Loading...
2008-202ORDINANCE NO.2008- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, EXECUTED BY THE MAYOR AUTHORIZING THE CITY MANAGER TO EXECUTE AND DELIVER AN INTERCONNECTION AGREEMENT BY AND BETWEEN THE CITY OF DENTON, TEXAS AND DENTON POWER, LLC; AUTHORIZING THE CITY MANAGER TO EXECUTE AND DELIVER A POWER PURCHASE AGREEMENT BY AND BETWEEN THE CITY OF DENTON, TEXAS AND DENTON POWER, LLC; AND APPROVING THE EXECUTION OF SUCH OTHER AGREEMENTS AND DOCUMENTS WHICH ARE INCIDENT THERETO OR RELATED THERETO, AS SHALL REASONABLY BE DETERMINED BY THE CITY ATTORNEY OR HIS DESIGNEE; CONFIRMING AND RATIFYING THAT THE CITY OF DENTON, ITS MAYOR, AND ITS CITY MANAGER SHALL BE AUTHORIZED AND EMPOWERED TO PERFORM SUCH ACTS AS ARE REASONABLY REQUIRED TO CONSUMMATE THIS TRANSACTION; FINDING AND DETERMINING THAT THE INTERCONNECTION AGREEMENT AND POWER PURCHASE AGREEMENT 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; ADOPTING SIGNIFICANT FINDINGS, CONCLUSIONS, AND RECITATIONS AS ARE SET FORTH IN THE PREAMBLE OF THIS ORDINANCE; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR AND THE PERFORMANCE OF THE AGREEMENT BY THE CITY; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on the 15th day of April, 2008, the City of Denton, Texas ("Denton") passed and approved an ordinance, being Ordinance No. 2008-087 wherein the City leased to Denton Power, LLC ("Denton Power"), by an Amended and Restated Landfill and Digester Gas Rights and Collection Facility Lease (the "Lease") that provided for the extraction, collection, processing, use, sale, and delivery of landfill gas from the City's landfill and digester gas from the City's Wastewater Plant, for which Denton participates by a royalty interest of the gas energy produced and a percentage of certain Internal Revenue Service Credits, under Section 45 of the Internal Revenue Code, if certain benchmarks are achieved; and WHEREAS, the next step in the transaction was for the Denton and Denton Power to enter into a written "Interconnection Agreement" which provides for Denton Municipal Electric ("DME") to interconnect the Denton Power's modest generation resource (maximum 1.6 MW) to Denton's transmission and distribution (T&D) system, so that the generation facility to be constructed by Denton Power, solely at Denton Power's expense, can function for its intended purpose, to generate electric energy from Denton's methane gas emerging and emanating from its landfill, which will be sold by Denton Power exclusively to Denton under the terms of the Power Purchase Agreement, referred to hereinbelow; and WHEREAS, Denton and Denton Power have negotiated the terms of said interconnection and have reduced their agreement to a writing which is entitled "Interconnection Agreement;" and which document is protected by law from public disclosure under the Public Power Exception as provided for under Sec. 551.086 and 552.133 of the Texas Government Code; and WHEREAS, staff has recommended to the City Council the terms contained in the "Interconnection Agreement" which Agreement has been provided to the City Council under the terms of the Public Power Exception, with its Closed Meeting materials, and which terms have been negotiated by staff to its satisfaction; and WHEREAS, the City of Denton, Texas as Purchaser, and Denton Power have negotiated a sixteen (16) year Power Purchase Agreement ("PPA") providing, among other things, that Denton purchase all of the electric power generated by Denton Power's generation facility located at the City landfill, at the prices stated in the Power Purchase Agreement; and which PPA provides that Denton acquires all of the Renewable Energy Credits regarding the production of electric energy at the facility, together with the Compliance Premiums thereon; and WHEREAS, as Denton owns the Renewable Energy Credits and Compliance Premiums, together with the offset emissions associated with the generation of electric energy from the facility, under the terms of the Power Purchase Agreement, Denton is entitled to represent that the electricity produced at the landfill facility by Denton Power is "green" or "renewable;" and WHEREAS, staff has recommended to the City Council the terms contained in the "Power Purchase Agreement," which PPA has been provided to the City Council under the terms of the Public Power Exception, with its Closed Meeting materials, and which terms have been negotiated by staff to its satisfaction; and WHEREAS, the City of Denton, Texas is a Home-Rule City governed by the constitution and laws of the State of Texas; and WHEREAS, the City Council has further determined that the Interconnection Agreement as well as the Power Purchase Agreement, by