000
generating units of
iton, Garland, Greenville
Power Cooperative, Inc.;
pools; studies in
computer analysis
operating guidelines
$ 107,000
Comanche Peak Nuclear Plant:
Engineering study on feasibility of 10%
participation in the plant.
$ 50,000
Village Bend Pumped Storage:
Project investigation under application hereto-
fore approved by the Federal Power Commission,
Phases IA and 1B only (the work prior to
Project Evaluation Report).
$ 125,000
Microwave Conununications System:
Path and site location studies and contruction
of the facilities.
$ 550,000
Transmission Planning Studies:
Evaluation of alternate transmission plans.
$ 40,000
Texas Interconnected System Studies:
Gathering of data on load flow, short circuit,
power transfer, stability, etc.
$ 5,000
Fuel Studies:
Development of a fuel management study,
(quantities consumed, usage patterns etc.)
by computer analysis.
$ 10,000
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Cost of Service Studies:
A detailed study of all. costs involved in
the generation and transmission of capacity
and energy.
$ 4,000
(c) Construction:
Interconnection with private utilities.
$1,084,000
Olinger-Greenville Transmission line -
additional connection of Greenville and Garland
for emergency power: engineering and pre-
liminary construction expense.
$1,000,000
(d) Acquisition of storage facilities for oil (emergency
fuel supply). 430,000
SECTION 3.02: The amounts hereinabove set forth are
those w is tH Agency feels are proper amounts for the
respective purposes; that the amounts shown are the approximate
anticipated expenditures through June, 1976.
SECTION 3.03: It shall be the duty of the Agency to
amplify a project budget of proposed capital expenditures as
may be required by it so as to insure the foregoing project
is accomplished, and the transfers of money from one item to
another may be made by the Agency, but no more than 25% of
the amount budgeted for one item (listed in Section 3.01) in
excess of $50,000 nor more than 50% of the amount budgeted
for one item of $50,000 or less, may be transferred to one
or more other items without approval of such transfer by the
weighted majority vote of the directors of the Agency as
well as a weighted majority vote of the Agency's Board as
contemplated by the Rules and Regulations of the Agency.
SECTION 3.04: Any study made, including all preliminary
and fin'-T reports, as a result of this contract shall be
made available to each city. Any facilities constructed or
acquired pursuant to this contract during their useful life,
shall be the property of the Agency but shall be available
for use by each city, subject to a charge for maintenance
and operating expenses (based upon the percent of the capacity
used) of such facility while being so utilized.
i
Any interest in land or fuel obtained as a result of
expenditures made pursuant to this contract shall be and
remain the property of the Agency, and fuel shall be made
available for use in the generation of electric energy as
contemplated by the remainder of this Section.
The parties hereto recognize that the purpose of this
agreement is to provide for certain preliminary expenses of
the Agency with the view that the Agency will be in position
to acquire and construct (and provide fuel for) additional
electric generation facilities so as to provide electric
energy to the cities and Brazos.
For and in consideration of the agreements of the
cities and Brazos contained in the contracts being simultaneously
executed, the Agency has and does hereby agree to deliver to
Brazos and the cities energy produced by the electric generating
facilities that the Agency may hereafter acquire, utilizing
the fuel acquired under the provisions hereof, subject to
the limitations of this Section.
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The amount of electric energy made available to each of
the cities (and to Brazos under the contract mentioned) at
the bus bar of the Agency's generating facilities shall be
.that amount of electric energy the value of which equals the
,amount which has been paid by the cities and Brazos, respectively,
.as debt service payments.
Such value of electric energy shall be determined on
;the basis of cost of service studies with regard to producing
such energy (as determined by a registered professional
engineer employed by the Agency).
In the event the Agency does not acquire a generating
facility capable of utilizing the fuel acquired hereunder,
:the Agency, upon the sale of such fuel, shall credit Brazos
Viand each of the cities with the proportionate share of the
.receipts from such sale (based upon debt service payments
;made by each such contracting party).
ARTICLE IV
SECTION 4.01: As used in this instrument, the term
"debt of--U~e- Agency" means the principal of, interest on,
,reserve fund for, and any applicable redemption premium with
respect to the initial series of bonds of the Agency known
as "TEXAS MUNICIPAL POWER AGENCY REVENUE BONDS, SERIES
1975," dated September 15, 1975, to be authorized in a principal
amount of not to exceed $10,625,000. The term does not
include any bonds or other obligations issued for the purpose
of refunding, cancelling, and in lieu of such Series 1975
,bonds. The parties contemplate that a new contract will be
,executed in the event such Series 1975 bonds are refunded or
,if additional bond obligations are issued by the Agency
'which pledge any income, revenues or payments received from
a city by the Agency.
SECTION 4.02: (a) For and in consideration of the
under-t-aTi'ngs o the Agency each City agrees that it will pay
to the Agency an amount of money for the payment of the
city's part of the (1) maintenance and operating expenses of
the Agency and (2) the debt of the Agency.
(b) The amount to be paid by each city for the payment
of such maintenance and operating expenses shall be as
,follows:
.16 mills for each kilowatt hour of net energy for load
of that particular city's Electric System or Systems
during the fiscal year of the Agency. The term net
energy for load" shall have the meaning set forth on
F.P.C. form, 12 E-1, page 5, Schedule I; i.e., the
system net generation plus energy received from others
minus energy delivered to others. The amount due from
each city shall be divided into 12 approximately equal
monthly payments based upon the estimated net energy
for load. Such estimate to be made as follows: (1)
on or before the first day of each fiscal year, the
utility director of each city shall file (with the
Executive Director of the Agency) a report containing
his estimate of the net energy for load for the such
city for the following 24 month period and from such
report the arithmetic average of the particular year
shall be determined (such report may be amended by the
utility director of a city not more than twice in any
one fiscal year) and (2) the arithmetic average of net
energy for load of each particular city for the preceding
fiscal year of the Agency shall be calculated, and (3)
if the estimate of the utility director is not timely
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filed the average of net ,energy for load on the historical
12 month period shall be used until such estimate is
filed but if the estimate is filed the higher of the.
calculations obtained under (1) and (2) above shall be
used as the estimated net energy for load. Within 10
days:of the close of a fiscal year, the Executive
Director of the Agency shall redetermine the amount which
should have been paid in the preceding fiscal year and
the additional amount due shall be billed to the city
or credit shall. be given to the city on the billing
which"becomes due October 15. If the additional amount
due from a city is more than 5%. of the amount paid by,
the city during the preceding year, an amount equal to.
