2010-164
ORDINANCE NO. 2010- 164
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS
PROVIDING FOR, AUTHORIZING, AND APPROVING THE EXECUTION BY THE CITY
MANAGER OF A"FIRST AMENDMENT TO POWER PURCHASE AGREEMENT FOR
FIRM ENERGY AND ASSOCIATED RENEWABLE ENERGY CREDITS BETWEEN THE
CITY OF DENTON, TEXAS AND NEXTERA ENERGY POWER MARKETING, LLC., A
DELAWARE LIMITED LIABILITY CORPORATION"; AUTHORIZING AND APPROVING
THE EXECUTION OF SUCH OTHER ANCILLARY AND RELATED DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, CERTIFICATES, ASSIGNMENTS, LICENSES,
DIRECTIONS, 1NSTRUMÊNTS, AND STATEMENTS BY THE CITY MANAGER OR HIS
DESIGNEE, WHICH ARE INCIDENT OR RELATED THERETO, AND AS SHALL BE
REASONABLY DETERMINED BY THE CITY ATTORNEY; CONFIRMING AND
RATIFYING THAT THE CITY OF DENTON, TEXAS, ITS MAYOR, ITS CITY COUNCIL
MEMBERS, ITS CITY MANAGER, AND ITS CITY ATTORNEY SHALL BE
AUTHORIZED AND EMPOWERED TO PERFORM SUCH ACTS AND OBLIGATÎONS AS
ARE REASONABLY REQUIRED TO CONSUMMATE THIS TRANSACTION; RATIFYING
AND CONFIRMING ALL PRIOR ACTIONS TAKEN BY THE CITY COUNCIL IN
FURTHERANCE OF THE FOREGOING TRANSACTIONS; AND DETERMINING THAT
SAID AGREEMENTS PERTAIN TO A"COMPETITIVE ELECTRIC MATTER" AS SET
FORTH UNDER THE PROVISIONS OF §§551.086 AND 552.133 OF THE TEXAS
GOVERNMENT CODE, AS AMENDED; FINDING AND DETERMINING THAT THE
APPROVAL OF THIS TRANSACTION IN A CLOSED MEETING OF THE CITY COUNCIL
IS FURTHER AUTHORIZED UNDER THE PROVISIONS OF CITY OF DENTON.
RESOLUTION NO. R2000-15; FINDING AND DETERMINING THAT TEXAS
GOVERNMENT CODE §252.022(a)(15) APPLIES TO THE PURCHASE OF ELECTRICITY
MAKING IT EXEMPT FROM THE TEXAS BIDDING STATUTES; ADOPTING
SIGNIFICANT RECITATIONS, FINDINGS AND CONCLUSIONS, AS ARE SET FORTH IN
THE PREAMBLE OF THIS ORDINANCE; FINDING THAT MATTER OF THE FIRST
AMENDMENT TO POWER PURCHASE AGREEMENT WAS POSTED AS REQUIRED BY
LAW AND WAS DULY CONSIDERED IN A CLOSED MEETING OF THE CITY COUNCIL
ON THE 15TH DAY OF JUNE, 2010, BY A QUORUM OF THE DENTON CITY COUNCIL
AND WAS DULY APPROVED BY A VOTE TAKEN IN SAID CLOSED MEETING; THAT
THE PURCHASE OF ENERGY AND RENEWABLE ENERGY CREDITS, AND OTHER
RELATED ARRANGEMENTS MADE BY THE CITY UNDER THE TERMS OF THIS
FIRST AMENDMENT TO POWER PURCHASE AGREEMENT ARE IN THE PUBLIC
- WELFARE, PROVIDE THE CITY WITH POWER SUPPLY AND ARE IN THE BEST
INTERESTS OF THE RATEPAYERS OF DENTON MUNICIPAL ELECTRIC;
AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City of Denton, Texas ("Denton") is a Home-Rule City and a Texas
municipal corporation governed by the constitution and laws of the State of Texas; and
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WHEREAS, in accordance with the provisions of §551.086 of the Texas Government
Code, after due notice of the public meeting was provided as required by law, this Power
Purchase Agreement transaction ("Transaction") was submitted for consideration to the Denton
Public Utilities Board on the 14th day of June, 2010; the quorum of the said Public Utilities
Board is constituted by four members present; and a unanimous vote of the Public Utilities
