HomeMy WebLinkAboutResolution - 5789 - Accept Amendment To Agreement - WTMPA - Co-Generation Project, LP&L Plant 2 - 03_12_1998RESOLUTION NO.5789
Item #21
March 12, 1998
A RESOLUTION ratifying, confirming and approving the
City's prior approval of and agreement to
participate in a project to be undertaken by the
West Texas Municipal Power Agency; approving and
authorizing the execution of an Amended Power Sales
Contract; and resolving other matters incident and
related thereto.
WHEREAS, pursuant to Sections 13 (a) and 13(b) of the Power
Sales Contract by and between the West Texas Municipal Power Agency
(the "Agency") and the Cities of Lubbock, Tulia, Brownfield and
Floydada (the "Cities"), the City of Lubbock, Texas, received
written notice of Agency's intention to provide funds (through the
issuance of bonds) for new 40 megawatt co -generation project
involving the acquisition and installation of a single combustion
turbine with heat recovery steam generator located in the Lubbock
Power and Light Plant No. 2 (the "Project"), more specifically
described in Exhibit A attached hereto and incorporated herein by
reference as a part of this resolution for all purposes; and
WHEREAS, November 13, 1997, the City Council approved the
Project and agreed to participate therein; and
WHEREAS, the City Council hereby finds and determines that its
prior approval of, and agreement to participate in, the Project
should be ratified, confirmed and approved and an Amended Power
Sales Contract by and between the Agency and the Cities should be
approved and authorized to be executed; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK,
TEXAS:
SECTION 1: The City's prior approval of and agreement to
participate in the Project described in Exhibit A attached hereto
and incorporated herein by reference for all purposes to be
undertaken by Agency, which approval was given by the Council on
November 13, 1997, is hereby ratified and confirmed in all
respects, and the Agency is hereby authorized and directed to
proceed with the financing and construction of such Project with
the City of Lubbock's approval and participation as contemplated
and provided in the Power Sales Contract with said Agency.
SECTION 2: The Amended Power Sales Contract by and between
the Agency and the Cities, attached hereto as Exhibit B and
incorporated herein by reference as a part of this Resolution for
all purposes, is hereby approved as to form and content, and such
Contract in substantially the form and substance attached hereto is
hereby authorized to be executed by the Mayor and City Secretary
for and on behalf of the City and as the act and deed of the City
Council; and upon its execution by said officials, such Amended
0501369
Power Sales Agreement, dated as of July 1, 1995 and amended as of
April 1, 1998, shall be deemed and constitute the valid and
binding agreement by and between the Agency and the City with
respect to the purchase of power under such Agreement .
SECTION 3: It is officially found, determined, and
declared that the meeting at which this Resolution is adopted was
open to the public and public notice of the time, place, and
subject matter of the public business to be considered at such
meeting, including this Resolution, was given, all as required by
V.T.C.A., Government Code, Chapter 551, as amended.
SECTION 4: This Resolution shall be in force and effect
from and after its passage on the date shown below and it is so
resolved.
PASSED AND ADOPTED, this March 12, 1998.
ATTEST:
, 4-h�
City ecretary
0
(City Seal)
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ffiIBIT A
A. rROJECT DESCRIPTION
VnWA will be repowering existing steam units within Lubbock Power and Light's
&L) Plant No. 2. At present, two 22 MW units and two 11.5 MW Westinghouse non-
8
✓co exi easing units st at Plant No. 2 The repowering project will consist of the
addition a single combustion turbine with a heat recovery steam generator.
eombus� r me a7idFa-heat-recovery-$team generator may-ticndded-shortly afterthe
The design is to reoogaize this addition. Due to the need for this power, the first
combustion turbine may be operated in a simple cyda mode prior to the operation of the
project in a combined cycle mode. Project design shall be based upon operation of the
first combustion turbine in either simple cycle or combined cyde mode; using steam from
the Heat Recovery Steam generat= to Mower any of the eaasting steam turbines; and not
using the heat recovery steam generator during low loads or to aehicre, better heat rates.
All required facxlitics necessary to incorporate the proposed project into the existing
electrical system wM be considered part of the project including subst$tion expansion.
relaying and controls.
B. FYJI'd —RM
WTteA will be requesting tax exempt bonds in the approximate amount of $31,50Q000.
Of this amount, the equipment, construction and testing costa will be approximately
$29,000.000, and $3,500,000 will be used to set up a debt service revenue fund to reduce
bonding costs. Interest income on the reserve fund will o$>3et vtpftt interest costs_
Details of the expected project costs are shown in the attachment.
C. WThIPA COMI,ZPTMENi'TS
VMWA and each of its m=nber cities has a responsibility to meet the loads of its
customers. Due to limited transmission access into this region ofTexas, little if any power
can be transported to assist in meeting Bun = loads from outside this region. Within the
region, limited capacity makes it difficult to secure long-term needs. New capacity as
proposed by this project would provide the most efficient, environmentally acceptable, and
economical power available in this region.
'Cr c l ' _, r . ai
Over the expected 35 year life of the proposed project, we expect S336,219,965 in savir4p
as compared to buying the same capacity from others. This total amount is equdvalent to
$162,999,902 in today's present v&w cosu or an average present vahm savings of
$4,657,140 per year. These savings income as time passes. The eq*cted 1999 savLW
are approximately $2,000,000. Details of these savings are shown in the attachment.
The economics oftbis project are detailed in the attached modd oftUs project All major
assumptions arc shown. In the opinion of VnWA, the recommended project represents
the best and most reasonable sohnion to meeting our obligations to our Customers.
AMENDED
POWER SALES CONTRACT
BETWEEN
WEST TEXAS MUNICIPAL POWER AGENCY
AND
CITY OF BROWNFIELD, TEXAS
CITY OF FLOYDADA, TEXAS
CITY OF LUBBOCK, TEXAS
CITY OF TULIA, TEXAS
Dated: As of July 1, 1985
Amended: As of April 1, 1998
TABLE OF CONTENTS
Page
Section1:
Term of Contract . ....................................
1
Section 2:
Definitions ......:....................................
1
Section 3:
Sale and Purchase of Power and Energy .....................
5
Section 4:
Performance of Certain Services ...........................
6
Section 5:
Delivery of Power and Energy .............................
7
Section 6:
Annual System Budget ..................................
7
Section 7:
Rates and Charges .....................................
8
Section 8:
Meter Readings and Payment of Bills .......................
10
Section 9:
Meter Testing and Billing Adjustment .......................
10
Section 10:
Payments to Constitute Operating Expenses of City System ......
10
Section 11:
City Rate Covenant ....................................
10
Section 12:
Covenants of the Agency ................................
10
Section 13:
Project Approval and Rights of Cities When a Project is not
Approved..........................................
11
Section 14:
Debt Service Guarantee; Operating and Maintenance Expenses ...
13
Section 15:
Remedies in Event of Default .............................
14
Section 16:
Payment Due Dates and Delinquency ........................
15
Section 17:
Power Sales Contracts ..................................
16
Section 18:
Continuation of Services .................................
16
Section 19:
City Not to Sell its Electric System .........................
16
Section 20:
Assignment of Rights of a City .............................
16
Section 21:
Dissolution of the Agency ................................
16
Section 22:
Force Majeure........................................
17
Section23:
Insurance ............................................
17
Section24:
Reports ..............................................
18
Section 25:
Records and Accounts ...................................
18
Section 26:
Access ...............................................
18
Section 27:
Governmental Rates, Regulations and Laws ..................
18
Section28:
Easements ...........................................
18
Section29:
Notices .............................................
18
Section 30:
Severability..........................................
