2011-087ORDINANCE NO. 2011-087
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 FULL REQUIREMENTS WHOLESALE ELECTRIC POWER SERVICE
AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND NRG POWER
MARKETING LLC., A DELAWARE LIMITED LIABILITY COMPANY; APPROVING AND
AUTHORIZING THE ACCEPTANCE AND APPROVAL BY THE CITY MANAGER AND
CITY ATTORNEY OF A GUARANTY AGREEMENT ISSUED BY NRG ENERGY, INC., A
DELAWARE CORPORATION FOR THE BENEFIT OF THE CITY; AUTHORIZING THE
ACCEPTANCE AND APPROVAL OF A LETTER OF CREDIT EXECUTED BY CITIBANK,
N.A. FOR THE BENEFIT OF THE CITY; APPROVING THE EXECUTION OF SUCH
OTHER AND FURTHER RELATED DOCUMENTS, INCLUDING, WITHOUT
LIMITATION, CERTIFICATES, ASSIGNMENTS, LICENSES, DIRECTIONS,
INSTRUMENTS, INSTRUCTIONS, CONFIRMATIONS AND STATEMENTS BY THE
CITY MANAGER OR HIS DESIGNEE, WHICH ARE INCIDENT OR RELATED THERETO,
AS SHALL BE REASONABLY DETERMINED BY THE CITY ATTORNEY OR HER
DESIGNEE; CONFIRMING AND RATIFYING THAT THE CITY OF DENTON, TEXAS,
ITS MAYOR, ITS CITY COUNCIL MEMBERS, ITS CITY MANAGER, AND ITS CITY
ATTORNEY OR HER DESIGNEE SHALL BE AUTHORIZED AND EMPOWERED TO
PERFORM SUCH ACTS AND OBLIGATIONS AS ARE REASONABLY REQUIRED TO
CONSUMMATE THIS TRANSACTION; RATIFYING ALL PRIOR ACTIONS TAKEN BY
THE CITY COUNCIL IN FURTHERANCE OF THE FOREGOING TRANSACTION; AND
DETERMINING THAT SEVERAL OF SAID DOCUMENTS 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 TEXAS GOVERNMENT CODE §252.022(a)(15)
APPLIES TO SAID AGREEMENT; ADOPTING SIGNIFICANT RECITATIONS, FINDINGS
AND CONCLUSIONS, AS ARE SET FORTH IN THE PREAMBLE OF THIS ORDINANCE;
THAT THE PURCHASE OF CAPACITY AND ENERGY, AND OTHER RELATED
ARRANGEMENTS MADE BY THE CITY UNDER THE TERMS OF THIS FULL
REQUIREMENTS WHOLESALE ELECTRIC POWER SERVICE AGREEMENT ARE IN
THE PUBLIC WELFARE; 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
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 "Full
Requirements Wholesale Electric Power Service Agreement between the City of Denton, Texas
and NRG Power Marketing LLC" transaction (hereafter the "Transaction") was submitted for
consideration to the Denton Public Utilities Board on the 9t" day of May, 2011; a majority of the
Public Utilities Board ("PUB"), a "Public Power Governing Body" as defined by State law,
convened a Closed Meeting as permitted by law, and discussed, considered, and deliberated the
Transaction recommending, by a vote of seven (7) in favor to none (0) opposed, to the City
Council that the Transaction by and between Denton and NRG Power Marketing LLC, a
Delaware limited liability company, be approved; a majority vote of the 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 17th day of May, 2011, after
determining by a majority vote of its members, that the consideration of the Transaction which is
the subject of this ordinance, is related to competitive electric 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 then
proceeded to consider the matter of the Transaction, which is the subject of this ordinance, in its
Open Meeting on the 17th day of May, 2011, and the City Council proceeded to take final action,
and voted, by a majority of its members present, I for and Q against, the City of
Denton, Texas, approving the Transaction; being approved by 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 documents to be
entered into by and between Denton and NRG Power Marketing LLC, a Delaware limited
liability company ("NRG"); and other affiliates of this entity, namely the "Full Requirements
Wholesale Electric Power Service Agreement between the City of Denton, Texas and NRG
Power Marketing LLC" (hereafter the "Agreement"), and all other documents related thereto as
from time to time may be executed by the City of Denton, Texas and/or NRG, in connection
therewith; 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
electric matter, the disclosure of which documents would provide an advantage to the
competitors or prospective competitors of Denton Municipal Electric ("DME"); and
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 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 NRG, a portion of its necessary replacement power and energy requirements for a
contractual term of three years and three months beginning on July 1, 2011, as provided by this
ordinance; and that such Transaction involves Denton's acquisition of reliable, cost-effective
replacement power and energy from NRG; with no detriment to the ratepayers of DME; and
WHEREAS, the City Council finds 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 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 the competitive bidding law is not applicable to the
purchase by the City of electricity; and
WHEREAS, Denton and NRG have also entered into this Transaction for NRG's
services, among other things, that provides for services related to the purchase of a portion of
Denton's energy capacity and energy management needs; and
WHEREAS, the Council has considered all proposals provided by other power providers
in Denton's Request For Proposals and finds and concludes that NRG, should be selected by
Denton to provide a portion of Denton's power and energy needs for the ensuing three years and
three months; and
WHEREAS, Denton desires to enter into such other arrangements in support of the
Agreement with NRG which are incident and related to the 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; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. All findings in the Preamble of this Ordinance are incorporated herein.
SECTION 2. The City Council, hereby approves and authorizes the City Manager and
City Secretary, to execute and attest respectively, the Agreement, by and between the City of
Denton, Texas and NRG Power Marketing LLC., a Delaware limited liability company, under
the terms and conditions set forth in Exhibit A, attendant with Schedules A through D, and made
a part hereof, with such ancillary changes and additions in substantial compliance with said
Agreement as the City Manager may approve, and to consummate the execution and delivery
thereof on behalf of the City of Denton by or at the direction of the City Manager.
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 all such documents, certificates, contracts,
assignments, licenses, leases, agreements, directions, instruments and statements, each together
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. The City Secretary is hereby directed to seal and maintain the Agreement,
with attendant Schedules A through D, 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.
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.
PASSED AND APPROVED this the day of , 2011.
MARK A. BURRO(JGOS, WAYOR'
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY: L
a