10% of the amount due shall be added to the statement
and shall be paid by it.
Such payments shall be made on or before the 15th day
of each month (commencing October 15, 1975), and the
Agency covenants that money received under this agreement
will be used only for the purpose of paying its maintenance
.and operating expenses and only for items or expenses
which have been included in a proper budget or budget-
amendment (including a temporary budget).
The amount to be paid for each kilowatt hour of'net
energy for load shall be subject to adjustment from time to
(time in the following manner:
(1) It may be raised if the Agency notifies the-City
that the amount of.income being received for the payment of
maintenance and operating expenses is not sufficient for the
purpose and that'the amount being collected from each entity
contracting with the Agency is.be.ing increased proportionately;
such notice shall show the basis of the adjustment (increase).
so as to provide not less than the amount budgeted for such
'expenses during the then fiscal year and not-more than 110%
of such budgeted amount. No raise in the amount due from an .
'entity shall be effective until such entity has.received 30-.
;days notice of the revision, but a city may delay paying the
'increased amount until 60 days after the receipt of such
:notice of revision provided (i) it notifies the Agency in
writing of its intention so to do and (ii) pays the amount
'due from the effective date of the increase on such sixtieth
day.
(2) It shall be decreased if the amount received by
;the Age_ncy.for the payment of the maintenance and operating T
}expenses exceeds 125% of the amount shown in the annual
budget therefor (for the then current fiscal year) and the
`millage rate will be reduced so as to provide not less than
the amount budgeted annually for such expenses during the
then current fiscal year and not more than 110% of such
'budgeted amount.
Any surplus (an amount in excess of 110% of the amount
;budgeted for such expenses) shall be either:
(1) applied as a deduction from the amount due from
,the City during the next succeeding month or months, or
(2) maintained as working capital by the Agency, as
;directed by the entities who provided the funds. In the
:absence of a direction being received from the City, money
:supplied by the city shall be applied as a deduction from
;the amount due from the City. Any surplus which is in
excess of 125% of the amount shown in the budget for maintenance
;and operating expenses shall be returned to the entities who
supplied the funds. The credits or repayment of funds shall
:be given or made in the same proportion as the funds were
originally paid for such expenses.
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It shall be the duty
of the Executive Director of the
Agency to make the calcula
tions with respect to the rate per
mill to be collected for e
ach kilowatt hour of net energy
for load'.
The payments to be ma
de under this paragraph (b) shall
cease and terminate when t
hree monthly payments have been
i made after the debt of the
Agency is paid off, cancelled or
refunded.
(c) The amount to be
paid by a city for the amorti=
zation of the debt of the Agency (herein sometimes called
debt service payment) shal
l be in the amounts and be paid on
or before the date shown:
(1) by the City
of Bryan:
Date of payment
Amount
9-15-76 through 8-15-77
$30,184.67
9-15-77 through 8-15-78
32,006.17
9-15-78 through 8-15-79
32 002.25
,
'9-15-79 through 8-15-80
27
389.92
~9-15-80 through 8-15-81
27,213.00
.9715-81 through 8-15-82
27,341.67
9-15-82 through 8-15-83
27,341.67
'9-15-83 through 8-15-84
27,213.00
9-15-84 through 8-15-85
1,740.07
$232,452.42 X 12 = $2,789,429.04
plus 19.3% of the fees of the paying agent bank (for the payment
:of the principal of and interest on the bonds on the next interest
payment date) shall be paid on or before February 15 and'August
415 of each year upon being invoiced by the Executive Director
of the Agency.
The foregoing payments include the city'.s portion of
the money required to be paid into the reserve fund in the
,years 1977 through 1979 under the resolution authorizing the
iissuance of the bonds described in Section 4.01.
(2) by the City of Denton
Date of pa
yment
Amount
9-15-76
through
8-15-77
$23,459.60
9-15-77
through
8-15-78
24,875.23
9-15-78
through
8-15-79
24.887.75
9-15=79
through
8-15-80
21,287.50
9-15-80
through
8-15-81
21,150.00
9-15-81
through
8-15-82
21,250.00
9-15-82
through
8-15-83
21,250.00
9-15-83
through
8-15-84
21,150.00
9-15-84
through
8-15-85
1,352.42
$180,662.50 x 12 = $2,167,950.00
plus 15% of the fees of the paying agent bank (for the payment
of the principal of and interest on the bonds on the next interest
payment date) shall be paid on or before February 15 and August
15 of each year upon being invoiced by the Executive Director
of the Agency.
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The foregoing payments include the city's portion of
the money required to be paid into the reserve fund in the
years 1977 through 1979 under the resolution authorizing the
issuance of the bonds described in Section 4.01.
(3) by the City of Garland:
Date of pa rment
9-15-76
9-15-77
9-15-78
9-15-79
9-15-80
9-15-81
9-15-82
9-15-83
9-15-84
through
through
through
through
through
through
through
through
through
8-15-77
8-15-78
8-15-79
8-1.5-80
8-15-81.
8-15-82
8-15-83
8-1.5-84
8-15-85
Amount
$52080.42
55,,223.09
55,250.83
47,258.25
46,953.00
47,175.00
47,175.00
46,953.00
3,002.25
$401,070.84 x 1.2 = $4,812,850.08
;plus 33.3% of the fees of the paying agent bank (for the payment
-of the principal of and interest on the bonds on the next interest
;payment date) shall be paid on or before February 1.5 and
August 15 of each year upon being invoiced by the Executive
Director of the Agency.
The foregoing payments include the city's portion of
the money required to be paid into the reserve fund in the
;years 1977 through 1979 under the resolution authorizing the
;issuance of the bonds described in Section 4.01.