19
Section 31:
Entire Contract .......................................
19
Section 32:
No Waiver ........................................
19
Section 33:
Contracts to be Separate .................................
19
Exhibit.............................................. 22
Exhibit .............................................. 23
000i,ai/MM -2-
AMENDED
POWER SALES CONTRACT
BETWEEN
WEST TEXAS MUNICIPAL POWER AGENCY
AND
CITY OF BROWNFIELD, TEXAS
CITY OF FLOYDADA, TEXAS
CITY OF LUBBOCK, TEXAS
CITY OF TULIA, TEXAS
This Contract, made and entered into as of the 1st day of July, 1985 (but
effective on the date provided in Section 1 hereof), and amended as of the 1st day of
April, 1998, by and between the West Texas Municipal Power Agency, a municipal
corporation and political subdivision of the State of Texas, and the City of Brownfield,
the City of Floydada, the City of Lubbock, and the City of Tulia, each of which cities
is a municipal corporation of the State of Texas (herein collectively called "Cities" or
individually called "City").
WITNESSETH:
WHEREAS, each City has need for an economical, reliable source of Power and
Energy to meet the growing demands of its customers and has determined to purchase
such Power and Energy from the Agency; and
WHEREAS, the Agency proposes to construct or acquire electric generating
plants and transmission lines or to acquire ownership interests therein, and to purchase
or otherwise obtain Power and Energy for the purpose of supplying Power and Energy
to each City and others; and
WHEREAS, each City desires to purchase, and the Agency desires to sell, Power
and Energy on the terms and conditions herein set forth:
NOW THEREFORE, in consideration of the mutual undertakings herein
contained, the Agency and each City agree as follows:
Section 1: Term of Contract. This Contract, as amended, became effective upon
the delivery to the Agency of the proceeds of the West Texas Municipal Power Agency
Revenue Bonds, Series 1987, i.e, October 2, 1987. Subject to the provisions of Section
18 hereof, this Contract, as amended,] shall remain in effect for a period of the greater
of (i) thirty (30) years from April 1, 1998, or (ii) until such time as all of the Debts of
the Agency shall have been paid (or provision for such payment shall have been made).
Section 2: Definitions. As used herein:
(1) "Act" shall mean Chapter 166, Acts of the 63rd Legislature, Regular
Session, 1973, as amended by Chapter 143, Acts of the 64th Legislature, Regular
Session, 1975 and Chapter 405, Acts of the 66th Legislature, Regular Session,
1979; Article 717q, Vernon's Annotated Texas Civil Statutes, as amended by H.B.
o5o14BUM9W
-1-
903, Acts of the 69th Legislature, Regular Session, 1985; and all laws
amendatory or supplemental to any of the foregoing.
(2) "Agency" shall mean the West Texas Municipal Power Agency as
created and established (pursuant to the Act) by concurrent ordinances adopted
by the governing bodies of the Cities, or its successor.
(3) "Annual System Costs" shall mean, with respect to a Contract Year,
and to the extent not paid or to be paid from the proceeds of Bonds or other
funds legally available to the Agency, all costs and expenses of the Agency that
are paid or incurred during such Contract Year and are allocable to the System,
including, but not limited to the payment of the Operating and Maintenance
Expenses of the System, all costs, charges, and expenses of replacements and
renewals of the System and all taxes, assessments or other governmental charges
lawfully imposed on the Agency or on the revenues of the System or payments
in lieu thereof, and the deposit or payment of any and all amounts which the
Agency may now and hereafter become obligated to deposit into any fund or pay
from revenues of the System, by law, contract, or any Bond Resolution.
(4) "Annual System Budget" shall mean, with respect to a Contract
Year, the budget of the Agency prepared in accordance with Section 6 hereof for
such Contract Year or, in the case of an amended Annual System Budget, for the
remainder of such Contract Year.
(5) "Approved Project" shall mean the Initial Project and any Project
which has been approved by all of the Cities and the Agency pursuant to Section
13 of this Contract.
(6) "Bonds" shall mean collectively the Series 1998 Bonds and
Additional Bonds issued by the Agency pursuant to the Bond Resolution.
(7) "Bond Resolution" shall mean the resolution authorizing the
issuance of the "West Texas Municipal Power Agency Revenue Bonds, Series
1998, "and any resolution subsequently adopted by the Agency which authorizes
the issuance of Additional Bonds, including refunding Bonds, on a parity with
the said Series 1998 Bonds. Subject to the provisions of paragraph (e) of Section
14, in the event a City disapproves a Project (pursuant to Section 13 hereof)
obligations thereafter issued shall not be on a parity with the Series 1998 Bonds,
and such obligations, if any, shall not be deemed to have been issued pursuant
to the Bond Resolution.
(8) "Contract Year" shall mean the fiscal year of the Agency as from
time to time determined by the Agency; provided, however, the first Contract
Year of the Agency shall begin on the effective date of this Contract and shall
end on the last day of the fiscal year of the Agency within which this Contract
becomes effective.
(9) "Debts" shall mean Bonds and Subordinated Indebtedness, as
0ao148ver3990 -2- ff 13
defined in the Bond Resolution, together with interest thereon, and redemption
premiums, if any.
(10) "Debt Service" or "Debt Service Requirements" shall mean, with
respect to any period, the net aggregate of the amounts required to be paid
during said period on any Debts outstanding as the same shall become due.
(11) "Development Project" shall mean anyone or more of the following:
(i) repairs, replacements, or modifications to an existing generating or
transmission facility owned in whole or in part by the Agency, and which are
designed to increase or maintain an operating efficiency of the facility or (ii)
preliminary and developmental work to determine whether any work should be
undertaken as a Project, or engineering, legal, and financial studies in connection
with the planning, development or utilization of power resources, or (iii) the
acquisition or development (either or both) of a fuel supply or supplies in order
to provide fuel for generating facilities which are then owned by the Agency or
in the process of being constructed for or on behalf of or for the use of the
Agency with respect to an Approved Project that is part of the System; or (iv)
any purpose for which proceeds of Bonds may by expended under the Act, except
a Project. The Agency may issue Bonds (in a separate series or combined with
Bonds being issued for other purposes) to provide funds for a Development
Project upon compliance with the provisions for the issuance of Bonds as set
forth in the Bond Resolution, but the approval of the Cities, pursuant to Section
13 hereof, shall not be required.
(12) "Effective Date of Disapproval" shall mean the 90th calendar day
following action by the governing body of a City which disapproves a Project
submitted to such City pursuant to Section 13 hereof.
(13) "Energy' shall mean kilowatt-hours (kwh).
(14) "Initial Project" shall mean the 40 megawatt co -generation project
approved by the Agency on September 18, 1997, involving the acquisition and
installation of a single combustion turbine with heat recovery steam generator
at Lubbock Power and Light's Plant No. 2, and the facilities necessary to
incorporate such generation facilities into the electrical system to serve] the
Cities.
(15) "Net Energy Received From Others" shall mean the total amount
of Energy supplied at the Points of Delivery by utilities other than the City's
utility, less PURPA Purchases.
(16) "Operating and Maintenance Expenses" shall mean all expenses
incurred in the operation and maintenance of the System and the Agency which
are properly accounted for such purposes under the Uniform System of Accounts.
Such term does not include depreciation or obsolescence charges or reserves
therefor, interest charges and charges for the payment of principal, or
amortization, of Bonds or other indebtedness of the Agency.
EXMff B
(17) "Points of Delivery" shall mean the points on the System of, or
available, to the Agency, as determined from time to time by the Agency and the
City concerned, at which Power and Energy are made available to a City
pursuant to this Contract. Such Points of Delivery shall be attached hereto as
Exhibit A, and a change therein, approved by the Agency and the City affected,
shall not be considered as an amendment to this Contract.
