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HomeMy WebLinkAboutResolution - 366 - Agreement - Pioneer Natural Gas Company -Natural Gas, Municipal Power Plants - 12/12/1979vDGV:ci` RESOLUTION #366 - 12/12/79 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Gas Sales Agreement between Pioneer Natural Gas Company, .a).Division of Pioneer Corporation, and the City of Lubbock, attached herewith which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council.this 12th day of December ,1979. WEST, MAYOR ATTEST :4 i Ovelyn Gf ga, Ctty ec ry-Treasurer APPROVED AS TG FORM: Dona G. Vandiver, First Asst. City Attorney PIONEER NATURAL GAS COMPANY (A Division of PIONEER CORPORATION J. J. HEITZ Senior Viae President RESOLUTION X1366 - 12/12/79 RECEIVED 1UL 2'j MAYOR'S OFFICE t y:tt. July 22, 1980 Honorable Mayor and Members of the City Council City of Lubbock Lubbock, TX Attention: Mr. Bill Woods Re: Gas Sales Agreement dated December 1979 between Pioneer Natural Gas Company and City of Lubbock Gentlemen: This letter, when executed by you in the space below provided, shall constitute our agreement pursuant to Section 5, Article VII of the above referenced contract, that the term of said contract shall be extended to December 31, 1986. Except as expressly amended hereby, the aforesaid contract shall remain in force and effect pursuant to the terms and conditions therein contained. If you are in agreement with the foregoing, please so indicate by executing below and returning one fully executed copy of this letter to US. ACCEPTED and AGREED to this 14th day of August 1980. CIT=31--l"'r-A'A'ster, OCY, By 35, -Mayor Yours very truly, PIONEER NATURAL GAS COMPANY, a POST OFFICE BOX 511 / AMARILLO. TEXAS 79163 / PHONE 806 378.3300 / TWX 910-898-4108 RESOLUTION #366 - 12/12/79 GAS SALES AGREBENT between PIONEER NATURAL GAS COMPANY, A DIVISION OF PIONEER CORPORATION as "Seller" and CITY OF LUBBOCK as "Buyer" Dated: December 14 , 1979 INDEX ARTICLE " TITLE PAGE'NLMBER I Definitions 1 II Quantity 2 III Delivery Point 4 IV Delivery Pressure 4 V Metering 5 VI Measurement 6 VII Price 8 VIII Heating Value 13 IX Billing and Payment 13 X Quality 14 XI Title 15 XII Force Majeure 16 XIII Notices 17 XIV Successors and Assigns 17 XV Maintenance of Facilities 18 XVI Duration of Agreement 18 XVII Indemnification 18 XVIII Descriptive Headings 18 XIX Miscellaneous lg XX Governmental Regulations 19 . GAS SALES'AGREEMENT THIS AGREEMENT made and entered into this 14th day of December, A.D., 1979, by and between PIONEER NATURAL GAS COMPANY, a Division of Pioneer Corporation, a Texas corporation (hereinafter referred to as "Seller"), and CITY OF LUBBOCK, a municipal corporation (hereinafter referred to as "Buyer"); WITNESSETH WHEREAS, Buyer is desirous of purchasing certain volumes of gas to be used in Buyer's municipal power plants located in Lubbock County, Texas; and WHEREAS, Buyer is purchasing certain volumes of natural gas from Seller pursuant to a Gas Sales Agreement dated May 2, 1974, as amended January 1, 1976, which is to be canceled and superseded effective January 1, 1980; and WHEREAS, Seller can make available to Buyer certain volumes needed by Buyer in Buyer's municipal power plants and Seller desires to sell such volumes of gas to Buyer; NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, Seller and Buyer do hereby mutually covenant and agree as follows: ARTICLE I DEFINITIONS Section 1. "Day" shall mean the period of twenty-four (24) consecutive hours commencing at 7:00 A.M. on one calendar day and ending at 7:00 A.M. on the following day. Section 2. 'Billing Month" shall mean the period commencing at 7:00 A.M. on the first day of a calendar month and ending at 7:00 A.M. on the first day of the following month. Section 3. "Accounting Year" shall mean a yearly period commencing at 7:00 A.M. an January l and ending at 7:00 A.M. on the next succeeding January 1. In the event deliveries conrnence hereunder on a date other than January 1, the period of time from the date of first deliveries until the next following January 1 shall be considered as the first accounting year. In the event deliveries per- manently cease an.a date other than a January 1, the period of time from the January 1 immediately preceding the date of such delivery cessation shall be con- sidered as the final accounting year. Section 4. The term 'Tbf" shall wean one thousand cubic feet at a temperature of 60 degrees Fahrenheit and an absolute pressure of 14.65 pounds per square inch. Section 5. The term "Btu" shall mean British thermal unit. Section 6. The term "Heating Value" shall mean the Btu content of the gas delivered. Section 7. The term -"Buyer's municipal power plants" as used herein shall mean Buyer's electrical generating plants located at or near the City of Lubbock in Lubbock County, Texas. Section 8. The term "Gas" shall mean any one or any combination of the following: natural gas, liquefied natural gas, synthetic gas or manufactured gas. ARTICLE II QUANTITY Section 1. Cor ening January 1, 1980, and continueing through the remaining term of this Gas Sale Agreenent, Seller agrees to sell and deliver to Buyer the volume of gas as may be requested by Buyer for consumption in Buyer's -2- Plants; provided, however, Seller shall not be obligated to make deliveries of gas to Buyer in excess of 30,000 Mcf on any one day. 