(4)
by the City
of Greenville:
Date of pa
yment
Amount
9-15-76
through
8-15-77
$11,573.42
9-15-77
through
8-15-78_
12,271.75
,9-15-78
through
8-15-79
1.2,277.92
9-15-79
through
8-15-80
10,501.83
9-15-80
through
8-15-81
10,434.00
19-15-81
through
8-15-82
10,483.33
9-15-82
through
8-15-83
10,483.33
9-15-83
through
8-15-84
10,434.00
9-15-84
through
8-15-85
667.17
$ 89,126.75 x 12 = $1,069,521.00
plus 7.4% of the fees of the paying agent bank (for the
payment of the principal of and interest on the bonds on the
next interest payment date) shall be paid on or before
February 15 and August 15 of each year upon being invoiced
by the Executive Director of the Agency.
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The foregoing payments include the city's portion of
the money required to be paid into the reserve fund in the
years 1977 through 1979 under the resolution authorizing the
issuance of the bonds described in Section 4.01.
Except as provided in Section 4.07, the debt service
payments under this contract shall cease and terminate when
the debt of the Agency is paid, refunded, or refinanced.
(d) In the event Brazos exercises its option to purchase
a total undivided interest in the project (so as to increase
the percentage of ownership from 3% up to 40% as permitted
in the Preliminary Participation Agreement), and bonds of
the Agency are retired, an adjustment in the debt service
payment shall be reduced in accordance with Exhibit A attached
hereto.
SECTION 4.03: Should the City fail to make any payment
at the t mes Herein specified, interest on such amounts
shall accrue at the rate of ten per centum (10%) per annum
from the date such payment becomes due until paid in full
with interest as herein specified. In the event such
payment is not made within sixty (60) days from the date
such payment becomes due, the Agency may institute a proceeding
for mandamus or mandatory injunction requiring the payment
of the amount due and interest thereon, such action to be
instituted in a court of competent jurisdiction.
SECTION 4.04: The payments required to be made by the
City under the terms of this contract shall be due and
payable as herein specified, and the City shall have no
right of setoff, recoupment or counterclaim against such
payment. The Agency shall never have the right to demand
payment of any obligation assumed by the City out of funds
raised or to be raised by taxation. Any obligations assumed
or imposed on a party hereto shall never be construed as a
debt of such party of any kind as to require it under the
'Constitution and laws of this State to levy and collect
taxes to discharge such obligation, it being expressly
understood by the parties hereto that the funds required for
all payments due by City are to be collected from the sources
referred to in the next succeeding section.
SECTION 4.05: (a) The City represents and covenants
that aft payments to be made by it hereunder shall consti-
tute "operating expenses" of its electric system which
serves the inhabitants of the city with the effect that the
obligation to make such payments from such utility system
revenues under this contract shall be an operating expense
as defined by Article 1113 of the Revised Civil Statutes of
Texas, 1925, as amended.
(b) The City further agrees to fix and collect such
rates and charges for such electric services to its customers
as will, in combination with any other funds legally available
and reasonably assured for the purpose, make possible the
,prompt payment of all expenses of operating and maintaining
;such electric system and all payments contracted hereunder.
SECTION 4.06: The Agency may pledge all or part of the
payments to e received from the City under Section 4.02 (c)
of this agreement to the payment of the debt of the Agency
(as such term is defined in Section 4.01).
SECTION 4.07: (a) The parties recognize that a city
may not withdraw from the Agency if the same would impair
the obligation of contract. Should a city determine it
wishes to withdraw from the Agency, so the same may be again
created under applicable law, it shall give notice to the
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Agency at least 90 days„prior,to.i.ts anticipated withdrawal.
(b) Such withdrawal (so as not to impair contractual
obligations) shall have the following effect upon the
rights of the city so withdrawing:
(1) The city shall, from and after the withdrawal
date specified in its notice, not be obligated to
make any further payments for which provision is
made in Section 4.02 (b), the maintenance and
operating expenses of the Agency.
(2) The city shall be obligated to continue to
make the payments required to be made under the
provisions of Section 4.02 (c), the debt service
payments, provided however, if such withdrawal is
prior to the time the debt of the Agency is paid,
the total amount to be paid by the withdrawing
city may be paid in a single payment in which
event the interest on the debt of the Agency
(which is included in the calculations set forth
in Section 4.02 (c) hereof) shall be calculated to
the next interest payment date on the bonds of the
Agency. The payment by such withdrawing city of that part of
the principal amount of debt it is required to pay
plus interest to the next interest payment date
shall extinguish all liability of such city hereunder.
The parties further agree that if such withdrawal
of a city is accomplished prior to or simultaneously
with the delivery of any bonds (other than those
described in Section 4.01) the total amount due
from the city shall be paid in 30 equal semiannual
installments (the first due within six months), on
dates established by the Agency and under such
circumstances, the total amount to be paid by the
city shall be equal to that part of the principal
amount of debt the city is required to pay plus
interest at the same effective rate as borne by
the Agency's bonds then being issued.
(3) The city withdrawing shall retain the rights
specified in Section 3.04.
(4) The negative covenants (as contained in Section
1.03 hereof) shall not thereafter apply to such
withdrawing city.
ARTICLE V
SECTION 5.01: Each proposed annual budget of the
Agency andea-c proposed amendment (unless the Board of
Directors of the Agency determines the adoption of the
amendment is an.emergency measure) shall be transmitted to
each city at least 10 days prior to the approval thereof by
the Board. A budget amendment adopted as an emergency measure
shall be immediately transmitted to the city. Any representative
of a city may appear before the Board of Directors of the
Agency to protest a particular budget item (its inclusion or
the amount thereof), and it shall be the duty of the Board
to consider such protest, and if the same is not granted
'(and the budget item revised in accordance with the protest)
the Board shall spread upon its minutes the reason therefor
and supply a copy of such minutes to each city. The initial
budget of the Agency, attached hereto, is hereby approved by
each city executing this contract, but (except as provided
in Section 5.06) it shall not hereafter be necessary for any
city to approve the annual budget or amendments thereto.
SECTION 5.02: The annual budget of the Agency shall
herea ter ave two majo° catagories, one of which shall be
for Maintenance and Operating expenses and the other shall
be for Debt Service.
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Maintenance and operating expenses shall cover all
expenses of the Agency except what is included in (i) the
budget for Debt Service, and (ii) the Capital Project Budget.
Expenses which, under standard accounting practices, should
be included as expenditures on a capital project shall not \
be included in the annual budget or amendment thereto as
maintenance and operating expenses unless the governing body
of each city approves a contrary treatment, provided however,
this provision shall be effective beginning with the budget
year 1976-1977.