and between Denton and Denton Power should be exempted from any public disclosure, as permitted by the provisions of §552.133 of the Texas Government Code, as well as any other document reasonably connected thereto, 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 and its municipally-owned electric utility, Denton Municipal Electric; 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 and contain competitive electric information; and WHEREAS, the City Council desires to enter into such other agreements with Denton Power and its affiliates, which are in addition to, incident to and related to the "Interconnection Agreement" and the "Power Purchase Agreement" and the City Council hereby authorizes the City Manager to take such additional actions as he shall determine is necessary and advisable to effectuate the matters set forth herein; and WHEREAS, in accordance with the provisions of §551.086 of the Texas Government Code, after due notice being given, the City Council, a "Public Power Utility Governing Body" under Senate Bill 7, has discussed, deliberated, and considered the matter, the subject of this ordinance, in a Closed Meeting of the City Council on the 9th day of September, 2008, after 2 determining by a preliminary majority vote of its members, that the consideration of this item, which are the subject of this ordinance is related to the competitive activity of Denton Municipal Electric ("DME"), including 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 discuss, deliberate, and consider the matter of this transaction which is the subject of this ordinance, and voted, in its Closed Meeting, on the 9`h day of September, 2008, in favor of entering into the Interconnection Agreement and the Power Purchase Agreement, and approved the following Ordinance; NOW THEREFORE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The above Preamble to this Ordinance be, and it is, hereby ratified and confirmed as being the true and correct factual background underlying the passage of this Ordinance. SECTION 2. The City Manager, is hereby authorized to execute on behalf of the City of Denton, an "Interconnection Agreement" by and between the City of Denton, Texas and Denton Power, LLC. regarding the interconnection of the Denton Power generation facilities to Denton transmission and distribution facilities for the fees and rates established by Denton Municipal Electric, to be paid by Denton Power; said Agreement shall be in accordance with the form of that Agreement which has been provided to the City Council in Closed Meeting on the 9th day of September, 2008; the final form of which will be approved by the City Attorney or his designate. SECTION 3. The City Manager, is hereby authorized to execute on behalf of the City of Denton, a "Power Purchase Agreement" by and between the City of Denton, Texas and Denton Power, LLC regarding Denton's purchase of all of the electric energy from the landfill facility of Denton Power, upon the terms, conditions, and for the prices set forth in said agreement; said PPA shall be in accordance with the form of the PPA which has been provided to the City Council in Closed Meeting on the 9`h day of September, 2008; the final form of which will be approved by the City Attorney or his designate. SECTION 4. The City Council hereby approves and authorizes the City Manager, and the City Secretary to execute and attest, respectively, any and all other documents incident and related to the Interconnection Agreement and the Power Purchase Agreement described in Sections 2 and 3 hereinabove; 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 5. The Mayor, the City Manager, the City Attorney, or their designates 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, if necessary, as the Mayor, the City Manager, the City Attorney or their designees shall determine to be necessary or advisable to effectuate the transaction set forth herein. 3 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 "Interconnection Agreement" and the "Power Purchase Agreement" and such other related documents which are provided for by this ordinance, the City Secretary is hereby directed to seal and maintain said documents under 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 by the City Attorney or his designate, or by a court of competent jurisdiction. SECTION 8. The expenditure of funds and the performance of the agreement as set forth in the Ordinance is hereby authorized. SECTION 9. This Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this 9- day of September, 2008. Qul~_e / M A. G , AYOR ATTEST: JENNIFER WAL By: CITY SECRETARY APPROVED AS TO LEGAL FORM: JOHN M. KNIGHT, INTERIM CITY ATTORNEY BY: 4