'Secti6ri'2. Commencing January 1, 1980, Buyer agrees to take and pay for, or nevertheless pay for, if not taken, a minimwn volume of 7,000,000 Mcf of gas during each accounting year thereafter during the term hereof. In the event any accounting year does not contain twelve (12) billing months, then Buyer shall be obligated to accept 1/12th of such volume for each complete billing month contained in such accounting year. Section'3. In the event Buyer fails to take from Seller during any accounting year of the term hereof the minimum volume of gas which Buyer is obligated to take and pay for from Seller during such accounting year pursuant to the provisions of Section 2 of this Article II, then within ninety (90) days after the end of such accounting year when there is a deficiency in takes, Buyer shall pay Seller for that quantity of gas which equals the difference between the minimum volumes Buyer was obligated to take and pay for and the volume which Buyer did actually take and pay for. The price which Buyer shall pay Seller for such deficiency shall be the price in effect at the time the deficiency occurred. Section 4. Gas delivered under this contract shall be subject to curtailment or interruption when necessary to protect public health and safety or to maintain service to higher priority customers of Seller. Such curtailment or interruption shall be performed in accordance with the company's applicable rules from time to time in effect and on file with the Texas Railroad Commission or any successor regulatory agency, and shall not be the basis for any claim for damages sustained by any party. In the event curtailment or interruption becomes necessary, Seller will use its best efforts to curtail all customers of the same classification in the immediate vicinity proportionately. Section S. In the event an interruption in, or curtailment of, - 3 - s deliveries shall become necessary or advisable, Seller shall notify Buyer as soon as possible by telephone, telegraph or other means, of the nature, extent and probable duration of such interruption or curtailment. Buyer shall resume the taking of gas within a reasonable length of time following notification by Seller that gas is again available. Section 6. In the event the delivery of gas is interrupted or curtailed at the request of Seller pursuant to Section 4 of this Article II, or at the request of Buyer pursuant to Article XII, then, in such event, the minimum volume of gas herein contracted for shall be reduced for that annual period by 1.5/365th of such minimum annual volume for each day or portion of a day that the delivery of gas hereunder was interrupted or curtailed. ARTICLE III DELIVERY POINT Section 1. The delivery of gas hereunder shall be made at a point located at Buyer's power plants in the City of Lubbock. Section 2. Sufficient space for a meter, or meters and regulators, is to be furnished free by Buyer at a location to be agreed upon at each municipal power plant. Section 3. Buyer agrees to assign to Seller sufficient easements and rights of way over, across and under any land that Buyer has the right so to do, and the right to perform thereon any acts necessary for carrying out the terms of this contract. ARTICLE IV DELIVERY'PRESSURE Section 1. Deliveries shall be made at the pressure requested by Buyer, but not to exceed 75 psig except deliveries may be made at higher pressures if neither party objects. - 4 - ARTICLE V METERING Section 1. Seller, at its sole cost, risk and expense, shall install, maintain and operate at the point or points of delivery hereunder a standard type orifice or positive meter or meters for measuring the volume of all gas purchased by Buyer hereunder and Seller shall cause said meters to be read daily or at other mutually agreeable intervals. Orifice meters and other facilities so in- stalled at the point of delivery shall be constructed and installed in accordance with the specifications prescribed by Report No. 3 of the Gas Measurement Committee of the American Gas Association dated April 1955, and supplements thereto, or other generally accepted specifications, agreed to by the parties. Section 2. Said meters and all meter readings and meter charts shall be accessible at all reasonable times to inspection and examination by Buyer, but the calibration and adjustment of Seller's meter or meters shall be done by Seller. Seller may destroy meter charts and other records after two years. Section 3. Buyer may install, maintain and operate such check measuring equipment as it desires, provided that such check meter and equipment shall be so installed as not to interfere with the operation of Seller's meters, Section 4. Each such orifice meter installed by Seller shall be cali- brated at least once each thirty (30) days by and at the expense of Seller, in the presence of Buyer's representative if Buyer so desires. Seller shall give Buyer or Buyer's designated representative notice of each such calibration test in sufficient time to enable Buyer to have its representative present. If upon any such test, the measuring equipment is found to be not more than two percent (2%) erroneous in the aggregate, previous readings of such equipment shall be considered correct in computing the deliveries of gas hereunder, but such equip- ment shall be adjusted at once to read accurately. If, upon any test, the measuring equipment shall be found to be inaccurate in the aggregate by an amount exceeding - 5 - two percent (2a) at a reading corresponding to the average rate of flow for the period since the last preceding test, then any previous reading of such equipment shall be corrected to zero error for any period which is known definitely or agreed upon, but in case the period is not known definitely or agreed upon, then for a period extending back one-half (1/2) of the time elapsed since the date of the last test, but not to exceed thirty (30) days. If for any reason any meter is out of service or out of repair so that the volume of gas purchased cannot be ascertained or computed from the reading thereof, the volume of gas purchased during the period such meter is out of service or out of repair shall be estimated or agreed upon by the parties hereto on the basis of the best data available using the first of the following methods which is feasible: (a) By using