(18) "Power" shall mean kilowatts (kw).
(19) "Project" shall mean one or more of the following: (i) any power
generating facility (or interest therein) to be constructed or acquired by the
Agency, including but not limited to the Initial Project, as well as fuel therefor,
(ii) any transmission facility required to connect or interconnect such facilities
with a City or Cities or others, or (iii) any addition or improvement to a power
generating or transmission facility which is to be owned, in whole or in part, by
the Agency, or (iv) any contract right of the Agency to purchase or receive a
power supply or transmission capacity (a) by the making of a prepayment of
capital costs which are associated with the supply of capacity so purchased, or
(b) the execution of a take or pay contract having a duration of more than 10
years, including any renewals thereof, or (c) the execution of a contract to
purchase Power or Energy (either or both) by the Agency on an all requirements
basis. The term does not include any facility financed with the proceeds of
Special Contract Obligations as permitted under and defined in the Bond
Resolution.
(20) "PURPA Purchases" shall mean the total amount of Energy
required to be purchased by a City from a small power production facility, a
co -generation facility or other facility pursuant to the Public Utility Regulatory
Policies Act of 1978.
(21) "Rated Capacity' shall mean the maximum load expressed in net
kilowatts (kw) that a generating source (as identified in the definition of Project)
is capable of supplying under good operating conditions.
(22) "Series 1998 Bonds" shall mean the "West Texas Municipal
Power Agency Bonds, Series 1998", dated April 1, 1998.
(23) "System" shall mean the Agency's interest in all properties (owned
or operated by or on behalf of the Agency) which are financed, in whole or in
part, through the issuance of obligations by the Agency for Approved Projects,
System Development and Reliability Expenditures, and Development Projects.
The term also includes any contract for providing services or Power and Energy,
either or both. The initial System is hereby designated as System A. The term
does not include the Agency's interest in any facility financed with the proceeds
of Special Contract Obligations issued by the Agency as permitted under and
defined in the Bond Resolution.
(24) "System A" shall mean the (i) Development Projects, (ii) any
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reports, studies or documents prepared for the use of the Agency, and (iii) the
Initial Project and any facilities hereafter acquired or constructed by the Agency
by reason of an Approved Project.
(25) "System Development and Reliability Expenditures" means those
expenditures which the Agency determines, under prudent utility practices,
should be expended over a given period of time for (i) transmission and related
facilities to increase the reliability of the delivery of Power and Energy by the
Agency or (ii) repairs, replacements or modifications to an existing generating
facility (owned in whole or in part by the Agency or under construction by it)
which are designed to increase the Rated Capacity of such generating facility.
Such expenditures which are to be paid from the proceeds of a series of Bonds
shall be considered a single Project.
(26) "Uniform System of Accounts" and all other accounting methods
and terminology contained or referred to in this Section or elsewhere in this
contract means accounting principles, methods and terminology followed and
construed, as nearly as practicable, in conformity with the Uniform System of
Accounts for Class A and Class B Public Utilities and Licensees and accounting
rules and regulations thereunder prescribed by the Federal Energy Regulatory
Commission for privately owned power companies which are subject to its
jurisdiction and engaged in business comparable to the business of the Agency,
as amended from time to time, or such other system as may be required by any
regulatory agency.
Section 3: Sale and Purchase of Power and Energy. (a) Each City during the
time this Section is applicable shall:
(1) subject to existing contracts (or extensions thereof, if the Agency
is a party to such extension agreement), purchase and receive from the Agency
all Power and Energy which it shall require for the operation of its electric
system in excess of the amount (i) supplied by any generation and transmission
facilities owned by it on April 1, 1998, including generating and transmission
facilities under construction on such date, and improvement or extensions of
generating facilities which increase the Rated Capacity of same provided the
increase during any period of two successive Contract Years does not exceed 10%
of City's generating facilities' Rated Capacity at the beginning of such period;
and] provided further the Cities and the Agency may, in writing, waive such 10%
limit, and (ii) supplied from any generation facility primarily fueled from any
renewable source (i.e., wind, solar, solid waste, etc.); and
(2) binds itself to pay for all Power and Energy purchased or otherwise
acquired by it from the Agency pursuant to this Section 3 at the rates and
charges established pursuant to Section 7 of this Contract.
The foregoing provisions of this Subsection (a) shall have no application to the
purchase or exchange of Power or Energy (i) on an emergency, maintenance, or
stand-by basis or (ii) on the basis of economic dispatch between the Cities and another,
OW14819 3M -5-
or any one or more of such entities, or any combination thereof, and the Agency.
(b) In the event the Agency is not able to supply Power and Energy required
or requested under its power sales contracts, the Agency shall allocate its available
Power and Energy monthly among (i) the Cities pro rata in accordance with their
respective amounts of Net Energy Received From Others during the corresponding
month of the preceding Contract Year unless a governmental agency requires a
different allocation and (ii) other power purchasers as may be provided by contract.
The Agency shall devote its best efforts to the acquisition, by purchase or otherwise,
of the Power and Energy required to meet the requirements of its power sales
contracts. During the period the Agency is unable to supply Power and Energy
required or requested under its power sales contracts, so that an allocation of Power
and Energy is made, the Cities shall be permitted (during such period) to purchase only
such amounts of Power and Energy as are not supplied by the Agency.
(c) The provisions of this Section do not apply to any City from and after the
Effective Date of Disapproval.
Section 4: Performance of Certain Services. (a) In addition to the delivery of
Power and Energy hereunder and the performance of all acts and actions incident
thereto, the Agency agrees, to the extent not performed pursuant to or as a
consequence of any other Section of this Contract, to perform or cause to be performed,
in a prudent and economical manner the following services concerning the interrelated
activities of the Agency, the Cities and others, as well as various combinations of such
parties:
(1) comprehensive planning for Power and Energy and the
transmission thereof to mutually agreed upon load centers;
(2) undertake or coordinate and monitor the design, construction and
operation of joint facilities;
(3) plan for and undertake or coordinate and monitor the economic
dispatching of Power and Energy of the System and the systems of the Cities
and other entities (to the extent permitted by contract) to which such systems
are interconnected, pursuant to subsequent agreement(s) between the Cities, the
Agency and any other entity;
(4) provide accounting and cost allocation services; and
(5) provide such other services as the Agency and a City, from time to
time, shall determine to be appropriate and necessary.
(b) Each City hereby binds itself to pay for the cost of the services provided
by the Agency pursuant to Subsection (a) of this Section 4 at the rates and charges
established pursuant to Section 7 of this Contract.
(c) In the event electric power is required to be purchased (pursuant to the
OW148LV39W -6-
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Public Utility Regulatory Policies Act of 1978 or other provisions of law) from a small
power production facility, a co -generation facility or other facility, each City and the
Agency shall use their best efforts to arrange for such purchases to be made by the
Agency. If such arrangements cannot be made, then each City shall make the required
purchases and sell the power purchases to the Agency. Each City appoints the Agency
to act as its agent in all dealings with the owner of any such facility from which power
is to be purchased and in connection with all other matters relating to such purchases.
Section 5: Delivery of Power and Energy. (a) The Power and Energy to be
furnished under this Contract shall be alternating current, sixty (60) hertz, three-phase,
subject to conditions of delivery and measurement as hereinafter provided.
(b) The Points of Delivery, delivery voltage and other conditions of service
shall be in accordance with the service specification set forth in Exhibit A attached to
this Contract, as amended by the Agency and the City affected by the amendment from
time to time.
