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HomeMy WebLinkAboutResolution - 052374G - Gas Sales Agreement - Pioneer Natural Gas Co - LP&L - 05_23_19740'5Z57e/61 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 AGREE- MENT between the City of Lubbock and Pioneer Natural Gas Company covering natural gas for Lubbock Power and Light 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. ssed by the City Council this 23rd day of May, ATTEST: reva Phillips, City ecretary-Treasurer or APPROVED AS TO FORM: Fred O. Senter, Jr., City rney v 1 IL4. c 7 1 i�45 BOY BASS, MAYOR No Text I N D E X ARTICLE TITLE PAGE NWBER I DEFINITIONS 1 II QUANTITY 2 III DELIVERY POINT 4 IV" :DELIVERY PRESSURE 5 V METERING 5 VI MEASUREMENT 7 VII PRICE 8 VIII HEATING VALUE 13 IX BILLING AND PAYMENT -14. X QUALITY 15 XI TITLE 16 XII FORCE MAJEURE 16. XIII NOTICES 17 XIV SUCCESSORS 'AND ASSIGNS 18 XV TRAINTENANCE OF FACILITIES 18 XVI DURATION OF AGREENIENT 19 XVII INDEIMIFICATION _ 19 XVIII DESCRIPTIVE HEADINGS 19 , XIX ITISCELLANEOUS 19 )a GOVERM[A ENTAL REGULATIONS - 20 GAS SALES AGREEMMT Section 2. "Billing ?Jloz th" 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 calendar month. Section 3. "Accounting Year" shall mean a yearly period commencing at 7:00 A.M. on July L and ending at 7:00 A.H. on the next succeeding July 1. In the event deliveries commence hereunder on a date,other,than July 1, the period of time from the date of first deliveries until the following July 1 shall be considered as the first accounting year. In the event de- liveries permanently cease on a date other than a July 1, the period of time from the July 1 immediately preceding the date of such delivery cessation shall be considered as the final accounting year. Section 4. The term "Mcf" shall mean one thousand cubic feet at a temperature of 60 degrees Fahrenheit and an absolute pressure of 13.60 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 near the City of Lubbock in Lubbock County, Texas. ARTICLE II .QU&ITITY Section 1. Commencing July 1, 1974 Seller agrees to deliver to Buyer up to the following volumes of natural gas: (1) From July 1, 1974 through June 30, 1977 32,000 Mcf/day; (2) From July 1, 1977 through June 30, 1978 - 21,333 Mcf/day; (3) From July 1, 1978 through June 30, 1979 - 14,222 Mcf/day; -2- Buyer agrees to take and receive from Seller each day during the term hereof those volumes of natural gas which are made available by Seller on such day up to the total volumes required by Buyer for consumption in Buyer's municipal power plants.on such day; provided, however, Buyer's ob- ligation to take and receive from Seller shall be 6,000,000 )ACF during the first, second and third accounting years hereof, 4,000.,000 MCF during the fourth accounting year hereof and 2,667,000 MCF during the fifth accounting year hereof. Section 2. In the event Buyer fails to `take from Seller the minimum volume of gas which Buyer is obligated to take and pay for from Seller, during each accounting year pursuant to the provisions of this Article.II, then Buyer shall pay Seller for that quantity of gas which equals the dif- ference between the minimum volumes Buyer was obligated to take and pay for during the applicable accounting year and the volume which Buyer did actually take and pay for. The price which Buyer shall pay Seller for such deficiency shall be the average price in effect for the accounting year the deficiency occurred. - Section 3. Gas delivered under this contract.is subject to cur- tailment or interruption when in the sole judgment of the Seller such cur' tailment or interruption, regardless ofcause, is necessary to maintain service to consumers served on the Seller's General Service Schedule, Regular Industrial Service Schedule, or any other service schedule. The Seller shall be the sole and exclusive judge as,to the necessity or desirability of cutting off or reducing the supply of gas from time to time, and the exercise of this right shall not be the basis for any claim for damages sustained by either party. In the event curtailment or interruption becomes necessary, Seller will use its best efforts to curtail all customers of the 'same classificatio -3 in the immediate vicinity proportionately. In this instance, the term "same classification" shall mean electric production and distribution systems and the tern "immediate vicinity" shall mean that area of the Seller's system affected by such curtailment or interruption. Section. In the event an interruption in, or curtailment of, deliveries'shall become necessary or advisable, Seller shall at once notify Buyer 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 5. In the event the delivery of gas is interrupted or curtailed at the request of Buyer pursuant to Article.XII or at the request of the Seller, then, and in such event, the min mum. volume of gas herein contracted for shall be reduced by 1/365th 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 -4- No Text 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 t,,m per cent (2%) erroneous in the aggregate, previous readings of such equipment shall.be considered correct in computing the deliveries of gas hereunder, but such equipment shall be adjusted at once to read ac- curately. If upon any test the measuring equipment shall be found to be inaccurate in the aggregate by an amount exceeding two per cent (2%) at a reading corresponding to the average rate of floor 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 pur- chased 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 -6- basis the volumes delivered during precedingperiods under similar conditions when the meter was registering .accurately. ARTICLE VI AZASUREM ENT 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 and revisions thereto, or other generally accepted tables relating to gas measurement applied in a practical and ap- propriate manner. Correction shall be made for deviation from Ideal Gas Lams 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 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 measurement. Section 4. Seller shall, at its.sole.cost,risk, and expense, install maintairr 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 -7^ computations of measurement. In the event Seller has installed, or shall in the future install, a recording gravitometer at a point on its system No Text price as provided for in Section l of this Article VII shall be adjusted upward as follows: For each one-half of one percent (or dollar equivalent) by which the present composite rate of 4% is increased, the base price as provided for in Section 1 shall be increased by 1¢ per Mcf; provided, the maximum increase pursuant to this Section 4 shall be.2¢ per Mcf; and, provided further, that no such adjustment -shall be effective prior to January 1, 1976. Section 5. For the purpose of this agreement the term "weighted average cost of gas to Seller's West Texas Transmission System" shall mean, the average, price per Rof of all gas purchased by Seller, for utilization in Seller's West Texas Transmission System or its Delaware Basin Division, computed tothenearest 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, amounts expended which are accrued by Seller to parties other than Seller for the purchase, transportation, gathering, 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 oven 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 sulphide and/or organic sulphur _10- No Text No Text No Text No Text No Text No Text No Text No Text No Text -20-