the registration of Buyer's check meter if installed and accurately registering. (b) By correcting the error in Seller's meter if the percentage of error is ascertainable by calibration test or mathematical calculation. (c) By estimating the volume of delivery by using as a basis the volumes delivered during preceding periods under similar conditions when the meter was registering accurately. ARTICLE VI IN- it 0iH,h, Section 1. All measurement of gas hereunder shall be in accordance with the recommendations for measuring gas contained in Report No. 3 of the Gas Measurement Committee of the American Gas Association dated April 1955, including the supplements thereto, or other generally accepted tables relating to gas measurement applied in a practical and appropriate manner. Correction shall be r made for deviation from Ideal Gas Laws as provided for in Section 5 of this Article VI. Section 2. An assumed atmospheric pressure of thirteen and one-tenth (13.1) pounds per square inch absolute at the delivery point shall be utilized for measurement purposes, irrespective of any variation of the actual atmospheric pressure from such assumed pressures. Section 3. Seller shall, at its sole cost, risk and expense, install, maintain and operate a temperature compensating -device or recording thermometer of standard manufacture, so that it may properly record the temperature of gas flowing through Seller's meter or meters. The arithmetical average of the twenty-four (24) hour record, or that portion of the twenty-four (24) hours during which gas was passing, shall be assumed to be the temperature of the gas for that period and shall be used in making proper computations of measure- ment. Section 4. Seller shall, at its sole cost, risk and expense, install, maintain and operate a recording gravitometer of standard manufacture, so that it may properly record the gravity of the gas flowing through Seller's orifice meter or meters. The gravity so determined shall be used in the computations of measurement. In the event Seller has installed, or shall in the future in- stall, a recording gravitometer at a point on its system which properly records the specific gravity of the total stream, a portion of which is sold hereunder, said gravitometer may be used to ascertain the specific gravity for which cor- rection is to be made. Seller may, at its option, install a composite sampling device at the delivery point hereunder and the specific gravity may be determined as often as may be found necessary in practice from samples obtained by such devices. Section S. The deviation of the gas from the Ideal Gas Laws shall - 7 - be determined by tests at one (1) year intervals or at such other intervals as may be found necessary in practice, or as may be requested by Buyer. Buyer shall not request such test more frequently than once every three months Such tests shall be made by a mutually agreeable method generally accepted by the gas industry from time to time. Each test shall determine the correction to be used in computing the volume of gas deliveredhereunder until the next such test is made. Section -6. Each party hereto, or its designated representative, shall conduct the tests and determinations under this Article VI which are to be made with equipment owned or to be furnished by said party, but the party making such tests or determination shall give the other party, or its designated representative, notice of each such test or determination in sufficient time to enable said other party to have its representative present. ARTICLE VII PRICE Section 1. Commencing January 1, 1980, and continuing through December 311, 1981, Buyer shall pay Seller for gas delivered hereunder and measured as herein provided for a price equal to the sum of: (1) Seller's weighted average cost of purchased gas as defined in Section 4 of this Article VII, plus (2) An increment of Thirty -Seven and One Tenth Cents (37.10 per Mcf. Such price is subject to the adjustment as provided for in Section 3 of this Article VII. Section 2. On or before July 1, 1981, and each two years thereafter, the parties will meet to determine the price to become effective the following January 1. In the event the parties are unable to agree upon a price commencing January 1, 1982, or any succeeding January 1 each two years thereafter, then in such event, this agreement shall terminate effective January 1, 1982, or any succeeding January 1 each two years thereafter and neither Seller nor Buyer shall have any further obligation to the other and all rights and obligations shall terminate effective the last day of deliveries to Buyer except for Buyer's continuing obligation to pay for gas received but not paid for. Section 3. The above price provisions, as adjusted, are based on the delivery of natural gas having an average total heating value of 1,000 British thermal units per cubic foot. Should the average total heating value of the gas delivered in any billing period be more than 1,000 British thermal units per cubic foot, or less than 1,000 British thermal units per cubic foot, the total charge for such month shall be increased or decreased respectively in the percentage by which the average total heating value of such gas is greater than 1,000 British thermal units per cubic foot, or less than 1,000 British thermal units per cubic foot. Section 4. For the purpose of this agreement the term "weighted average cost of purchased gas" shall mean the average price per one thousand (1,000) cubic feet paid by Seller for all gas purchased by Seller, for utilization in Seller's West Texas Transmission and Delaware Basin Divisions, computed to the nearest one- hundredth of one cent and shall be determined by dividing the total dollar amounts paid or accrued on Seller's books for all such gas purchased by Seller during the applicable billing