(c) Each City shall make and pay for all connections between its facilities and
the Agency's System at the Points of Delivery. Each City shall install, own and
maintain any necessary substation equipment at the Points of Delivery from the
Agency's System and shall install, own and maintain switching and protective
equipment of adequate design and sufficient capacity beyond such Points of Delivery
to enable the City to take and use the Power and Energy supplied under this Contract
without hazard to the System. In the event the Points of Delivery set forth in Exhibit
A are not on a City's electric system, such City shall arrange for transmission of Power
and Energy sold under this Contract to its electric system, including the installation
and maintenance of any facilities required to receive such Power and Energy into such
City's electric system.
(d) Except as otherwise agreed, metering equipment shall be furnished,
installed and maintained by the Agency at each Point of Delivery to each City at the
low voltage side of the transforming equipment maintained at such location. Loss
adjustments for low voltage side or remote metering shall be as specified in said Exhibit
A or as otherwise agreed by the parties.
Section 6: Annual Sygtem Budget. (a) Except as provided in paragraph (e) of this
Section, the Agency shall prepare or cause to be prepared an Annual System Budget at
least ninety (90) days prior to the beginning of each Contract Year which Annual
System Budget shall itemize estimates of Annual System Costs and all revenue, income
or other funds to be applied to such Annual System Costs for and applicable to such
Contract Year. Such Annual System Budget shall also utilize and take into account
forecasts, which shall be furnished by each City to the Agency at least one hundred
twenty (120) days prior to the beginning of such Contract Year, of the monthly peak
Power and Energy requirements estimated to be obtained from the Agency during such
Contract Year.
(b) After consideration of any comments of the Cities, the Agency, not less
than thirty (30) days prior to the beginning of such Contract Year, shall adopt an
OW148LW39N -7-
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Annual System Budget for such Contract Year and the rates and charges for Power and
Energy to be furnished and the services to be performed during such Contract Year and
shall cause copies of such Annual System Budget and rates and charges to be delivered
to the Cities. Provided, however, the Annual System Budget for the first Contract Year
shall be prepared and adopted as provided in paragraph (e) of this Section.
(c) If, at any time or from time to time after the adoption of the Annual
System Budget in accordance with Subsection (b) of this Section 6, the Agency
estimates that the Annual System Costs or revenues for the Contract Year or any part
thereof for which such Annual System Budget applies will be greater or less than the
Annual System Costs or revenues set forth in the Annual System Budget, or that the
amount of Power and Energy which the Agency expects to deliver during such Contract
Year or any part thereof is greater or less than the amount of Power and Energy which
the Agency estimated at the time of adoption of the Annual System Budget would have
been delivered during such Contract Year, then the Agency may prepare an amended
Annual System Budget. The amended Annual System Budget shall be timely adopted
by the Agency and transmitted to the Cities.
(d) In the event a budget for the ensuing Contract Year has not been adopted
on or before the first day of the Contract Year, the total amount budgeted for the
preceding Contract Year shall be the total amount of the temporary budget for such
purposes for the ensuing Contract Year. The temporary budget shall be effective only
until such time as a permanent budget has been finally adopted and approved.
The chief administrative officer of the Agency shall be responsible for the
allocation for expenditure of the total amount of the temporary budget until a
permanent budget is adopted and approved.
(e) The initial Annual System Budget under this Contract shall be the Annual
System Budget adopted by the Agency at a meeting of the Board of Directors of the
Agency.
Section 7: Rates and Charges: (a) The rates and charges of the Agency to the
Cities for Power and Energy and for services supplied shall be:
(1) non-discriminatory, and
(2) fair and reasonable, and be based upon the cost of providing the
Power and Energy or providing the service with respect to which the rate or
charge is based, and
(3) adequate (after taking into consideration other moneys received or
anticipated to be received) in each Contract Year to pay or make provisions for
paying Annual System Costs.
(b) When the Board of Directors proposes to establish a new rate or charge,
as determined under Schedule B, the Agency shall give each City written notice that
it proposes to establish a new rate or charge for Power and Energy or for services
OW148i WMM -8-
(setting forth such charge) on a date certain (which shall not be less than 120 days
from the date of mailing of the notice to each City and all such notices are to be mailed
simultaneously). Except as provided in paragraph (c) hereof, no charge or adjustment
in any rate or charge made by the Agency shall be effective if any City, by resolution
or ordinance of its governing body, enters an objection to such adjustment in a rate or
charge by causing to be filed with the chief administrative officer of the Agency a copy
of such resolution or ordinance more than 90 days prior to the suggested effective date
of the proposed new rate or charge. In the event a City enters an objection to the
charge or adjustment in a rate or charge and such objection is not withdrawn by the
City objecting within 60 days of the proposed effective date of such change, the effective
date of the charge or adjustment shall be postponed pending the resolution of the
dispute in the following manner:
(1) the Cities may jointly select an independent consultant or
consultants to prepare a rate evaluation and schedule of proposed rates and
charges, provided if such joint selection is not made within 30 calendar days of
the filing of an objection (evidenced by the passage of a resolution or ordinance)
such independent consultant shall be appointed by the Board of Directors of the
Agency;
(2) the report of the independent consultant shall be submitted to the
Agency and each City for consideration; and
(3) if the report of the independent consultant is approved by the
governing bodies of the Agency and the Cities, the same shall be effective as of
the date originally suggested by the Agency in its notice. If the adjustment is not
approved or an agreement reached within 15 days after the receipt of the report
of the independent consultant, then the Agency and the Cities shall each have
all of the rights and remedies at law and in equity except that in no event shall
any City be relieved of its obligation to the holders of Bonds under Section 13
or 14 of this Contract.
(c) The Board of Directors of the Agency may change or adjust any rate or
charge for Power and Energy or for services supplied to a City, if such Board
determines (i) an emergency exists and (ii) the emergency adjustment meets the criteria
established in paragraph (a) of this Section. The emergency adjustment shall be
effective for a period of 180 days (unless the notice from the Agency specifies a lesser
period) and shall be effective 30 days after the mailing of notice to the Cities (all of
which notices shall be mailed simultaneously).
Section 8: Meter Readings and Payment of Bills. The Agency shall read meters
or cause meters to be read monthly and bill on a monthly basis each City for Power and
Energy furnished under this Contract. It shall also bill on a monthly basis each City
for services rendered pursuant to Section 4 of this Contract.
Section 9: Meter Testing and Billing Adjustment. The Agency shall test and
calibrate meters or cause meters to be tested and calibrated by comparison with
accurate standards at intervals of twelve (12) months, or such other intervals as the
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parties agree. The Agency shall also make or cause to be made special meter tests at
any time at a City's request. The costs of all tests shall be borne by the Agency,
provided, however, that if any special meter test made at a City's request shall disclose
that the meters are recording accurately, the requesting City shall reimburse the
Agency for the cost of such test. Meters registered not more than 1/2 of 1% above or
below normal shall be deemed to be accurate. The readings on any meter which shall
have been disclosed by test to be inaccurate shall be corrected from the beginning of the
monthly billing period immediately preceding the billing period during which the tests
are made in accordance with the percentage of inaccuracy found by such test, provided,
that no correction shall be made for a longer period unless the Agency and City
involved mutually agree thereto. Should any meter fail to register, the Power and
Energy delivered during such period of failure shall, for billing purposes, be estimated
by the Agency and the City from the best information available. The Agency shall
notify the City or cause the City to be notified in advance of the time of any meter
reading or test so that the City's representative may be present at such meter reading
or test.
