22-2164ORDINANCE NO. 22-2164
AN ORDINANCE OF THE CITY OF DENTON, A HOME-RULE MUNICIPALCORPORATION, AUTHORiZING THE CITY MANAGER TO EXECUTE AN ELE(_'TION
OPTION FOR REPAYMENT OF $7,923,140.36 OWED BY ERCOT TO DENTONMUNICIPAL ELECTRIC ASSOCIATED WITH THE BANKRUPTCY OF BRAZOS
ELECTRIC COOPERATIVE, INC. AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Denton, dba Denton Municipal Electric, is owed $7,923,140.36 byERCOT for energy sold to ERCOT during winter storm Uri; and
WHEREAS, the amounts owed to Denton Municipal Electric are a direct result of the short
payment to ERCOT by Brazos Electric Cooperative Inc. for energy and ancillary services purchased
during winter storm Uri; and
WHEREAS, Brazos Electric Cooperative Inc. (Brazos) declared filed for Chapter 11
bankruptcy on March 1, 2021 and filed a claim for $1,886,595,737.08 and on September 13, 2022 the
bankruptcy court entered an order that conditionally approved the Brazos reorganization plan which
includes provisions for the repayment of ERCOT market participants including Denton Municipal
Electric; and
WHEREAS, Denton Municipal Electric must select the method of repayment consistent with
the options available to it pursuant to the approved bankruptcy reorganization plan and the ERCOT
prescribed repayment election option; and
WHEREAS, participation in the ERCOT marketplace requires and limits the ability of Denton
Municipal Electric to recover short payments due to uplift provisions and jurisdictional restrictions
placed upon it as a market participant; and
WHEREAS, the selection of the repayment option serves a predominantly public purpose of
Denton Municipal Electric to ensure reliability and efficient utility service and protection of its assets
and equipment;
WHEREAS, Denton Municipal Electric and the City of Denton will remain in full control of
each payment received to ensure that it serves its public purpose and that it is in the best public interest
of said purpose and the selected option receives the best benefit in return for Denton Municipal
Electric and the City of Denton; and
WHEREAS, it is a best practice and organizationally efficient for the Agreements to be
executed administratively by the City Manager, or her designee, after approval of the same by the
City Attorney; and
WHEREAS, the City Manager, or her designee, will maintain documentation, in either written
or electronic form, for executed Agreements; and
WHEREAS, the City Council finds it in the public interest for the City Manager, or her
designee, to administratively execute non-disclosure and confidentiality agreements for economic
development or electric or solid waste utility operations after approval of the same by the CityAttorney, or his designee; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS :
SECTION 1. The findings and recitations contained in the preamble of this Ordinance are
incorporated herein by reference.
SECTION 2. The City Manager, or her designee, is authorized to execute an election option
for repayment of $7,923,140.36 owed by ERCOT to Denton Municipal Electric associated with
the bankruptcy of Brazos Electric Cooperative, Inc. without further authority, guidance, or direction
from the City Council, and is further authorized to carry out the rights, duties, obligations and
responsibilities of the City pursuant to such election.
SECTION 3. The City Manager, or her designee, shall maintain documentation, in either
written or electronic form, for all agreements executed pursuant to this ordinance.
SECTION 4. All ordinances or parts of ordinances in force when the provisions of this
ordinance became effective which are inconsistent, or in conflict with the terms or provisions
contained in this ordinance are hereby repealed to the extent of any such conflict.
SECTION 5. If any section, subsection, paragraph, sentence, clause, phrase or word in this
ordinance, or application thereof to any person or circumstances is held invalid by any court of
competent jurisdiction, such holding shall not affect the validity of the remaining portions of this
ordinance, and the City Council of the City of Denton, Texas, hereby declares it would have enacted
such remaining portions despite any such invalidity.
SECTION 6. This Ordinance shall become effective immediately upon its passage and
approval.
,nd,..:l£JIT' “ ’Pw:ngoa IK;”'"’d' W ,,h.Elj==„ypif.d ,„d
approved by the following vote K - n :
Aye
b/
,/
y‘
Nay Abstain Absent
Mayor: Gerard Hudspeth
Vicki Byrd, District 1 :
Brian Beck. District 2:
Jesse Davis, District 3 :b/
Alison Maguire, District 4:t/
Brandon Chase McGee, At Large Place 5 : /
Chris Watts, At Large Place 6: /
ODbbePASSED AND APPROVED this the lg+k d,y of , 2022.
Gerard Hudspeth, MAYORPAGE 2
ATTEST: be PUT?+ROSPFMOS. CITY SECRETARY 81111111111
APPROVED AS TO LEGAL FORM:MACK REINWAND, CITY ATTORNEY
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