month by the total number of Mcf of gas purchased by Seller during such applicable billing month, adjusted to the same pressure base as gas sold hereunder and shall include in addition to the cost of gas itself: (1) Interest charged at the prime rate in effect on the first day of each month upon funds advanced for gas development or dedicated volumes based upon the outstanding portion of such advancements; (2) Amortization over a five-year period of advances for gas supply development which is nonproductive; and (3) Amounts expended which are accrued by Seller to parties other than Seller for the purchase, transportation, gathering, compressing, treating, or handling of gas, taxes attributable to the purchase or production of such gas and other similar actual amounts borne by Seller and paid or payable to parties other than Seller, but shall not include any charges attributable to Seller's amortization of its own facilities, Seller's overhead charges, Seller's direct labor or maintenance expense, or similar expenses of Seller; provided, however, if any gas purchased by Seller requires treating by Seller for the removal of hydrogen sulfide and/or organic sulfur and/or carbon dioxide and/or water vapor, Seller's total cost of treating such gas, including shrinkage, amortization of facilities, overhead charges, direct labor and maintenance expense, shall be added to the cost of such gas; and provided further, Seller's total cost of its gas storage operations including fuel, amortization of facilities, overhead charges, direct labor and maintenance expenses shall be added to the cost of such gas. Should Seller pur- chase gas for utilization in Seller's West Texas Transmission and Delaware Basin Divisions under a contract or contracts containing a Btu adjustment clause, the volumes of gas purchased under such contract or contracts shall be adjusted in deter- mining the total number of Mcf of gas purchased by Seller during such month for the purpose of this Section 4 of Article VII by multiplying the volumes of gas purchased under any such contract by a fraction, the numerator of which is the average Btu per thousand cubic feet of gas purchased under such contract and the denominator of which is 1,000. If any portion of the cost of gas or of any taxes which have been paid by Seller is refunded to Seller, or if Seller is required by the terms of any gas pur- chase contract, or of any agreed settlement of a disputed claim, or by a determin- ation or judgment of a regulatory body or court having or asserting jurisdiction, to make retroactive payments with respect to gas previously purchased by Seller, then appropriate adjustments to compensate therefor shall be made in the price payable for gas delivered by Seller to Buyer hereunder as soon as practicable after the time of such cancellation, refund or retroactive payment, provided, that the period during which such adjustments are to be made shall be determined by Seller subject only to the condition that the same shall be made within a reasonable period of time, taking into consideration the total amount of any such cancellation, refund or retroactive payment, but no adjustments as provided for herein shall be made after - 10 - this agreement has terminated except with respect to items canceled, refunded or paid prior to the date of such termination, nor shall any adjustments as provided for herein be made with respect to any gas purchased by Seller prior to the first delivery of gas to Buyer hereunder. Nothing contained in this agreement shall prevent Seller from entering into any amendment, modification, renewal, extension or replacement of any existing or future gas purchase contract or contracts between Seller and any of its gas suppliers. Section 5. Prior to July 1, 1980, and each July 1 thereafter during the term of this agreement and as it may be extended from time to time, representatives of Buyer and Seller shall meet to determine if this agreement may be amended and/or extended, and if so, the terms and conditions of any such amendment and/or extension upon which the parties may agree, it being the intention of the parties that so long as Buyer requires gas for its said plants which may be satisfied in whole or in part by Seller upon terms and conditions acceptable to both parties, the parties shall endeavor to reach agreement for successive one-year extensions of the term provided in Article XVI of this agreement. Any such one-year extension shall be made only after a positive determination by Seller of the adequacy of its gas supply and the determination by Seller, in its sole discretion, that it has sufficient gas supplies to perform its obligations during such extension. In the event the parties do not agree upon further amendment and/or extension, and the terms and conditions thereof, then this agreement shall terminate in accordance with its terms. Section 6. In addition to the price to be paid for gas delivered here- under Buyer agrees to pay Seller an amount equal to all of any increased, add- itional or new production, severance, gathering, processing, transmission, sales or delivery taxes in excess of or in addition to those in existence on January 1, 1980 which are levied upon or attributable to all or any portion of such gas, the value thereof or the processing or handling thereof before the delivery of such gas to Buyer or in connection with such delivery. All taxes levied on such gas after delivery shall be paid by Buyer. Applicable rulings or orders of governmental representatives in charge of the administration of any law or ordinance increasing or creating any such tax shall be binding and conclusive upon Buyer until such time as the invalidity thereof has been finally established by the decision of a court of competent jurisdiction. Buyer shall be entitled to reimbursement from Seller to