Section 10: Pavments to Constitute Operating Expenses of City System. Each
City's obligation to make the payments under this Contract shall constitute an
operating expense of its electric system payable solely from the revenues and receipts
of such electric system. Each City shall be bound and obligated to make such payments
and the obligation to make the payments under Section 14 of this contract shall be
unconditional.
Section 11: City Rate Covenant. Each City shall establish, maintain and collect
rates and charges for the electric service of its electric system which shall produce
revenues at least sufficient, together with other revenues available to such electric
system and available electric system reserves, to pay to the Agency, when due, all
amounts payable by such City under this Contract.
Section 12: Covenants of the Agency. (a) After first satisfying the Power and
Energy requirements of the Cities, as such requirements are established from time to
time, and the requirements of other power purchasers, the Agency shall use it best
efforts to market and dispose of any and all surplus Power and Energy available from
the System or which the Agency is obligated by contract to purchase or otherwise
acquire, and which is in excess of the requirements of all Cities and other power
purchasers, upon the most economically advantageous terms and conditions obtainable,
to the extent that it may legally do so.
(b) The Agency shall use reasonable diligence to provide a constant and
uninterrupted supply of Power and Energy hereunder. If the supply of Power and
Energy shall fail, or be interrupted, or become defective by reason of force majeure as
hereinafter provided, the Agency shall not be liable therefor or for damages caused
thereby.
(c) The Agency shall diligently enforce and take all reasonable steps, actions
and proceedings necessary for the enforcement of all terms, covenants and provisions
of any power sales contracts. The Agency shall not amend this Contract without first
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having secured the prior written consent of all Cities, but no amendment shall be made
in Section 14 of this Contract.
(d) The Agency covenants and agrees that it will operate, maintain and
manage its System or cause the same to be operated, maintained and managed in an
efficient and economical manner, consistent with sound utility practice and in
accordance with standards normally used by utilities owning like properties.
(e) The Agency covenants that it will not make a change in any Bond
Resolution so as to create additional Funds (except those now established by the
resolution authorizing the issuance of the Series 1998 Bonds) without the approval of
such changes by the governing body of each City, nor shall any change be made in the
amounts required to be paid into, accumulated in or maintained in the Bond Fund or
Reserve Fund, except as provided in the resolution authorizing the Series 1998 Bonds,
without such approval.
Section 13: Project Approval and Rights of Cities When a Project is not
Approved. (a) Except as provided in paragraph (g) of this Section, prior to the issuance
and sale of Bonds to provide money for each Project, the Agency shall submit a written
notice to each City as required by the provisions of paragraph (b) of this Section. If a
Project has been approved pursuant to paragraph (c) of this Section, the Agency may
thereafter issue, sell and deliver Bonds in order to fully provide funds for such Project,
including the design, construction, and the placing of same in commercial operation, or
to meet any requirement of law, including those of a regulatory agency having
jurisdiction, or to pay judgment or casualty losses not covered by insurance, or to meet
a safety requirement or overriding public necessity.
(b) A written notice of the Agency's intention to provide funds (through the
issuance of Bonds) for a Project shall contain a general description of the Project, the
projected sources and uses of funds for all aspects of the construction and testing of the
Project, and a statement to the effect that, in the opinion of the Agency, the Project is
necessary for the Agency to meet its commitments under power sales contracts and is
economically feasible, together with an explanation of the Agency's basis for this
opinion. Within 60 days after receipt of such notice, each City shall give the Agency
written notice of its approval or disapproval of the Project. If a City fails to give the
Agency such written notice within such 60-day period, then said City shall be deemed
to have approved the Project.
(c) If all of the Cities (who have approved all previously Approved Projects)
approve a Project, then the Agency may proceed with the issuance, sale and delivery
of Bonds to provide such Project. If one or more of such Cities should disapprove the
Project, then the Agency shall give each such City written notice which of the Cities
approved the Project and which of the Cities disapproved the Project. Any of the Cities
who approved the Project may then give the Agency written notice of its or their desire
that the design and construction of the Project be commenced; and, if the Agency
determines that the Project is still feasible, it may proceed with the issuance, sale and
delivery of such Bonds, but any City which failed to initially approve such Project shall
have elected to limit its responsibilities to System A under this Contract unless it
oao143LW3 so -11-
W, . I 11
approves the Project under paragraph (f) of this Section.
(d) If any City disapproves a Project, such City, during the balance of the term
of this Contract:
(1) shall no longer be subject to purchase and receive all of its Power
and Energy requirements from the Agency;
(2) shall, in each calendar month during the remaining term of this
Contract, take or pay for an amount of Power and Energy equal to the amount
of Power and Energy purchased by such City from the Agency during the
corresponding month of the 12 consecutive months' period preceding the
calendar month of the Effective Date of Disapproval, or such other amount of
Power and Energy as may be from time to time agreed upon by the City, the
Agency and the other Cities; and the Agency shall no longer be required to
provide any Power and Energy in excess of such amount. The Power and
Energy furnished to such City shall be billed by the Agency at rates and charges
as from time to time adopted pursuant to Section 7 of this Contract. The
calculation of limiting City's obligation under Section 14 of this Contract shall
assume that such City's Net Energy Received From Others for the purposes of
said calculations is equal to such City's Net Energy Received From Others in the
completed Contract Year next preceding the Effective Date of Disapproval.
(e) Following the Effective Date of Disapproval, as to the City which
disapproved a Project:
(1) The right to schedule Power and Energy is subject to outages for
maintenance and operating emergencies.
(2) The City shall not thereafter be entitled to approve or disapprove
any subsequent Projects, provided the Agency and all of the Cities which have
not disapproved a Project may allow a City to thereafter approve a Project.
(3) Amounts due from entities other than the Cities shall be taken into
account in calculating the amount due from the Cities.
(f) After a City has disapproved a Project under paragraph (c) of this Section,
it may thereafter revoke such action and approve the Project provided:
(1) the Agency and each of the Cities approve the revocation, and
(2) in order to pay a pro rata part of expenses incurred (including Debt
Service) since the Project was disapproved, the City agrees to assume or pay
such amount as may be determined by the Agency and the Cities.
Section 14: Debt Service Guarantee: Operating and Maintenance Expenses. (a)
In any instance where the amount of money on deposit in the Bond Fund (created by
the Bond Resolution) is not the full amount then required to be on deposit therein,
OW14E1/ 39N
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without giving consideration to transfers made from other than the Revenue Fund or
from Bond proceeds (provided that transfers may be made from the Reserve Fund to
the Bond Fund for not more than two (2) consecutive calendar months), each City shall
be obligated to make a payment, the aggregate amount of which shall be the amounts
that are necessary to establish or reestablish the amount then required, under the
terms of the Bond Resolution, to be on deposit in the Bond Fund, the Reserve Fund,
and the Contingency Fund. The percentage share of the payment to be made by each
City, based on data for the 12 consecutive months' period ending September 30, 1997,
would be as follows:
City of Brownfield, Texas: ...................... 8.97%
City of Floydada, Texas: ........................ 2.10%
City of Lubbock, Texas: ........................ 85.21%
City of Tulia, Texas: ........................... 3.72%
Except as set forth in Section 13(d), such percentage share of the payment to be
made by each City shall be adjusted at the beginning of each Contract Year. Such
adjustment shall be made by calculating the percentage relationship that each City's
Net Energy Received From Others for the Contract Year immediately preceding the
Contract Year in which the adjustment is being made bears to the total aggregate Net
Energy Received From Others of all Cities for such Contract Year, and the sum of the
adjusted percentages shall equal 100%.