The Debt Service portion of the annual budget shall
include all payments for the principal of and interest on
the bonds issued by the Agency as well as payments required
to be made for the payment and security of such bonds (including
fees of the paying agent bank). The Executive Director of
the Agency (as its Budget Officer) shall compute the amount
actually required to meet such Debt Service requirements for
the ensuing fiscal year and such amount shall be the amount
budgeted for such purposes without further action being
taken.
SECTION 5.03: In the event a budget for the ensuing
fisca year as not been adopted on or before the first day
of the fiscal year, the total amount budgeted for maintenance
and operating expenses for the preceding fiscal year shall
be the total amount of the temporary budget for such purposes
for the ensuing fiscal year. The temporary budget shall be
effective only until such time as a permanent budget has
been finally adopted and approved.
The Executive Director of the Agency shall be responsible
for the allocation for expenditure-of the total amount of
the temporary budget until a permanent budget is adopted and
approved.
SECTION 5.04: A Capital Project budget is a budget of
expen its' ures for -the providing of specific projects except
,that for the initial series of bonds all expenditures for
which provision is made in Section 3.01 shall constitute a
single capital project.
SECTION 5.05: The Agency covenants that it will operate
its fac-iT ies in an efficient and economical manner and
that it will follow prudent utility practices in the conduct
of its affairs.
SECTION 5.06: The parties hereto recognize that the
payment of the maintenance and operating expenses of the Agency
constitute a first charge against the revenues of the Agency;
that it is the Agency which has the responsibility of operating
and maintaining its facilities so as to provide adequate
service, but that the cities need a measure of protection so
as to protect its citizens and rate structure against rapid
and unforeseen changes in the budget.
Accordingly, the parties agree that:
(1) Except as provided in paragraph (3), no amendments
or amendments to the operating budget of the Agency shall be
adopted in any one fiscal year which increase the estimated
annual payments of a particular city by more than 20% without
,the approval of the governing body of each city whose payments
are so increased. In making such estimate, the Agency shall
;utilize the higher of (1) the net energy for load of a
particular city for the preceding 12 months or (2) the
estimated net energy for load for a particular city as
prepared by the director of utilities of the particular city
for the following 12 months [the estimate required in Section
4.02 (b) hereof], and the amount so determined shall be
multiplied by the millage rate then in effect (at the time
of the budget amendment) under Section 4.02 (b).
-19-
(2) Except as provided in paragraph (3), each subsequent
annual budget for maintenance and operating expenses may
'increase the total amount budgeted for such purposes by no
!more than 40% over the final approved budget of the prior
year without the prior.approval of the governing body of
'each city.
(3) If a weighted majority (as set forth in the Rules
and Regulations of the Agency) and six directors of the
Agency approve a budget or a budget amendment, the same
shall be effective.
For the purpose of this Section the annual operating
;budget for 1975-1976 shall be considered as being entirely
for maintenance and operating expenses.
ARTICLE VI
SECTION 6.01: The parties hereto recognize that the
'Agency was created for the purpose of providing electric
energy to public and private entities on a wholesale basis;
!that it is not the purpose of the Agency to usurp the powers
of the cities or to enter into competition with them, and
that such limitation was the intent of certain provisions of
!Section 4a (a) of the Act which provided for the creation of
the Agency.
The Agency covenants that during the term of this
agreement it will not engage in any utility business other
than the generation; transmission, and sale or exchange of
electric energy to the participating public entities (the
cities) and to private entities who are joint owners with
the Agency of an electric generating facility located within
'this State.
ARTICLE VII
SECTION 7.01: Subject to the third paragraph of this
'Section tle obligation of each City to promptly make all
prescribed payments shall commence on the date specified in
Section 4.02 and continue to be made on the dates therein
.specified.
It is contemplated this contract will be executed by
and between the Agency and each of the Cities of Bryan,
Denton, Garland and Greenville, and that a similar contract
will be exeucted between the Agency (or the Corporation, its
Agent) and the Brazos Electric Power Cooperative; that the
combined payments to the Agency by reason of such contracts
will be adequate to provide for the payment of (1) the
budgeted and anticipated administrative, maintenance and
operating expenses of the Agency, and (2) the debt of the
Agency during the time the same is outstanding.
At such time as (1) the Agency (or its Agent) has
executed contract of such import, and (2) copies therof
have been filed with each city, and (3) an official of the
Agency certifies that in his opinion such contractual obligation
meets the requirements of the preceding sentence, this
contract shall be fully operative and in force. When this
contract is fully operative and in force, the obligation of
each city to make the payments herein prescribed shall be
absolute, unconditional, and not subject to revocation or
diminution in any manner.
A city does not asaume by the execution hereof any
obligation to pay any amounts to the Agency or others other
than as herein provided. Specifically, a city does not
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guarantee the payments of any amounts due from other entities,
the sole purpose of the preceding paragraph being to give
assurance to each City that the other entities have joined
in the cooperative endeavor.
SECTION 7.02: Subject to the provisions of Section
8.14 oofTPriminary Participation Agreement, this contract
may be changed and modified only with the consent of the
governing bodies of the cities of Bryan, Denton, Greenville,
Garland and the Agency. Such modification may be requested
by any of such parties, in which event a joint meeting of
the governing bodies or of their duly authorized and appointed
representatives shall be held not less than fifteen (15)
days after the giving of such notice. At such joint meeting
the suggested changes or modifications shall be considered,
discussed and settled. No such change or modification may
be made which will affect adversely the payment when due of
all monies required to be paid by a City under the terms of
this contract and no such change will be effective which
affects adversely or causes a violation of any covenants
contained in the resolution or order authorizing the issuance
of the Agency's bonds.
If for any reason a City may desire additional studies,
services or the construction of any additional facilities
and same are within the legal and economic capabilities of
the Agency, provision therefor shall be made by means of a
supplement hereto, the terms of which are to be negotiated
between such City and the Agency. Nothing herein shall
restrict the power of the Agency to enter into additional
contracts with additional contracting parties provided the
revenues of this contract are not pledged or hypothecated in
any manner thereunder.