Board ("PUB"), a"Public Power Governing Body" as defined by State law, convened a Clōsed
Meeting as permitted by law, and concluded that this Transaction was a Public Power
Competitive Matter, and having discussed, considered, and deliberated the Transaction; and the
Board recommend to the City Council that the Transaction by and between Denton and NextEra
Energy Power Marketing, LLC., a Delaware limited liability corporation (hereafter "NextEra"),
be recommended for approval by a vote of four (4) in favor to zero (0) opposed; being
unanimously approved by a vote of the four PUB members present; and
WHEREAS, in accordance with the provisions of §551.086 of the Texas Government
Code, after due public notice being given, the City Council, a"Public Power Utility Governing
Body" under Senate Bill 7, has discussed, deliberated, considered the Transaction, -the subject of
this ordinance, in a Closed Meeting of the City Council on the 15t" day of June, 2010, with a
quorum of the City Council being present at that time, after determining by a preliminary
majority vote of its members, that the consideration of the item which is the subject of this
ordinance, is related to competitive electric and financial matters, including business and
commercial information, which if disclosed, would give advantage to its competitors or
prospective competitors; and
WHEREAS, thereafter, after due public notice being given, the City Council, proceeded
to consider the matter of the Transaction which is the subject of this ordinance, in its Closed
Meeting on the 15th day of June, 2010, and following the presentation of Staff, the discussion
deliberation regarding the Transaction; and the City Council proceeded to take final action, and
voted, by a majority of its members present in its Closed Meeting, as permitted by State law; 7
for and 0 against, to approve the Transaction; being a majority of its members present and
voting, in favor of the Transaction described in said ordinance, as set forth below; and
WHEREAS, the City Council has further determined and finds that several of those
documents to be entered into by and between Denton and NextEra; and other affiliates of this
entity, namely the First Amendment to Power Purchase Agreement For Firm Energy and
Associated Renewable Energy Credits Between the City of Denton, Texas and NextEra Energy
Power Marketing, LLC (the "First Amended Agreement") and all other documents incident to or
related thereto as from time to time may be executed by the City of Denton, Texas and/or
NextEra, in connection theŕewith; should be excepted from public disclosure, as permitted by the
provisions of §552.133 of the Texas Government Code, as documents that are reasonably related
to a competitive public power matter, the disclosure of which documents would provide an
advantage to the competitors or prospective competitors of Denton Municipal Electric ("DME");
and said First Amended Agreement is protected from public disclosure under the terms and
provisions of the City of Denton "Competitive Matters Resolution" found in Resolution No.