The payments required to be made to said Bond Fund or Reserve Fund (any one
or all of such Funds) shall be paid by the Cities in the percentage share determined
above and such payments shall be made direct to the custodian of the respective Funds
as established in the Bond Resolution. Each City unconditionally covenants the
payment will be made, if required, in the amount and in the manner prescribed. The
provisions of this covenant are for the benefit and protection of the Agency, the Cities
and the owners and holders of Bonds, it being recognized that the holders of such
Bonds shall be third -party beneficiaries of this covenant, and it is understood by the
contracting parties that the purchaser of Bonds has and will agree to the purchase of
Bonds conditioned upon this covenant.
(b) In any instance in which the funds of the Agency are insufficient to pay
Operating and Maintenance expenses or other expenses (except those for which
provision is made in paragraph (a) hereof), payments shall be paid to the Agency by the
Cities in the percentage share determined under paragraph (a) of this Section 14.
(c) A new power purchaser (with the approval of the Agency and the Cities)
may assume primary liability for the obligation to make payments under this Section
with respect to Debts of the Agency incurred prior to its becoming a power purchaser,
but the same shall not discharge the liability of those who were obligated when such
Debts were incurred (who shall remain secondarily liable).
(d) In the event the Agency is held to be in default under the provisions of the
Bond Resolution (by reason of the inadequacy of payments required to be made by the
Cities under the provisions of this Contract), the Cities shall cure the default by making
OW14SvMM -13-
payments in the same proportion as provided in paragraph (a) of this Section.
(e) In the event a City disapproves a Project under Section 13, then each City
shall continue to be obligated under paragraph (a) of this Section with respect to (i)
Bonds theretofore issued and Bonds thereafter issued to fully provide funds for each
Project [as contemplated by the second sentence of Section 13(a)], and (ii) Bonds
thereafter issued for Development Projects described in clauses (i) and (iii) of the
definition of that term.
For and in consideration of the payments to be made by the Cities under this
Contract (including those under this Section) the Agency agrees to use its best efforts
to deliver Power and Energy from Projects, to such Cities, under the terms of this
Contract, and such payments by the Cities shall be in consideration for the Agency's
agreement to deliver such Power and Energy; but the failure of the Agency to comply
with such agreement shall not relieve any City of its obligations under paragraph (a)
(b) or (d) of this Section, which obligations shall be unconditional and absolute.
Section 15: Remedies in Event of Default. (a) If any City
(1) fails or defaults in meeting the terms, conditions and covenants
of this contract [other than a default in payment for which provision is
made in subparagh (2) of this subsection (a) and such default continues
for a period. of 15 days, the Agency shall give notice (in the manner
contemplated by Section 29 of this Contract) to the Cities, and such
defaulting City shall from the date of the mailing of such notice, have a
period of 30 days to cure the default; or
(2) fails to make any payment (hereinafter called a default in payment) to
the Agency that is required to be made under the provisions of this Contract,
and such default in payment continues for a period of fifteen (15) days, the
Agency shall give notice (in the manner contemplated by Section 29 of this
Contract) to the Cities, and the defaulting City shall, from the date of the
mailing of such notice, have a period of thirty (30) days to pay the full amount
then due to the Agency, together with interest thereon, as hereinafter provided.
If a City does not cure its default within such period of thirty (30) days, then, so
long as such City remains in default, and in addition to any other rights which the
Agency has under this Contract and at law and in equity, the Agency may terminate
all service to such City. Additionally, in the event of default in payment, the Agency
may charge to and collect from such City each calendar month the amount which the
Agency determines to be the difference between what the Agency would have received
from such City under this Contract for Power and Energy and Services furnished and
delivered to such City, had such City not been in default, and the amount, if any, which
the Agency receives from sales of such Power and Energy and services to the other
Cities, or others, either or both. Termination of service hereunder shall not reduce or
change the obligation of the defaulting City under the other provisions of this Contract.
(b) If the Agency fails or defaults in meeting the terms, conditions and
ON148UB UW
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covenants of this Contract, except its covenant to use reasonable diligence to provide
a constant and uninterrupted supply of Power and Energy contained in Section 12(b),
and such default continues for a period of 15 days after a City has given the Agency
notice of such default in the manner contemplated in Section 29 of this Contract, then
such City shall have all of the rights and remedies provided at law and in equity, except
that in no event shall any of the Cities be relieved of its obligation specified in Section
14. The delivery of available Power and Energy as provided in this Contract shall be
a ministerial duty of the Agency.
Section 16: Payment Due Dates and Delinguencv. (a) In the event that a City
fails to make any payment at the time herein specified, interest on such delinquent
amount shall accrue at the rate of ten percent (10%) per annum from the date such
payment becomes due until paid in full, and the Agency may institute a proceeding for
a mandatory injunction requiring the payment of the amount due and interest thereon,
such action to be instituted in a court of competent jurisdiction.
(b) All payments required to be made by the Cities under the terms of this
Contract shall be due and payable within fifteen (15) days following the date the
Agency renders the bill, and the Cities shall have no right of setoff, recoupment or
counterclaim against any payment under Section 14 of this Contract, or any funds
established for the payment and security of Subordinated Indebtedness (as defined in
the Bond Resolution), which are unconditional.
(c) Should a dispute as between any City and the Agency arise as to whether
the Agency is in compliance with its covenants as contained herein, each City shall
nevertheless be obligated (1) to make the payments provided by paragraph (a) of
Section 14 hereof and (2) to pay such amount of the Annual System Costs as may not
be in dispute pending the resolution of such dispute, provided a City may elect to pay
all such Annual System Costs, including any disputed amount. In the event a disputed
amount of Annual System Costs is paid by a City the same shall be placed in escrow
in an interest bearing account by the Agency pending resolution of the dispute, but only
the principal amount thereof shall be returned to the City. If the City elects not to pay
the amount in dispute and the dispute is resolved against such City, the amount
ultimately found to be due plus interest at 10% per annum (calculated from the date
the same was originally due) shall be paid by the City within 15 days of the resolution
of the controversy. Attorneys' fees shall be assessed as court costs.
Section 17: Power Sales Contracts. The Agency may provide Power and Energy
and Services pursuant to a power sales contract, upon such terms as may be approved
by the governing body of the Agency and, except as provided by Section 12(a), the
Cities.
Section 18: Continuation of Services. A City, except as limited by Section 13,
shall have the right to the continued performance of services provided under the
provisions of this Contract for the useful life of the System by giving written notice to
the Agency at least five years prior to the scheduled termination of this Contract (as
specified in Section 1), provided that if such termination is occasioned by making
provision for the payment of the Debts of the Agency, the notice may be given within
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90 days of such provision being made. Such City shall be obligated to continue paying
its proportionate share of the Annual System Costs.
Section 19: City Not to Sell its Electric System. Each City covenants that
during the term of this Contract (or the extensions thereof) it will not sell or otherwise
dispose of its electric utility distribution system in whole or substantially as a whole to
any entity other than an assignee under Section 20 of this Contract and, in the case of
such an assignee, only with the written consent of the Agency and all Cities.
Section 20: Assignment of Rights of a City. A City may assign any of its rights
under this Contract to another entity, if permitted by applicable law, but no sale or
other disposition shall relieve such City of its obligations under this Contract (including
the obligations under Sections 10, 11 and 14) so long as any Bonds are outstanding;
provided, however, no assignment of any rights hereunder may be made if, in the
opinion of counsel of recognized standing in the field of law relating to municipal bonds
selected by the Agency, such assignment would adversely affect the exemption from
federal income taxation of the interest on the Bonds.
Section 21: Dissolution of the Agency. At such time as the Debts of the Agency
have been paid or provisions made therefor pursuant to the Bond Resolution, and the
Agency is dissolved, each City who has not made an election under Section 13 shall be
entitled to an undivided interest in the properties of the Agency in proportion to the
amount paid to the Agency under this Contract.
