2000-405O IN CE NO -
AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY
MANAGER TO EXECUTE AN AGREEMENT BY AND BETWEEN THE CITY OF
DENTON AND THE DENTON GARLAND GREENVILLE POWER POOL, PERTAINING
TO THE CITY'S ACQUISITION OF CAPACITY AND ENERGY FOR CALENDAR YEAR
2001, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROViDING
AN EFFECTIVE DATE
WHEREAS, Denton Mununpal Electric ("DME") 1s a municipally owned electric utlhty,
which qualifies as a "Public Power Utility" under the provisions of Senate Bill 7, enacted by the
76th Texas Legislature DME Staff has determined that it is necessary at this time to acquire
additional capacaty and energy for calendar year 2001, so that it can maintain sufficient firm
capacity and energy to meet its dtuly megawatt load plus reserve megawatt capacity
requirements to insure agmnst unforeseen generating unit outages or load growth above forecast,
and such aequlmtlon further provides more reliable electric service at peak load times for DME's
customers, and
WHEREAS, the City's purchase of electric capacity and energy provided for in the letter
Agreement dated September 19, 2000 (the "Agreement") is exempted from compehtlve bldchng
requirements as an expenditure for "electricity," as provxded by Section 252 022 (a)(15) of the
Texas Local Government Code, and
WHEREAS, in accordance with the provisions of Section 551 086 of the Texas
Government Code, after public notice, the City Council, a "Public Power Utility Governing
Body" under Senate Bill 7, has &scussed, deliberated, and considered the matter of this
Agreement in a Closed Meeting on the 17th day of October, 2000, after determining by a
preliminary majority vote of its members, that the consideration of this Agreement is related to
DME's competitive activity, including commercial information, which if disclosed, would give
advantage to its competitors or prospective competitors, and thereafter, the City Council, by a
vote taken m smd Closed Meeting, voted for approval of the Agreement, and
WHEREAS, the City Council has further determined that the "Agreement" to be entered
into by and between the City and Denton Garland Greenville Power Pool ("DGG") should be
excepted from any public disclosure, as permitted by the provisions of Section 552 131 of the
Texas Government Code, as a document that is reasonably related to a competitive electric
matter, the disclosure of which document would provide an advantage to DME's competitors or
prospective competitors, and
WHEREAS, the City Council deems it in the public interest for the Clty of Denton to
enter into the Agreement, NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION 1 That the recltat~ons and findings set forth m the Preamble here~nabove are
hereby approved and made a part of ttns Ordinance
SECTION 2 That the C~ty Manager ~s hereby authorized to execute an Agreement by
and between the City of Denton, Texas and the Denton Garland Greenwlle Power Pool, for the
City's acqms~t~on of adtht~onal capacity and energy for calendar year 2001, in substantmlly the
form of the Agreement attached hereto and incorporated herewith by reference
SECTION 3 That following the execution and dehvery of the Agreement, the C~ty
Secretary ~s hereby d~rected to seal and mmntmn smd Agreement ~n her custody and control, as a
document excepted from pubhc d~sclosure under the provisions of Section 552 131 of the Texas
Government Code (the "Pubhc Power Exceptmn"), unless otherwise lawfully ordered to dmclose
smd Agreement
SECTION 4 That the expen&ture of funds as prowded ~n the attached Agreement ~s
hereby authorized
SECTION 5 That th~s ordinance shall become effective ~mmed~ately upon ~ts passage
and approval
PASSED AND APPROVED th~s the /r) ¢'tUflday of ~}~ ,2000
EULINE BROCK, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
API~OVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
S \Our Documents\Ord~nanees\00~DGG DME Capacity Purchase 20010rd doc
G/ (RLAND
September 19, 2000
Ms Sharon Mays
Denton Mum¢lpal Utlhtles
g01-A Texas Street
Denton, TX 76201
Re 2001 Capaoty Sale and Purchase
Dear Ms Mays
Th~s letter ms written to confirm the Denton Garland Greenville Power Pool (DGG) capacity sale by DGG
members the City of Garland and the Greenville Electric Utlhty System (Sellers) to DGG member the
City of Denton (Buyer) for the one year period beg~nning .lanuary 1, 2001
~[n addition tO regular DGG economic dispatch functions, Sellers are wdhng to furmsh Buyer the rights
to 40 MW of capaoty, dunng each month of calendar year 2001, under the following terms
1 ) Buyer agrees to pay Sellers $180,000 each calendar month of 2001 Invo~ong and payment wdl
be deemed made by adjustments to each monthly DGG Energy Summary - Prehm~nary
2 ) Sellers ~wdl split the revenues in accordance with a proporbonate excess capaoty calculation to
be made prior to October 1, 2000, and wdl provide Buyer w~th data on generation sources to
enable Buyer to ~nclude the capaoty purchased ~n ~ts Annual Planned Service Request
3 ) Buyer ~grees to commit all of ~ts generabon resources to DGG economic d~spatch operation, and
to operate such resources ~n accordance w~th the pohoes of the DGG P&O Committee, dunng
the entire term of the capacity sale
4 ) Sellers lhave no obligation to dehver any energy or operating reserves by wrtue of th~s capaoty
sale Buyer and Sellers w~ll continue to dehver, receive and price economy energy ~n accordance
w~th the pohoes of the DGG P&O Committee
5 ) Buyer tecogmzes that the offer to sell capacity hereunder reflects Sellers current price only to
purchasers i) purchasing a fixed amount of capacity for each month during calendar year 2001,
ii) hawng no right to or call on any energy or operating reserves as a result of the capacity
purchaise, and Iii) wdhng to commit all of their generation assets to DGG joint operabon dunng
the term of the capaoty purchase
6 ) Buyer agrees that ~t will not resell or assign the rights to any capaoty purchased hereunder from
Sellers,w~thout the prior consent of Sellers