SECTION 7.03: This contract shall be subject to all
valid rules, regulations and laws applicable thereto, as
promulgated by the United States of America, the State of
Texas, or any other governmental body or agency having
lawful jurisdiction or any authorized representative or
agency of any of them.
SECTION 7.04: The City agrees that the Agency or its
Agent may w en permitted by existing easement) have such
easements over any easements, right-of-way or property held
by such City so that the facilities and required equipment
may be appropriately provided.
SECTION 7.05: (a) If for any reason of "force majeure"
any of tue parties hereto shall be rendered unable wholly or
in part to carry out its obligations under this agreement,
other than the obligation of the City to make the payments
required under the terms of Article IV hereof, then if such
party shall give notice and full particulars of such reasons
in writing to the other party within a reasonable time after
the occurrence of the event, or cause relied on, the obli-
gation of the party giving such notice, so far as it is
affected by such "force majeure", shall be suspended during
the continuance of the inability then claimed, but for no
longer period, and any such parties shall endeavor to remove
or overcome such inability with all reasonable dispatch.
The term "force majeure" as employed herein shall mean acts
of God, strikes, lock-outs, or other industrial disturbances,
acts of public enemy, orders or actions of any kind of the
Government of the United States or of the State of Texas or
any civil or military authority, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurricanes,
storms, floods, washouts, droughts, arrests, restraints of
government and people, civil disturbances, explosions,
-21-
breakage or accident to dams, machinery, pipelines, or
canals or other structures or machinery, on account of any
other cause not reasonably within the control of the party
claiming such inability. It is understood and agreed that
the settlement of strikes and lock-outs shall be entirely
within the discretion of the party having the difficulty,
and that the above requirement that any "force majeure"
shall be remedied with all reasonable dispatch shall not
require the settlement of strikes and lock-outs by acceding
to the demand of the opposing parties when such settlement
is unfavorable to it in the judgment of the party having the
difficulty.
(b) No damage shall be recoverable from Agency by
reason of the causes above mentioned.
SECTION 7.06: Any notice, request, demand, statement
or biII -proviTe3-for in this agreement shall be in writing
and shall be considered to have been duly delivered when
sent by registered or certified mail, addressed as follows:
Agency: Texas Municipal Power Agency
Forest Park Center
7111 Bosque Blvd.
Waco, Texas 76710
Attention: Executive Director
Cities: City of Bryan
P. 0. Box 1000
Bryan, Texas 77801
Attention: Mr. J. Louis Odle, City Manager
City of Denton
Civic Building
Denton, Texas 76201
Attention: Mr. Jim White, City Manager
City of Garland
P. 0. Box 189
Garland, Texas 75040
Attention: Mr. Charles Duckworth, City Manager
City of Greenville
P. 0. Box 1049
Greenville, Texas
Attention: Mr. Jim Deberry, City Manager
as the case may be, except that routine communications may
,be sent by ordinary mail and except that either party, by
the filing of an appropriate written notice to the others,
may specify some other individual to whom communications
thereafter are to be addressed.
SECTION 7.07: The Agency covenants that it will
enforcece tFe__o51 gations of each City hereunder (as well as
.any obligations contained in similar contracts with additional
contracting party) as may be required to accomplish the
;purpose of this contract. Either party may enforce any
;obligations hereunder owed by it by the other party.
i
SECTION 7.08: The Agency and each City agree that in
the event cue ault or threatened default in the payment of
principal of or interest on the debt of the Agency, any
,court of competent jurisdiction upon petition of the holders
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of 25% of the principal amount of the then outstanding bonds
of the Agency shall appoint a receiver with authority to
icollect and receive all resources pledged to the debt of the
Agency, enforce all rights arising from default, if any, by
any City, or additional contracting party, in making payment
under the agreement, employ and discharge agents and employees
of the Agency, take charge of the pledged funds on hand and
manage the proprietary affairs of the Agency without consent
or hindrance by the Agency. The court may further vest the
receiver with such powers and duties as the court may find
;necessary for the protection of the holders of the bonds.
SECTION 7.09: The parties hereto agree that if any of
,the prow isirov one this contract contravene or be held invalid
under the laws of this State, same shall not invalidate the
whole agreement but it shall be construed as though not
containing that particular provision and the rights and
obligations of the parties shall be construed and in force
,accordingly.
SECTION 7.10:- This contract shall terminate and be of
no ford el-ect ninety (90) days after the debt of the
Agency has been paid off, cancelled or refunded.
IN WITNESS WHEREOF, the parties hereto, acting under
authority of their respective governing bodies, have caused
this contract to be duly executed in several counterparts,
,each of which shall constitute an original, all as of the
'day and year first above written.
CITY OF BRYAN, TEXAS
TEXAS MUNICIPAL POWER AGENCY
By: By
Mayo, Ci o B an, Texas
By
mayor, it Den, Texas
ATTEST: 7
(C
ti\
ecretary;
exas
Seal)
P ei ent, Boar o Directors
(Agency Seal)
By:
Mayor, City o. Garland, Texas
ATTEST:
09
City o Denton pity e et Rif ¢ity o Garland-,
Texas
(City Seal)
r
~F r
r
-23-
CITY OF DENTON, TEXAS CITY OF GARLAND, TEXAS
i
CITY OF GREENVILLE, TEXAS
By: &ei
Mayor, City Gree ill,
Texas
s.,
4
v
rtY~Cl=erk
City of Green
v
~ ~
,Texas
~
i y
'
(
amity Sal)
OF TEXAS §
COUNTY OF BRAZOS §
BEFORE ME, the undersigned authority, in and for the said
County on this day personally appeared MR. LLOYD JOYCE, Mayor
tof the City of Bryan, Texas, known to me to be the person
whose name is subscribed to the foregoing instrument and known to
me to be the Mayor of the City of Bryan, Texas, and acknowledged
to me that he executed the same for the purposes and consideration
therein expressed and in the capacity therein stated as the act
r= wand deed of said CITY OF BRYAN, TEXAS.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of
1975.
11(Notary Seal) Notary Public, Brazos County, Texas
HE STATE OF TEXAS §
COUNTY OF DENTON §
BEFORE ME, the undersigned authority, in and for the
;said County on this day personally appeared MR. TOM JESTER,
Mayor of the City of Denton, Texas, known to me to be the
person whose name is subscribed to the foregoing instrument
and known to me to be the Mayor of the City of Denton, Texas,
and acknowledged to me that he executed the same for the
purposes and consideration therein expressed and in the
capacity therein stated as the act. and deed of said CITY OF
DENTON, TEXAS.