Section 22: Force Majeure. (a) If for any reason of "force majeure" any of the
parties hereto shall be rendered unable, wholly or in part, to carry out its obligations
under this Contract, other than the obligation of the Cities to make the payments
required under the terms of this Contract, then if such party shall give notice and the
full particulars of such reasons in writing to the other party within a reasonable time
after the occurrence of the event or cause relied on; the obligation of the party giving
such notice, so far as it is affected by such "force majeure," shall be suspended during
the continuance of the inability then claimed, but for no longer period, and such party
shall endeavor to remove or overcome such inability with all reasonable dispatch. The
term "force majeure" as employed herein shall mean acts of God, strikes, lockouts, or
other industrial disturbances, acts of the public enemy, orders or actions of any kind
of the Government of the United States or of the State of Texas or any civil or military
authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires,
hurricanes, storms, floods, washouts, droughts, arrests, restraints of government and
people, civil disturbances, explosions, breakage or accident to dams, machinery,
pipelines, or canals or other structures or machinery, on account of any other cause not
reasonably within the control of the party claiming such inability. It is understood and
agreed that the settlement of strikes and lockouts shall be entirely within the discretion
of the party having the difficulty, and that the above requirement that any "force
majeure" shall be remedied with all reasonable dispatch shall not require the settlement
of strikes and lockouts by acceding to the demand of the opposing parties when such
settlement is unfavorable to it in the judgment of the party having the difficulty.
(b) No damages shall be recoverable from the Agency or the Cities by reason
ON148MSM -16-
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of the causes above mentioned.
Section 23: Insurance. (a) The Agency shall maintain, or cause to be
maintained in force for the benefit of the Agency, such insurance with respect to the
System as shall be reasonably available and as is usually carried by municipal electric
utilities constructing and operating generating and transmission facilities but, in the
case of nuclear generating facilities, not less than will satisfy the requirements of
federal and state law and the Nuclear Regulatory Commission regulations, and such
other insurance as is usually carried by municipal electric utilities owning like
properties; provided, however, in any event, the Agency shall maintain, or cause to be
maintained, in force, insurance in such amounts and against such risks as required by
the Bond Resolution.
(b) The Agency will secure and maintain adequate fidelity insurance or bonds
on all officers and employees handling or responsible for funds of the Agency.
(c) The obligation hereunder to procure and maintain insurance with respect
to a Joint Project, as defined in the Bond Resolution, shall be met if the entity acting
as the manager of the Joint Project obtains and maintains the insurance required for
the benefit of all owners of the Joint Project, as their interest may appear.
(d) The Agency may establish and create a special fund for the purpose of
providing a self insurance fund. Amounts to be deposited in or credited to such fund
in any Contract Year shall be accounted for as Operating and Maintenance Expenses.
To the extent that monies are deposited in such fund, if created, such monies may be
invested in Investment Securities, as defined in the Bond Resolution. To the extent of
the amounts held in such fund, the face amount of appropriate insurance policies may
be reduced.
Section 24: Reports. The Agency will prepare and issue to each City the
following reports for each fiscal year: (i) financial and operating statement relating to
the System; (ii) status of construction for each facilityconstituting the System during
construction; and (iii) analysis of operations relating to the System.
Section 25: Records and Accounts. The Agency will keep accurate records and
accounts of the System and of the transactions relating to each facility constituting the
System as well as of the operations of the Agency in accordance with the Uniform
System of Accounts, which shall include depreciation. Within one hundred twenty (120)
days after close of each Contract Year, the Agency shall cause such records and
accounts and all transactions of the Agency relating to the System with respect to such
Contract Year to be subject to an annual audit by an independent certified public
accountant. A copy of each such annual audit shall be sent by the Agency to each City.
Section 26: Access. Each City shall at all times have reasonable access to
examine any and all books and records of the Agency and to examine any facility of the
System. The Agency and each City will give the other the right to enter the premises
of the other at all reasonable times for the purpose of repairing or removing facilities,
reading meters and performing work incidental to delivery and receipt of Power and
05014S 3M -17-
V:XMff' 13
Energy furnished hereunder.
Section 27: Governmental Rates. Regulations and Laws. The Contract shall be
subject to all valid rules, regulations and laws applicable thereto, as promulgated by the
United States of America, the State of Texas, or any other governmental body or agency
having lawful jurisdiction or any authorized representative or agency of any of them.
Section 28: Easements. To the extent permitted by applicable charter
provisions, each City agrees that the Agency or its agent shall (when permitted by
existing easement) have full access to such easements or over any easements,
right-of-way or property held by such City if, and to the extent, required by the Agency
for any and all purposes required for the System or any Project thereof.
Section 29: Notices. Any notice, request, demand, statement or bill provided for
in this Contract shall be in writing and shall be considered to have been duly delivered
when sent by registered or certified mail, addressed as follows, unless another address
has been designated, in writing, by the party entitled to receive same:
Agency:
West Texas Municipal
Power Agency
P.O. Box 2000
916 Texas Ave
Lubbock, Texas 79457
Attn.: Executive Director
Cities:
City of Brownfield
218 W. Main Streetl
Brownfield, Texas 79316
Attn: City Manager
City of Floydada
114 West Virginia
Floydada, Texas 79235
Attn: City Manager
City of Lubbock
1625 13th Street
Lubbock, Texas 79401
Attn: City Manager
City of Tulia
201 N. Maxwell
Tulia, Texas 70988
Attn: City Manager
Section 30: Severability. The parties hereto agree that if any of the provisions
of this Contract should contravene or be held invalid under the laws of the State of
Texas, such contravention or invalidity shall not invalidate the whole Contract but it
shall be construed as though not containing that particular provision, and the right and
obligations of the parties shall be construed and in force accordingly.
Section 31: Entire Contract. This Contract, as amended as of April 1, 1998,
shall constitute the entire understanding between the parties hereto, superseding any
and all previous understanding, oral or written, pertaining to the subject matter
contained herein. No party hereto shall have any relief, or be entitled to rely, upon any
oral representation or oral information made or given to such party by any
representative of the other party or anyone on its behalf.
Section 32: No Waiver. The failure of a party to enforce at any time any of the
provisions of this Contract or to require at any time performance by the other party of
any of the provisions of this Contract shall not be construed as a waiver Qf such
provisions or the right of such party thereafter to enforce each and every provision of
this Contract.
05014Sve 3M -18-
,1i111, 9
Section 33: Contracts to be Separate. This instrument embodies four separate
contracts between the Agency and each City. Termination of one Contract shall not
affect the others.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed in their corporate names and their corporate seals affixed, all by the proper
officer duly authorized thereunto, as of the day and year first hereinabove written.
WEST TEXAS MUNICIPAL POWER AGENCY
(SEAL) By:
ATTEST: President, Board of Directors
By:
Secretary, Board of Directors
(SEAL)
ATTEST:
By:
City Secretary
(SEAL)
ATTEST:
By:
City Secretary
CITY OF LUBBOCK, TEXAS
By:
Mayor
CITY OF BROWNFIELD, TEXAS
By:
Mayor
0W1491/973990
(SEAL)
ATTEST:
By:
City Secretary
(SEAL)
ATTEST:
By:
City Secretary
CITY OF TULIA, TEXAS
By:
Mayor
CITY OF FLOYDADA, TEXAS
By:
Mayor
oboi+svMsM -20-
J XHIBff B
EXHIBIT "A"
to
Power Sales Contract
City of Lubbock
1) Holly Switching Station
Facilities included are as follows:
(a) 230 KV interconnection with SPS
(b) 60/80/100 MVA, 230/69 KV autotransformer
(c) Associated breakers, bus work, switches, etc.
