HomeMy WebLinkAboutResolution - 2342 - Amendment To Agreement - Power Tex Joint Venture - Gas Fuel, Holly Ave Plant - 06_12_1986Resolution #2342
June 12, 1986
Agenda Item #27
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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 an Agreement
by and between the City of Lubbock and Power -Tex Joint Venture amending a
Gas Purchase Agreement dated March 8, 1984, covering the sale and purchase
of gas for the purpose of providing fuel for the generation of electricity
at Buyer's Holly Avenue Electric Generation Plant, 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 fully copied herein in detail.
Passed by the City Council this 12th day of June , 1986.
B. C. McMINN, MAYOR
ATTEST:
�I Ranett oyd, City
APPROVED AS TO CONTENT:
Robert Massengale, As istant City
Manager for Financial Services
APPROVED AS TO FORM:
uoriaio u. vanaiver,
City Attorney
Resolution #2342
AGREEMENT AMENDING
GAS PURCHASE AGREEMENT
DATED MARCH 8, 1984
THIS AGREEMENT, made and entered into this 12th day of
June , 1986, by and between the CITY OF LUBBOCK,
hereinafter referred to as "Buyer", and POWER—TEX JOINT VENTURE,
hereinafter referred to as "Seller".
W I T N E S S E T H
WHEREAS, Buyer and Seller entered into a Gas Purchase Agreement
dated March 8, 1984, hereinafter referred to as "said Agreement",
covering the sale and purchase of gas for the purpose of providing
fuel for the generation of electricity at Buyer's Holly Avenue
Electric Generation Plant; and
WHEREAS, Buyer and Seller desire to amend certain provisions of
said Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
mutually acknowledged, the parties hereto covenant and agree as
follows:
I.
Said Agreement is amended by deleting Article VII in its entirety
and substituting in lieu thereof the following:
"VII. PRICE AND BILLING
7.01 Commencing on June 1, 1986, and continuing through December 31,
1987, Buyer shall pay to Seller for all gas delivered hereunder each
month a price equal to $2.90 per MMBtu.
7.02 Commencing on January 1, 1988, and continuing for the remaining
term of said Agreement, Buyer shall pay to Seller for all gas
delivered hereunder each month a price equal to the sum of: (1)
Seller's Weighted Average Cost of Gas per MMBtu during such month,
(2) Seller's firm transportation fee of $0.49 per MMBtu, and (c)
$0.21 per MMBtu.
7.03 As used in this Article VII, "Seller's Weighted Average Cost of
Gas per MMBtu" shall be defined as the total amount of monies paid by
Seller to each supplier of gas in connection with gas purchased by
Seller from any source wherever located and delivered into Seller's
Power -Tex Transmission Line, or any lateral line connected thereto,
divided by the total number of MMBtu's contained in the gas so
purchased. As used herein, the term "total amount of monies paid"
shall include any third party transportation fees and all taxes,
except income taxes, paid by Seller in connection with a gas
purchase.
7.04 Commencing January 1, 1988, Buyer and Seller agree that
Buyer shall have the right to purchase all or a portion of its
natural gas requirements from third party suppliers provided that the
price Buyer pays to third party suppliers is less than the price
charged by Seller hereunder. Buyer and Seller further agree that in
the event Buyer purchases gas from third party suppliers, such gas
shall be transported to Buyer by Seller, and Buyer shall pay to
Seller a firm transportation fee of $0.49 per MMBtu for such
service. Buyer and Seller further agree that the quantities of gas
which Buyer is required to purchase from Seller during each
Accounting Period, pursuant to Paragraph 3.01 of Article III of said
Agreement, shall be reduced by an amount equal to the quantity of gas
purchased by Buyer from third party suppliers during each such
Accounting Period and transported to Buyer by Seller as provided in
this Paragraph 7.04.
7.05 On or about the tenth (loth) working day of each month, Seller
shall deliver to Buyer an invoice showing the quantity of gas
delivered to Buyer during the immediately preceding month and the
total amount due therefor. Invoices shall be due and payable on the
twentieth (20th) day of the month in which they are delivered to
Buyer unless such day falls on a Saturday, Sunday or generally
recognized holiday, in which case the invoice shall be due and
payable on the next succeeding business day. Buyer shall make
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payment, at Seller's option, either by mailing its check to any
address specified by Seller by first class United States mail,
postage prepaid, or by bank transfer of funds to a bank account to be
designated by Seller.
7.06 Commencing on January 1, 1987, and continuing for the remaining
term of said Agreement, Seller agrees to share with Buyer the before
tax net revenue of Seller which is attributable to Seller's Power -Tex
Transmission Line and all laterals connected thereto. On or about
the thirty-fifth (35th) day following January 31, 1987, and each
month thereafter, Seller shall submit to Buyer, by first class United
States mail, postage prepaid, a statement showing gross revenue,
total cost of gas, total operating expenses and before tax net
revenue along with Seller's check which represents seven and one-half
percent (7.5%) of before tax net revenue for such month. As used
herein, "before tax net revenue" shall mean Seller's gross revenue
less the sum of: (1) Seller's total cost of gas and (2) Seller's
total operating expenses. It is understood and agreed by and between
Buyer and Seller that Buyer shall neither own an interest in any
physical assets of Seller nor exercise any control over or in
relation to Seller's operations as a result of this Paragraph 7.06.
7.07 Each party hereto shall have the right to examine the books and
records of the other party at the offices where such records are kept
to the extent necessary to verify the accuracy of any statement,
charge, computation, or demand made under or pursuant to said
Agreement. Any statement shall be final as to both parties unless
questioned within two (2) years after payment thereof has been
made."
II.
Said Agreement is further amended by deleting Exhibit "A" in its
entirety.
MM
This Amendatory Agreement shall become effective on June 1, 1986
and shall be binding upon the parties hereto and upon their
respective successors, assigns, heirs, legal representatives,
administrators and executors. Except as amended herein, all other
terms and provisions of said Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in duplicate originals on the date first
hereinabove written. This Agreement may be executed in counterpart
and shall have the same effect as if all parties signing counterparts
had executed the same instrument.
"SELLER"
POWER-TEX JOINT VENTURE
B y :
D. B. Freeman
Witnes &) L•/ —�
-4-
"BUYER"
CITY OF LUBBOCK
B y : )5
B. C. McMinn, Mayor
Attest:',
6-
Ranette Boyd
City Secretary
Approved as to form:
By:
Do ald G. Vandiver
City Attorney
APPROVED AS TO CONTENT:
Robert Massengale, Assists City
P1anager for Financial Services