the extent of any payments made by it to Seller pursuant to this Article VII which may subsequently be refimded to Seller by the taxing authority. Buyer shall not be obligated to reimburse Seller under this Section (1) for any ad valorem taxes on properties or for taxes which are based upon or measured by the natural gasoline or other liquefied hydrocarbon content extracted from the gas before delivery to Buyer or (2) for any taxes which are included in the computation of Seller's weighted average price of gas and paid by Buyer pursuant to Section 4 of this Article VII. Section 7. For the purpose of billing and accounting for gas delivered hereunder, Seller will use its usual calculations in Seller's determination of the weighted average price, as defined in Section 4 of this Article VII, of gas pur- chased by Seller during any applicable period and nothing herein shall be construed so as to require Seller to change such procedure. Section 8. During the first two years of the term hereof commencing January 1, 1980, the price as established under Section 1 of this Article VII shall be reduced for the current year if the actual curtailments for the next preceding year exceeded either 30 or 4% of the actual volumes of gas delivered hereunder during such annual period. In the event the actual curtailments for the next preceding year were greater than 3% but less than 4%, then the price for the current year will be reduced One and Two Tenths Cents (1.2�) per Mcf. If the actual curtailments for the next preceding year were greater than 4%, then the price for the current year will be reduced Two and Four Tenths Cents (2.40) per Mcf. The reduction for any year shall never exceed Two and Four Tenths Cents (2.4�) per Mcf. - 12 - ARTICLE VIII HEATING VALUE Section 1. The Btu content of the gas delivered hereunder shall be determined for a cubic foot of gas at a temperature of sixty (60) degrees Fahrenheit at an absolute pressure equivalent to that of thirty (30) inches of mercury, and at the moisture content of the gas delivered. Such total heating value of the gas delivered shall be determined by a composite sampling device to be installed, maintained and operated by Seller at its sole cost, risk and expense. The moisture content of the gas delivered shall be determined by Seller as often as is found necessary in practice. Section 2. The average total heating value per cubic foot of gas shall be determined for any billing period by taking the arithmetic average of the heating value as determined pursuant to Section 1 of this Article, and such average total heating value shall be used in adjusting the price provisions hereunder. In the event Seller has, or shall in the future install, a sampling device or recording calorimeter at a point on its system which properly records the heating value of the total stream a portion of which is sold hereunder, said sampling device or calorimeter may used to ascertain the heating value for which correction is to be made. ARTICLE IX BILLING AND PAYMENT Section 1. On or before the 20th day of each calendar month, Seller shall render a statement to Buyer giving the total volume of gas purchased here- under during the preceding monthly period, such statements to be rendered in accordance with this agreement, and shall include any amounts due for tax reim- bursement under the provisions of Article VII hereof; provided, however, if the amount of reimbursement to Seller cannot be determined currently, Seller may bill - 13 - Buyer and Buyer shall make payment therefor within a reasonable period after such amount becomes determinable. Section 2. It is understood and agreed between the parties hereto that if Seller's weighted average cost of gas as defined in Section 4 of Article VII hereof cannot be determined by the 20th working day of the following month, then the parties agree that Seller shall utilize an estimated weighted average cost of purchased gas in rendering the statement provided for in Section 1 of this Article IX. The parties further agree that the statement to be rendered the following month shall contain a debit or credit, whichever is applicable, in correcting the prior month's statement from the estimated weighted average cost to actual weighted average cost. Section 3. Payment shall be made by Buyer to Seller within ten (10) days after receipt of the statement. Section 4. Seller shall render to Buyer on or before the first day of March each year a statement setting out the amount of gas, if any, but which Buyer failed to take Buyer's minimum annual purchase obligation during the preceding accounting year as provided in Article II hereof, and Buyer shall pay to Seller the amount due within thirty (30) days after receipt by Buyer of such statement. Section S. All statements, bills and payments shall be subject to correction of any errors contained therein until the expiration of one year after date of payment. Section 6. Any amounts due for gas hereunder remaining unpaid after the due date for each payment provided for herein shall bear interest at the rate of ten percent (100) per annum until paid. ARTICLE X QUALITY Section 1. Gas delivered by Seller hereunder shall conform to the following specifications: - 14 - (a) Liquids: The gas shall be commercially free from water and hydrocarbons in liquid form. (b) Hydrogen Sulphide: The gas shall not contain more than one (1) grain of hydrogen sulphide per one hundred (100) cubic feet. (c) Organic Sulphur: The gas shall not contain more than twenty (20) grains of organic sulphur per one hundred (100) cubic feet. (d) Carbon Dioxide: The gas shall not contain more than three percent (3%) carbon dioxide by volume. (e) Dust'Gumis, etc.: The gas shall be commercially free of dust, gums and other solid matter. (f) Water Vapor: The gas shall not contain more than nine (9) pounds of water