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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 r; 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 2 r • ~ ~ 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 3 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. 4 , .J t PASSED AND APPROVED on this the 15th day of June, 2010. ' v MARK'A. BUŔŔOUG -S, MAYOR ~ ATTEST: JENNIFER WALTERS, CITY SECRETARY . By: - APPR VED A' 7f0 LEGAL FORM: ANITA BURGESS, CITY ATTORNEY ~ ~ By: _ . ~