2) West Intertie Substation:
Facilities included are as follows:
(a) 230 KV interconnection with SPS
(b) 60/80/100 MVA, 230/115/69 KV autotransformer
(c) Associated breakers, bus work, switches, etc.
3) Plant No. 2 (under construction
Facilties included are as follows:
(a) 115/69 KV interconnection with LP&L
(b) 70 MVA 115/69/13,8 KV Transformer
(c) Associated breakers, bus work, switches, etc.
City of Brownfield
Brownfield Delivery Point
Facilities included are as follows:
(a) 69 KV interconnection with SPS
(b) Associated switches
(c) 69 KV line
City of Floydada
Floydada Delivery Point
Facilities included are as follows:
(a) 69 KV interconnection with SPS
(b) Associated switches
(c) 69 KV line
City of Tulia
Tulia Substation
Facilities included are as follows:
(a) 115 KV interconnection with SPS
(b) 115 KV line
(c) Associated switches
HOUR;]
EXHIBIT B
RATES AND CHARGES
(1) RATES FOR POWER AND ENERGY
The rates to be charged by the Agency for Power and Energy furnished to the
Cities shall consist of a demand charge and energy charge. These charges shall be
based on cost of service to the degree that is practical. The costs used in developing
cost of service rates shall be based on accounting entries. as outlined in the Federal
Power Commission's Uniform System of Accounts.
The rates for demand charges shall be established to recover costs that are
related to Debt Service, (including coverage ratios), other ordinarily predictable stable
Operating and Maintenance Expenses and such other reasonable fixed costs as these
costs relate to plant and transmission capacities utilized. The demand charges shall be
based on the above listed costs in proportion to total KW that the Agency has available.
Proper consideration shall be given in the demand charges for such factors or
coincident peak demands, diversity factors, load factors, etc. of the Cities.
Energy charges shall be based on fuel costs, operating personnel costs, variable
Operating and Maintenance Expenses, transmission losses, station service energy, and
other such reasonable variable costs as these costs relate to energy provided to Cities.
The rate making methods used to develop these demand and energy charges shall
be consistent with standard utility wholesale rate making procedures. These methods
shall be applied as appropriate to the System.
It is recognized that these rates shall be developed in a reasonably equivalent
manner as similar wholesale power suppliers, State Utility Commission guidelines, and
FERC rate regulations as applied to like power systems.
(2) RATES FOR SERVICES PROVIDED TO ALL CITIES
Various services shall be provided to all Cities as directed by the Board of
Directors and will be paid for by the Cities at a rate per kilowatt-hour which shall be
established from time to time by the Board of Directors. Each City's share of such
charges shall be that portion of the total represented by the ratio of his share of the net
energy received from others to the total net energy received from others of all of the
Cities. Billings will be made in advance on estimates of loads and paid evenly
throughout the year.
(3) RATES FOR SPECIAL SERVICES PROVIDED TO A SPECIFIC CITY
Special services may be provided to a member from time to time at the request
of a City. Reimbursement for these services will be made at cost by the City receiving
the services.
�
RESOLUTION NO.5M
Item #21
March 12, 1998
CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS §
COUNTY OF LUBBOCK §
CITY OF LUBBOCK §
I, the undersigned, City Secretary of the City of Lubbock,
Texas, DO HEREBY CERTIFY as follows:
1. On the 12th day of March, 1998, a regular meeting of
the City Council of the City of Lubbock, Texas, was held at a
meeting place within the City; the duly constituted members of the
Council being as follows:
WINDY SITTON MAYOR.
ALEX "TY" COOKE ) MAYOR PRO TEM
VICTOR HERNANDEZ )
T. J. PATTERSON )
DAVID NELSON ) COUNCILMEMBERS
MAX INCE )
RANDY NEUGEBAUER )
and all of said persons were present at said meeting, except the
following: n/a Among other
business considered at said meeting, the attached resolution
entitled:
"A RESOLUTION' ratifying, confirming and approving
the City's prior approval of and agreement
to participate in a project to be undertaken
by the West Texas Municipal Power Agency;
approving and authorizing the execution of
an Amended Power Sales Contract; and
resolving other matters incident and related
thereto."
was introduced and submitted to the Council for passage and
adoption. After presentation and due consideration of the
resolution, and upon a motion being made by rminrilmamhPr AIPx "Z Cooke
and seconded by Cau13c43=ember T)auid uelcnn , the resolution was
finally passed and adopted by the Council to be effective
immediately by the following vote:
7 voted "For"
OWID a
0 voted "Against" 0 abstained
all as shown in the official Minutes of the Council for the
meeting held on the aforesaid date.
2. The attached resolution is a true and correct copy
of the original on file in the official records of the City; the
duly qualified and acting members of the City Council of said City
on the date of the aforesaid meeting are those persons shown above
and, according to the records of my office, advance notice of the
time, place and purpose of the meeting was given to each member of
the Council; and that said meeting and the deliberation of the
aforesaid public business was open to the public and written
notice of said meeting, including the subject of the above
entitled resolution, was posted and given in advance thereof in
compliance with the provisions of V.T.C.A., Government Code,
Chapter 551, as amended.
IN WITNESS WHEREOF, I have hereunto signed my name
officially and affixed the seal of said City, this the 12th day of
March, 1998.
Cit ecretary, City of
Lubb6dk, Texas
=.(City Seal)
ONTO a
-2-
U
TELEPHONE: 214/855-8000
FACSIMILE: 214/855-8200
WRITERS INTERNET ADDRESS:
eesquivel@lulbcight.com
WRITERS DIRECT DIAL NUMBER:
214/855-8015
FULBRIGHT & JAWORSKI
L.LP.
A REGISTERED LIMITED LIABILITY PARTNERSHIP
2200 ROSS AVENUE
SUITE 2800
DALLAS, TEXAS 75201
March 4, 1998
Delivered via Federal Express
Ms. Betsy Bucy
Finance Manager
City of Lubbock
1625 13th Street
Lubbock, Texas 79401
Re: West Texas Municipal Power Agency
Dear Betsy:
Enclosed herewith are the following proceedings, to wit:
HOUSTON
WASHINGTON, D.C.
AUSTIN
SAN ANTONIO
DALLAS
NEW YORK
LOS ANGELES
LONDON
HONG KONG
1. Eight copies of the Certificate of City Secretary relating to the Resolution
hereafter mentioned. After completion and execution, one copy is for the records of the City,
one copy is for the Agency's records and six copies are to be returned to us.
2. Three copies of the Resolution ratifying, confirming and approving the City's
prior approval of and agreement to participate in the Project to be undertaken by the West
Texas Municipal Power Agency and approving and authorizing the execution of an Amended
Power Sales Contract. After adoption and execution, one copy is for the City's records, one
copy is for the Agency's records and one copy is to be returned to us.
Copies of the Amended Power Sales Contract for execution purposes will be
forwarded after the Agency approves the same.
Should you have any questions, please advise.
Sincerely,
0
Ed H. Esquivel
EHE:dfc
Enclosures
cc: Mr. Vince Viaille (with enclosures)
3-17-98 Original (one copy) of Resolution 5789 and six original Certificate of
City Secretary are enclosed.
ON19M Thank you
KaythR Darnell, City Secretary City of Lubbock
SENDER' "
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3. Article Addressed to: 4a. Article Number
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and fee is paid) 4
U.S. GPO: 19911-257-M DOMESTIC RETURN RECEIPT
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