GIVEN UNDER MY HAND AND
day of S * Ja. , 1975.
(Notar Seal)
SEAL OF OFFICE this the / 7
Notary PubVi.c, Denton County, Texas
-24-
THE STATE OF TEXAS §
COUNTY OF DALLAS §
BEFORE ME, the undersigned authority, in and for the
said County on this day personally appeared MR. DON RAINES,
Mayor of the City of Garland, Texas, known to me to be the
person whose name is subscribed to the foregoing instrument
and known to me to be the Mayor of the City of Garland, Texas,
and acknowledged tome-that he executed the same for the
purposes and consideration therein expressed and in the
capacity therein stated as the act and deed of said CITY OF
GARLAND, TEXAS.
V GIVEN UND-EQ~RMY HAND AND SEAL OF OFFICE this the
day of SDR 1975.
(Notary Seal)
' THE STATE OF TEXAS
_ ~'~COUNTY" OF HUNT
r
c'
§
Notary Pu llc, D as County, Texas
BEFORE ME, the undersigned authority, in and for the
said County on this day personally appeared MR. CHARLES SIVLEY,
Mayor of the City of Greenville, Texas, known to me to be
the person whose name is subscribed to the foregoing instrument
and known to me to be the Mayor of the City of Greenville, Texas,
and acknowledged to me that he executed the same for the
purposes and consideration therein expressed and in the
capacity therein stated as the act and deed of said CITY OF
GREENVILLE, TEXAS.
oWa'
VVE MY HAND AND SEAL OF OFFICE this the L
_X 1 1975.
R
days o
_ `r(Nbta
.
JAN JORDAN
NOTARY PUBLIC, TRAVIS COUNTY
Notary Pu 1cc T V County, Texas
-25-
Seal) Notary Pu ic, Hunt C~ exas
THE STATE OF TEXAS §
COUNTY OF Jit-eL §
BEFORE ME, the undersigned authority, in and for the
said County on this day personally appeared ~+~L~ILQ/
Ycj'ILU- M President of the Boarder Directors o
the TEXAS KUNIC`lPAE POWER AGENCY, known to me to be the
person whose name is subscribed to the foregoing instrument
and known to me to be the President of the Board of Directors of
,TEXAS MUNICIPAL POWER AGENCY, and acknowledged to me that he
executed the same for the purposes and consideration therein
;expressed and in the capacity therein stated as the act and
deed of said TEXAS MUNICIPAL POWER AGENCY.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this the TO
day of Sapz,.e r r, 1975.
6 4'r-4cv
Draft H2
EXHIBIT "A" 9/16/75
TEXAS MUNICIPAL POWER AGENCY
Formulae To fie Used In Connection With
Debt Service Payment Adjustments -Brazos
Purchase Option
A. All funds received by Agency from Brazos shall be immediately used
to reduce (call) outstanding Bonds of Agency
B. Adjustments to Payment of Debt Service
1. Brazos Purchases Up To 4n Additional 17% of the Total Project
a. Debt service requirements are adjusted to eliminate
requirements of called Bonds.
b. New payments equal to a. times product of:
Brazos - 25.0>
Bryan - 19.39
Denton - 15.0'
Garland - 33.31
Greenville - 7.49
2. Brazos Purchases Over An Additional 17°% of the Total Project
a. Debt service requirements are adjusted to eliminate
requirements of called Bonds.
b. Brazos - New payments equal to a. times product of new
percentage calculated as follows:
x = % of Agency's debt requirements to be paid by
Brazos
y = % of total project owned by Brazos
z = Total % of participation desired by Brazos
in total project (both owned & contracted)
x = (z/1-y) - (y/1-y)
Example: Brazos purchases an additional 25% (owns 28% of
total project) of total project and wants total
participation to be equal to 40%
y = .28
z=.40
x = (.40/1-.28) - (.28/1-.28)
x = .5556 - .3889
x = .1667
C. Cities - Each City's new payments are equal to a. less b. times:
Bryan - 25.7
Denton - 20.0`"
Garland - 44.4;;
Greenville - 9.K
Tn/)PP
TABLE 1
TEXAS l1I1410PRL POWER AFENCY'
1975-1976 BUDGET
ESTIMATE OF REVENUES 3
FUNDING OCT. NOV. DEC. JAN.- FEB. K4R. APR. FIAT JUNE JULY AUG. SEPT. TOT&
Previously authorized S $ S f $ f f - S f 3 - f S f
by TMPP (1), 49,000 49.700 98,;
_._.Surcharge of .16 mill- -
per krh (2), 53,300 53,300 53,300 53,300 53,300 53,300 53,300 53,300 53,300 53,300 53,300 $3,300 639,1
Short term financing (3) 9,201,000 Moll
Total - j, 102,300$9,250,7003 53,300$53.300$ 53,300S 53,300$ 53,3005 53,300$ 53,300$ 53,3005 S3,300S .53,300$9,939,:
ESTIMATE OF - -
EXPENDITURES- ry
WA Administrative
general, directors fy~,tft ,
foes (4) S 4,500$ 4,500$ 4.500$ 4,500E 4,500$ 4;5005 4,500$ 4,500$ 4,500$ 4,500$ 4,500$ 4,5003 54,(
TPP operating 6 ` -
facilities expense 48,650 59,350 50,150 49,380 49,680 47,680 47,980. 45,980 48,450 45,950 46.250 46,250 585,1
TPP expenditures 49.000 49,700 98ri
previously authorized. -
by TMPP . ,
Subtotal' $ 102,150$ 113,5505 54,6505 53,8805 54,1805 52,180$ 52,4805 50.480S 52,9505 50,450$ 50,7505 501750$ 988,4
.Short Term financing 1,267,000 1,274,000 1,267,000 1,235,000 1,111,000 1,178,000 _ 584000 587,000 698,000 9,20,(
Total - $1,369,150$1,387,550$1,321,650$1,298,880$1,165,18011,230,1805 636,4805 636,4805 750,95OS 50,4501 50.750$ 50)50$9,939,4
- ALLOCATION TO'MEMBERS
Brazos
TPPI expense autharized
by TMPP f
TPPI Operation 6 Fac.