in the vapor phase per million cubic feet. (g) Heating Value: The gas shall have a gross heating value of not more than twelve hundred fifty (1250) and not less than nine hundred fifty (950) British thermal units per cubic foot. (h) Temperature: The temperature of the gas shall not exceed one hundred twenty (120) degrees Fahrenheit. ARTICLE XI TITLE Section 1. Seller shall be in control and possession of the gas delivered hereunder and responsible for any damage or injuries caused thereby until the same shall have been delivered to Buyer at the point of delivery, after which delivery Buyer shall be deemed to be in exclusive control and possession thereof and responsible for any such damages or injuries. Section 2. Seller expressly warrants its title to and rights to sell the gas to be delivered hereunder free and clear of all liens and Seller will hold Buyer harmless against adverse claims thereon. a � t ARTICLE XII FORCE MAJEURE Section 1. The obligations of either party hereto shall be suspended during such time as such party is prevented from complying therewith in whole or in part by acts of God, strikes, war, lockouts, orders or decrees of any lawfully constituted state, federal or local body, temporary failure of Seller's gas supply due to causes or conditions reasonably beyond Seller's control, or other causes or conditions reasonably beyond the control of either party, whether like or unlike those herein enumerated, or on account of either party making necessary repairs to or replacements of facilities used in the delivery, receipt, transmission or utilization of gas, or because of any other cause, except financial, beyond the reasonable control of such party. Section 2. In the event of either Buyer or Seller being rendered unable wholly or in part by force majeure to carry out its obligations under this agree- ment, other than to make payments due hereunder, it is agreed that on such party giving notice and full particulars of such force majeure in writing or by telegraph to the other party as soon as possible after the occurrence of the cause relied on, then the obligations of the parties insofar as they are affected by such force majeure shall be suspended during the continuance of any inability so caused but for no longer period, and such cause shall as far as possible be remedied with all reasonable dispatch. Section 3. The settlement of strikes or lockouts shall be entirely within the discretion of the party having the difficulty, and the above requirements that any force majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the demands of opposing party when such course is inadvisable in the discretion of the party having the difficulty. - 16 - ARTICLE XIII "NOTICES Section'l. Notices to be given hereunder, unless otherwise designated in writing, shall be deemed sufficiently given and served when deposited in the United States mail, postage prepaid, by first class, certified or registered mail to the following addressess: To Seller: Pioneer Natural Gas Company P. 0. Box 511 Amarillo, Texas 79163 To Buyer: City of Lubbock P. 0. Box 2000 Lubbock, Texas 79457 Section'2. Routine communications, including monthly statements and payments, shall be considered duly delivered when deposited in the United States mail, postage prepaid, by first class, certified or registered mail to the above addresses, or to such other address as may be mutually agreed upon. ARTICLE XIV SUCCESSORS AND ASSIGNS Section 1. This agreement may not be assigned by either party without the written consent of the other party, provided, however, either party may assign its rights, title and interest in, to and under this agreement to a trustee or trustees, individual or corporate, as security for bonds or other obligations or securities, without such trustee or trustees assuming or becoming in any respect obligated to perform the obligations of the assignor under this agreement, and, if any such trustee be a corporation, without its being required to qualify to do business in any state in which any performance of this agreement may occur. However, such assignment, for security purposes, shall not relieve the assigning party of any of its obligations under this agreement. - 17 - ARTICLE XV MAINTENANCE'OF FACILITIES Section'l. Each party hereto shall maintain the equipment, including meters and facilities owned by it and used in its performance hereof, in good, safe, efficient operating condition and repair. ARTICLE XVI DURATION 'OF 'AGREEMEW Section 1. This agreement shall be effective as of 7:00 A.M. on the first day of January, 1980, and shall continue and remain in full force and effect for a term ending December 311, 1985, unless extended by agreement of the parties pursuant to the terms of Section 5 of Article VII hereof. ARTICLE XVII INDEMNIFICATION Section 1. Seller agrees to indemnify and hold harmless Buyer against any and all loss, cost, claim or demand on account of any damage to property or injury to persons arising or resulting from Seller's operations hereunder. Buyer agrees to indemnify and hold harmless Seller against any and all loss, claim or demand on account of any damage to property or injury to persons arising or resulting from Buyer's operations hereunder. ARTICLE XVIII DESCRIPTIVE HEADINGS Section'l. The descriptive headings of the provisions of this agree- ment are formulated and used for convenience only and shall not be deemed to affect the meaning or construction of any such provisions. MEM a • • ARTICLE XIX 'WSCELLANEOUS Sectiori"l. It is agreed and understood that the supply and delivery of gas from Seller's lines as contemplated by this agreement is not within the objects or purposes of Seller in constructing, operating and maintaining said lines but is merely incidental to the construction, operation and maintenance of such lines to furnish domestic