R2000-15; and
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WHEREAS, the City Council has further determined that it is in the public interest that it
should exercise its right under the Texas Government Code to lawfully safeguard and keep
certain of these documents sealed, as they are competitive documents which contain competitive
electric and related financial information; and
WHEREAS, the City Council finds that there is no divestiture, sale or other disposition of
the property of any utility of the Denton, and therefore, that no public election is required
pursuant to the Charter of the City of Denton, Texas ("Charter"); and
WHEREAS, the City Council finds that said Transaction involves Denton purchasing
from NextEra a portion of its necessary replacement power and energy requirements tōgether
with renewable energy credits, for a contractual term of years, as more fully provided by this
ordinance; and that such Transaction involves Denton's acquisition of reliable, cost-effective
replacement power and energy from NextEra; with no detriment to the ratepayers of DME and
with enviŕonmental advantages to the citizens and ratepayers of Denton; and
WHEREAS, the City Council finds and affirms that the transaction as provided by this
ordinance, will not impair the ability of Denton to comply with the provisions of any of its utility
revenue bonds, as amended, which are now issued and outstanding; and
WHEREAS, the City Council finds that §252.022(a)(15) of the Texas Government Code
is applicable to this Transaction and that competitive' bidding law is not applicable to the
purchase by the City of electricity; and
WHEREAS, Denton has considered a number of alternative providers and finds and
concludes that NextEra, should be selected by Denton to continue to provide a portion of
Denton's power and energy needs together with renewable energy credits for the ensuing term of
years; and
WHEREAS, Denton desires to enter into such other arrangements in support of the
Agreement with NextEra (or its affiliates) which are incident and related to the First Amendment
to Power Purchase Agreement, and to take such additional actions as the City Manager or his
designee, shall determine to be necessary and advisable to effectuate the matters set forth herein
and for less than the price levels approved and designated by the City Council on June 15, 2010;
NOW THERFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The recitations and recitals set forth above are true and correct and
are made a part of this ordinance.
SECTION 2. The City Council, hereby approves and authorizes the City
Manager and City Secretary, to execute and attest respectively, the First Amendment to Power
Purchase Agreement, by and between the City of Denton, Texas and NextEra, a Delaware
limited liability corporation, under the terms and conditions being contained in substantially the
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form which is attached hereto as Exhibit A and made a part hereof, with such amendments,
changes and additions as the City Manager may approve, and the execution and delivery thereof
on behalf of the City of Denton by or at the direction of the City Manager shall constitute such
approval.
SECTION 3. The City Council, hereby approves and authorizes the City
Manager and City Secretary to execute and attest respectively, all other documents which are
incident and related to the Agreement referenced herein and to take such additional actions as the
City Manager shall determine to be necessary and advisable to effectuate the matters set forth
above.
SECTION 4. The City of Denton, the Mayor, the City Manager, the City
Attorney or their designees be, and each of them individually hereby is, authorized and
empowered to perform all such acts and obligations as required with respect to the Agreements
and documents described herein.
SECTION 5. The Mayor, the City Manager, the City Attorney or their designees
be, and each of them individually hereby is, authorized, empowered and directed to negotiate,
deliver and perform all such acts and things and to sign any or all such documents, certificates,
contracts, assignments, licenses, leases, agreements, directions, instruments and statements, each
tōgether with such amendments, changes and additions thereto as the Mayor, the City Manager,
the City Attorney or their designees shall determine to be necessary or advisable to effectuate the
matter set forth herein, any such determination to be conclusively evidenced by the taking or
causing to be taken of such action or the execution and delivery of any such document,
certificate, agreement, license, lease, direction, instrument or statement by the Mayor, the City
Manager, the City Attorney or their designees.
SECTION 6. All prior actions taken by the Mayor, the City Manager, the City
.Attorney or their designees in furtherance of the foregoing matters be and hereby are ratified,
approved and authorized in all respects as of the dates and times such actions were taken.
SECTION 7. Immediately following the execution and delivery of the
documents described as the,First Amendment to Power Purchase Agreement and such other
supporting docurrients incident to such Agreement, as provided for in this ordinance, the City
Secretary is hereby directed to seal and maintain said documents in her custody and control, as
documents excepted from public disclosure under the provisions of §552.133 of the Texas
Government Code (the "Public Power Exception"); unless otherwise lawfully ordered to disclose
said documents. The City Secretary shall keep this ordinance as a public record.
SECTION 8 The expenditure of funds as provided for in this ordinance is
hereby authorized.
SECTION 9. This ordinance shall become effective immediately upon its
passage and approval.
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PASSED AND APPROVED on this the 15th day of June, 2010.
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MARK'A. BUŔŔOUG -S, MAYOR
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ATTEST:
JENNIFER WALTERS, CITY SECRETARY
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By: -
APPR VED A' 7f0 LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
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By: _
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