TMPA Operation
Short Term Financing
Total $
Bryan
TPPI Ex 1
151000E 151900$ $ $ $ $ S $ S S S S 30,5
20.000 20,100 20,000 20,100 20,100 20,000 20,100 20, 100 20.000 20,100 20,100 20,000 2408
-0- 'p_ -0- -0- _0- -p' .g_ .p. .p. .8. p_ . .0-0-
-0- -0- -0- __O_ G _0 _
_
35,100 -0
36,000$ 20.000S 20,1005 20,100$ 20,000$ 20,100$ 20,1005 20,0005 20,100$ 20,700$ 20,000$ 271,71
pense out or zed
by IMPA. $ 8,500$ 8,600 $ $ - $ S S $ S f S $ S 17,](
TPPI Operation 6 Fac. 7,400 7,400 7,400 7,400 7,400 7,400 7,400 7,400 7,400 7,400 7,400 7,400 88,8(
.:,TMPA Operation 1.020 1,020 1,020 1,020 1,020 1,020 1,020 1,020 1,020 1,020 1,020 1,020 12,24
Short Term Financing - -0- _0_ _p_ _0_ _p_
a -
Total S 16,920$ •17,020 S 8,420E 8,420$. 8.420S 8,420$ 8,420$ 8,4205 8,420E 8,4205 8,4205. 8,4205 118,14
Denton
-TPPIExpense authorised
•by-TMPA S. 6,8005 6,800 $ S $ S S S $ $ $ $ S )3,6C
TPPI Operation 6 Fac. 5,350 5,340 5,350 5,340 5,350 6,340 5,350 5,340 5,350 5,340 5,350 5,340 64,14
TMPA Operation' 970 - 970 970 970 970 970 970 910 970 970 970 - 970 ll ,G4
'Short Term Financing -0- -0- -0- -0- -0- -0- -0- 0-_ -0-_ -0- 50- -0- -0-
•_:.i Total: $ 13,120$ 13,110 $ 6,320$ 6,310$ 6,32D$ 6,330$ 6,320$ 6,310$ 6,320$ 6,3105 6.3205 6,330$- 89,38
Garland -
• '.---TPPI Expense authorized -
by TMPA $ 15,300$ 15,200 $ $ $ $ $ $ $ $ $ S $ 3050
TPPI Operation 6 Fac. 13,830 13,630 13,840 13,830 13,930 13,440 - 13,830 13,030 13,040 13,830 13,830 13,840 166,00
iMPA Operation 2,050 2,050 . 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 24,GD
Short term Financing -0- -0- -0- -0- -0- =3- -0- -0- -0- 4- -0- _ _
Total S 31,180$ 31,080 $ 15,890$ 15,880$ 15,8805 15,8905 15,880$ 15,880$ 15,890$ 15,680$ 15,880$ 15.890$ 221,101
Greenville
TPPI Expense authorized
by T14PA S .3,300E 3,300 S 3 $ $ $ $ $ $ S S S G,GO(
TPPI Operation A Fac. 2,170 2,170 2,170 2,160 2,170 2,170 2,170 2,160 2.170 2,170 2.170 2,160 26,01(
TMPA Operation - 460 460 460 460 460 460 460 460 460 460 460 460 5,52(
Short Term Financing -0- =0_ -0- -0- __O_ 0_ -0- _0_ 0- -0- -0= 4- -p_
1
Total $ 5,930E 5,930 $ 2,6305 2,620$ 2,630$ 2,6305 2,6305 - 2,620$ 2,630$ 2,630$ 1,630$ 2,620$ 38,13(
1
TEXAS MUNICIPAL POWER AGENCY
Estimated Financing RequiremMs For
First Yiar's Activities a
Total Allocation
Facility/Activity Estimated TMPA Brazos
Cost (97.0%) (3.0%)
1. Fuel Development
a.. Bryan Lignite $ 5,571,500 $ 5,404,355 $167,145
b. Other Lignite 150,000 145,500 4,500
c. Western Coal 25,000 24,250 750
Subtotal 5,746,500 5,574,105 172,395
2. Engineering Studies
a. Gas Turbines $ 50,000 $ 48,500 $ 1,500
b. Economic Dispatch 107,000 103,790 3,210
c. Comanche Peak 50,000 48,500 1,500
d. Pumped Stgqr@@ge 125,000 121,250 3,750
e. Microwavetbl._ -550,000 533,500 _16,500_
f. Transmission 40,000 38,800 1,200
g. TIS 5,000 4,850 150
h. Fuel Management 10,000 9,700 300
i. Cost of Service 4,000 3,880 120
Subtotal 941,000 $ 912,770 28,230
3. Construction
a. Interconnect with Private
w ,..w
Utilities $ 1s0°4sv nO0 W d' o- 32 F'^
b. Olinger-"Greenville line 1,000,000 970,000 30,000
c. Oil Storage Facility Acq. 430,000 417,100 12,900
Subtotal 2,514,000 2,438,580 75,420
Total facility/Activity fst.Costs $ 9,201,500 $ 8,925,455 $276,045
4. Cost of Financing
a. Legal & Fiscal (1%) $ 106,250 $ 106,250 $ -0-
b. Capitalized Interest(c) 743,750 743,750 -0-
c. Capitalized Reserve Fd.(d) 849,545 849,545 -0-
Subtotal 1,699,545 1,699,545 " - 0-
Grand Total $10,901,045 110,625,000 $276,045
(a) Based on revised contract prices
b Includes construction of facilities
~c~ 12 months interest at 7%
(d) Equal to z of one average annual requirement (approximate)
9/10/75
AHE
TABLE
2
EXPENDITURES PREVIOUSLY
AUTHORIZED BY
TMPP
TO
BE SPENT IN NEXT
TWO MONTHS (6)
DATE
EXPENDITURE
AUTHORIZED
ALLOCATED TO
AMOUNT
Transmission Studies
September 8
All
$ 7,500
Microwave Tower Site Options
September 8
All
1,000
Power Cost Allocation Study
August 28
All
20,000
Lone Star Negotiations
July 31
Cities
19,000
Pitts Gas Testing
July 31
All
3,000
Economic Dispatch Phase I
All
13,200
Village Bend Phase IA
July 31
All
25,000
Bryan Lignite (Reserve fund)
September 8
All
10,000,
TIS Research
June 26
All
2,000
$98,700
ALLOCATION TO
MEMBERS (7)
MEMBER
ALLOCATION
'Brazos
$30,900
Bryan
17,100
.Denton
13,600
Garland
30,500
Greenville
6,600
$98,700
TABLE 3
POOL ADMINISTRATION, PROFESSIONAL. OPERATING
TPPT
t
AND FACILITIES
BUDGET (8)
OCTOBER
1975--SEPTEMDER 1976
POOL ADMINISTRATION
OCT.