and commercial service in cities and towns con- nected to its system. ARTICLE XX` GOVERNMENTAL 'REGULATIONS Section 1. This agreement is made subject to all present and future valid laws of the State of Texas and the United States, and regulations or orders of duly constituted governmental authorities having or asserting jurisdiction which are applicable to the subject matter hereof and effective from time to time. In the event any such authority shall establish a price at the point of delivery provided herein, or a point related to a point of delivery different from the price applicable pursuant to this agreement, then the price as provided herein shall be adjusted as required in view of such established price. EXECUTED as of the%day of December, 1979. ATTEST: PIONEER NATURAL GAS COMPANY, a Division of Pioneer Corporation BY a rove, enior, ice rest ent CITY OF LUBBOCK .go - 19 - CITY SECRETARY -TREASURER 762-6411 P. O. Box 2000 LUBBOCK, TEXAS 79457 December 18, 1979 TO . PIONEER NATURAL GAS COMPANY RE Gas Sales Agreement Resolution #366 - 12/12/79 Hand -delivered to you on this date is a copy of the above referenced Resolution, authorizing the Mayor to execute the referenced Gas Sales Agreement, and a duplicate original of the Agreement itself, approved by the City Council on December 12, 1979 at its Regular Meeting, said docu- ments being duly recorded in Minute Book No. 38.of the Minutes of City Council dated December 12, 1979. Sincerely, EVELYN GAFFGA City Secretary -Treasurer Received from City Manager Larry Cunningham on this day of December, 1979. For and on behalf of Pioneer Natural Gas Company ARTICLE XIX .A"LSCELLANEOUS Sectiori'1. It is agreed and understood that the supply and delivery of gas from Seller's lines as contemplated by this agreement is not within the objects or purposes of Seller in constructing, operating and maintaining said lines but is -merely incidental to the construction, operation and maintenance of such lines to furnish domestic and commercial service in cities and towns con- nected to its system. ARTICLE XX ' GOVERI�3TAI: 'REGULATIONS 'Sectiori'1. This agreement is made subject to all present and future valid laws of the State of Texas and the United States, and regulations or orders Of duly constituted governmental authorities having or asserting jurisdiction which are applicable to the subject matter hereof and effective from time to time. In the event any such authority shall establish a price at the point of delivery provided herein, or a point related to a point of delivery different from the price applicable pursuant to this agreement, then the price as provided ' herein shall be adjusted as required in view of such established price. EXECUTED as of the 14th day of December, 1979. PIONEER NATURAL GAS Caff)ANY, a Division of Pioneer Corporation By � cone, enior Vice si ent CITY OF LUBBOCK - 19 - • Amends Reso. 366 — 12/12/79 • fII AMENDMENT TO GAS SALES AGREEMENT THIS AGREEMENT, made and entered into as the h day of December 1981, by and between ENERGAS COMPANY, a Division of Pioneer Corporation, a Texas corporation hereinafter referred to as "Seller" and CITY OF LUBBOCK, a municipal corporation, hereinafter referred to as "Buyer." W I T N E S S E T H WHEREAS, Pioneer Natural Gas Company and Buyer are parties to a Gas Sales Agreement dated December; 1979, as amended, providing tl- for the sale and delivery to Buyer of certain quantities of gas for municipal use; and WHEREAS, Seller has succeeded to the interests of Pioneer Natural Gas Company under said agreement for purposes of sales (1) to Buyer's power plants located at 5th and Avenue J and Municipal Hill within the City of Lubbock, and, (2) for general municipal consumption; and WHEREAS, the parties hereto desire to amend said agreement as hereinafter provided; NOW, THEREFORE, it is mutually agreed between Buyer and Seller that effective as of January 1, 1982, the said Gas Sales Agreement shall be amended and so as amended shall provide: Article 11, Quantity, Section 1 shall be deleted in its entirety and there is substituted therefor the following Article 11, Quantity, Section ]A. ARTICLE 11 QUANTITY Section ]A. Commencing January 1, 1980 and continuing a L the remaining term of this Gas Sales Agreement, Seller agrees to sell and deliver to Guyer the volume of gas as may be requested by Buyer for general municipal use and for consumption in Buyer's power plants located at 5th and Avenue J and Municipal,Hill; provided, however, Seller shall not be obligated to make deliveries of gas to Buyer in excess of 5,000 mcf on any one day. Article II, Quantity, Section 2 shall be deleted in its entirety and there is substituted therefor the following Article 11, Quantity, Section 2A. ARTICLE II QUANTITY Section 2A. Commencing January 1, 1982, Buyer agrees to take and pay for, or nevertheless pay for if not taken, a minimum of 750,000 mcf of gas during each accounting year thereafter during the term hereof for general municipal use and consumption in Buyer's power plants located at 5th and Avenue J and Municipal Hill. In the event any accounting year does not contain twelve (12) billing months, then Buyer shall be obligated to accept 1/12 of such volume for each complete billing month contained in such accounting year. Article 11, Quantity, Section 3, shall be amended to hereafter read as follows: ARTICLE II QUANTITY Section 3 In the event Buyer fails to take from Seller during any accounting year of the term hereof the minimum volume of gas which Buyer is obligated to take and pay for from Seller during such accounting year pursuant to the applicable provisions of Section 2A or 2B of this Article 11, then within ninety (90) days after the end of such accounting year when there is a deficiency in takes, Buyer shall pay Seller for that quantity of gas which equals the difference between the minimum volumes Buyer was obligated to take and pay for and the volume which Buyer did actually take and pay for. The price which Buyer shall pay Seller for such deficiency shall be the price in effect at the time the deficiency occurred. IV. Article VII, Price, Section 1, shall be deleted in its entirety and there is substituted therefor the following Article VII, Price, Section 1. ARTICLE VII PRICE Section 1. Commencing January 1, 1982, and continuing through December 31, 1983, Buyer shall pay Seller for gas delivered hereunder and measured as herein provided for a price to be the sume of: (1) Seller's weighted average cost of purchased gas as defined in Section 4 of this Article VII, plus (2) an increment of Fifty and Six Hundredths Cents (50.061) per mcf. Such price is subject to the adjustment as provided for in Section 3 of this Article VII. Except as hereby amended the original agreement dated December 14, 1979, as amended, shall continue in force and effect in accordance with its terms. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly executed on this the day and year first above written. ATTEST: i Assists Secret r Secretary ENERGAS COMPANY, A Division of Pioneer Corporation t BY: President BY. ayor Bill M440&- cAlister APPROVED AS TO CONTENT: 4-e-� Robert Masse , Dir ngaleec or of Finance APPROVED AS TO FORM: G ��� " 4, John C. Ross, Jr., City Attorney T Wastar Transmission Company P.O. Box 90 Amarillo. Texas 79189 806-373-6042 41 �dOV 2'-5198.1 r1;VA. A. nFIL, E City of Lubbock P. 0. Box 2000 Lubbock, Texas 79457 Attention Mr. Robert Massengale Gentlemen: RESOLUTION 987 - 12/10/81 Amends Reso. 366 —12/12/79 J. J. Heitz President November 24, 1981 Recent negotiations between Westar Transmission Company ("Westar") and the City of Lubbock ("City") have resulted in an amendment dated August 4, 1981 to our December 14, 1979 contract for natural gas sales to City. The amendment establishes a price for all natural gas delivered during the two year period commencing January 1, 1982 and ending December 31, 1983. During these negotiations the question arose as to how sales to City for use in its Holly Avenue electric generating plant could be exempt from the gross receipts tax provisions of TEX. TAX. GEN. ANN. Art. 11.03(1969). Accordingly, Westar and City have agreed as follows: Westar will, with the agreement and cooperation of City, seek a ruling from state taxing authorities and/or.court of competent jurisdiction concerning the obligation of Westar to continue collection and payment fo Art. 11.03 taxes on natural gas sales made to City for use in municipally owned electric generating plants. Westar and City have further agreed that if a final, non -appealable ruling is obtained which exempts such sales from the Art. 11.03 tax, then any resulting benefit will be passed on to City in the forst of a reduction in the price for gas as determined in Article VII, Section 1 of the August 4, 1981 contract amendment; provided, however, that in no event shall such price be reduced to less then the estimated effective price at the Southwestern Public Service Jones #1 and Jones #2 Plants, which is 49.250 per MCF. City of Lubbock November 24, 1981 Page 2 If this letter correctly states our agreement, please execute on behalf of City in the space provided below and return one executed copy of this letter agreement to us. Yours truly, WESTAR TRANSMISSION COMPANY AGREED to and ACCEPTED this 10th day of December , 1981. CITY OF LUBBOCK BY4ZcAlister , Mayor Westar Transmission Company P.O. Box 90 Amarillo. Texas 79189 SW373-6042 J Energas Company P.O. Box 40 Amarillo, Texas 79189 806-378-3300 November 24, 1981 City of Lubbock P. 0. Box 2000 Lubbock, Texas 79457 ENER&W. Attention: Mr. Robert Massengale Gentlemen: RESOLUTION 987 - 12/10/81 Amends Reso 366 - 12/12/79 Charles K. Vaughan President Recent negotiations between Energas Company ("Energas") and the City of Lubbock ("City") have resulted in an amendment dated August 4, 1981 to our December 14, 1979 contract for natural gas sales to City. The amendment establishes a price for all natural gas delivered during the two-year period commencing January 1, 1982 and ending December 31, 1983. During these negotiations the question arose as to how sales to City for use in its electric generating plants located. at 5th and Avenue J and at Municipal Hill in the City of Lubbock could be exempt from the gross receipts tax provisions of TEX. TAX. GEN. ANN. Art. 11.03 (1969). Accordingly, Energas and City have agreed as follows: Energas will, with the agreement and cooperation of City, seek a ruling from state taxing authorities and/or court of competent juris- diction concerning the obligation of Energas to continue collection and payment of Art. 11.03 taxes on natural gas sales made to City for use in municipally owned electric generating plants. Energas and City have further agreed that if a final, non -appealable ruling is obtained which exempts such sales from the Art. 11.03 tax, then any resulting benefit will be passed on to City in the form of a reduction in the price for gas as determined in Article VII, Section 1 of the August 4, 1981 contract amendment; provided, however, that in no event shall such price be reduced to less than the estimated effective price at the Southwestern Public Service Jones #1 and Jones #2 Plants, which effective price is 49.250 per MCF. r I :EWE N 0 V 2 71981 I (�rriCE 1 City of Lubbock November 24, 1981 Page 2 If this letter correctly states our agreement in the space provided below and return one executedpleaseoft on behalf City to us. copy of this letter agreement AGREED to and ACCEPTED this 10th day of Der mb_ , 1981. CITY OF LUBBOCK By Bill McAlister, Mayor Yours truly, ENERGAs COMPANY By ,� U Charles K. Vaughan, Pr sident TAProved as Jo form; uohn 8oss, Jr., City Attorney