NOV.
DEC.
JAN.
FEB.
- MAR_
APR.
MAY
JUNE
JULY
AUG. SEPT.
TOTAL _
.
Salaries(9)
$ 7,650 $
12,250
$ 12,250
$ 13,450
$ 13,480
S 13,480 $
13,480 $
13,480 $
14,150 S
14,150 $
14,150 $
14,150
$
156,150
General Office ,(10)
6,900
. 3,000
3,100
3,100
3,200
3,200
3,300
3,100
3,400
3,400
3,500
3,500
42,900
Tavel and meetings
2,000
2,000
2,100
2,100
2.200
2,200
2,300
2,300
2,400
2,400
2,500
2,500
22,000
Printing, training, publica-
tions
500
500
600
600
700
700
_800
800
900
900
1,000
1.000
9.000
Subtotal
S 17,050 $
17,750
$ 18,050
f 19,280
3 19,580
$ 19,580 3
19,880 S
19,860 $
20,850 S
20,850 S
21,150 S
21,150
S
235,050
PROFESSIONAL EXPENSES AND
.
-
STUDIES
Legal fees (11),
S 10,000 $
10,000
$ 10,000
S 8,000
f 8,000
S 6,000 S
6,000 S
4,003 S
4.00 S
4,000 $
4.000 $
4,000
S'
78,000
Gas consultant (12)
500
500
500
500
500
500
500
500
500
Soo
5,000
- TIS participation
500
500
500
500
500
500
500
509
500
500
50
500
6,000
Audit and annual report
10,000
10,000
Railroad Commission Hearings
(13)
.200 .
200
200
200
200
200
200
200
200
200
200
200
2,400
Pool Seminar
2,500
2,500
Finance Team Expenses
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
8,000
Load and generation studies-
200
200
200
200
200
200 -
200
200
200
200
200
200
2.40L
ERCOT studies
100
100
100
100
100
100
100
100
100
100
100
100
1,200
Brochul-e and Education
500
500
500
500
500
500
500
500
500
500
500
500
6,000
Negotiations 8 consultants
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
60,000
Miscellaneous Studies
2,000
2,000
2,000
2,000
2.000
2,000
2,000
2,000
2,000
2.000
2,000
2,000
24,000
_ Subtotal
$ 19,500 $
29,500
$ 20.000
S 18,000
$ 18,000
$ 16,000 $
16,000 E
14,000 $
15,50 S
13,000 S
13,000 f
13,000
S
205,500
POOL OPERATING EXPENSE
Pool and Pitts Dispatching
f 1,60 $
1,600
$ 1.600
$ 1,600
S 1,600
S 1,600 $
1,600 S
1.600 S
1,600 $
1.600 $
1,600 S
1,600
$
19.200
FACILITIES EXPENSE
Brazos Owned
f 9.00 $
91000
$ 9,000
$ 9,000
$ 9.000
$ 9,000 S
9,000 S
9.000 $
9.00 $
9,000 S
9,000 S
9.000
$
108,000
011 Terminal operation
1,500
1,500
1,500
11500
1,500
1,500
_1500
1,500
1,500
1,500
1,500
1.500
38,000
Subtotal
E 10,500 S
10,500
$ 10,500
$ 10.500
$ 10,500
$ 10,500 $
10,500 S
10,500 $
10,500 $
10,500 S
10,500 $
30,500
S
126,000
Total
$ 48,650 $
59,350
S 50.150
$ 19,380
$ 49,680
$ 47,680 $
47,980 S
47,980 $
48.450 $
45,950 $
46,250 S
46,250
f
585,750
ALLOCATION TO MEMBERS 14)
.
Brazos
$ 20,100 $
20,100
$ 20,000
$ 20,100
$ 20,100
3 20,000 $
20,100 $
20,100 S
20,000 S
20,100 $
20,100 S
20,000
f
240,600
Bryan
7,400
7,400
7,400
7,400
7,400
7,400 '
7,400
7,400
7,400
7.40
1,400
7,400
88,800
Denton
5,350
5,340
5,350
5,340
5,350
5,340
5,350
5,340
5,350
5,340
5,350
5;340
64,140
- Garland
13,830
13,830
13,840
13,830
13,830
13,840
13,830
13,830
13,840
13,830
13,830
13,840
166,000
Greenville
2,170
2,170
2,170
2,160
2,170
2,170
2,160
2,170
2,170
2,170
2,170
2,160
26,010
.
S
585.750
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FOOTNOTES
(1) Recent authorizations shown in Table 2.
(2) As contained in Cities-TMPA agreement.
(3) As shown in financing documents and Table 5.
'(4) Allowance for miscellaneous expense of TMPA not contracted to TPPI.
,(5) Short term financing is to be rolled into first long term financing.
'(6) Amounts shown in Pool minutes. Some costs not shown are included in
short term financing.
'(7) Allocated on 1974 peak loads.
(8) Expenses not included in short-term financing.
,(9) Assumes staff of 7 with cost of living increase in January and merit
increase in June.
(10) Assumes moving expenses for two plus addition of office furniture,
.,calculators, etc.
(15) Assumes decline in deliverability. Price based on $1.524/mmbtu +
$.20 transportation through August, then $1.90 + $.30 transportation.
(16) Gas received but not paid for in 1974 and 1975.
(17). Based on 1974 peak loads.
(18) As shown in short-term financing documents.
(19) TMPA assumes previous costs of members in October.
(13) Possible future hearings.
(14) Allocated on 1975 energy.
(11) Assumes decline in legal needs as organizational relationships are
firmed up.
(12) Continuing services after Lone Star negotiations.
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