HomeMy WebLinkAboutResolution - 5995 - Amendment To Agreement- Energas Company- Main Extension, Gas Transportation, Etc - 09_10_1998Resolution No. 5995
Item No. 26
September 10, 1998
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 First Amendment to
Municipal Main Extension, Gas Transportation and Pipeline Operation and Maintenance
Agreement by and between the City of Lubbock, d/b/a Lubbock Power & Light and
Energas Company, attached hereto, which shall be spread upon the minutes of the
Council and as spread upon the minutes of this Council shall constitute and be a part of
this Resolution as if fully copied herein in detail.
Passed by the City Council this loth day of September , 1998.
ATTEST:
Kaythfe Parnell, City -Secretary
APPROVED AS TO CONTENT:
Paul Thompso , Managing Director
of Electric Utilities
APPROVED AS TO RM:
chard K. Casner, Natural-kasources Attorney
da/ccdocs/enMas.res
August 27, 1998
Resolution No. 5995
Item No. 26
September 10, 1998
FIRST AMENDMENT TO MUNICIPAL MAIN EXTENSION,
GAS TRANSPORTATION AND PIPELINE
OPERATION AND MAINTENANCE AGREEMENT
THIS FIRST AMENDMENT TO MUNICIPAL MAIN EXTENSION, GAS
TRANSPORTATION AND PIPELINE OPERATION AND MAINTENANCE AGREEMENT
("Amendment") is made by and between ENERGAS COMPANY, a division of Atmos
Energy Corporation, a Texas and Virginia corporation (hereinafter °Energas"), and the
CITY OF LUBBOCK, d/b/a LUBBOCK POWER & LIGHT, a Texas incorporated
municipality (hereinafter "LP&L").
WITNESSETH:
WHEREAS, effective January 8, 1998, Energas and LP&L entered into that
certain Municipal Main Extension, Gas Transportation and Pipeline Operation and
Maintenance Agreement ("Agreement"); and
WHEREAS, the Plant (as defined in the Agreement) will not be ready to receive
gas transported by Energas under the provisions of the Agreement until on or about July
1, 1999; and
WHEREAS, LP&L has entered into an agreement with a third party regarding the
operation and maintenance of the LP&L' Pipeline (as defined in the Agreement) and
desires to release Energas from any obligations under the Agreement concerning the
operation and maintenance of the LP&L Pipeline; and
WHEREAS, the parties desire to amend and modify certain terms and provisions
of the Agreement to accommodate the extended date, as well as certain other terms and
provisions of the Agreement; as hereinafter set forth in this Amendment.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Energas and LP8,L hereby amend and modify the Agreement as follows:
1.. The second part of the fourth recital paragraph on Page 1 of the
Agreement concerning the operation and maintenance of the LP&L Pipeline is deleted in
its entirety.
2. Subparagraph (a) of Section 1.11 of the Agreement is deleted in its,
entirety and the following new subparagraph (a) is substituted in lieu thereof:
"a. For the Plant Pipeline, the Points of Receipt shall be the interconnection
between the LP&L Lateral and the KN (Red River) pipeline located in the
Northwest Comer, Section 54, Block S, Lubbock County, Texas, the
interconnection between the LP&L Lateral and the LG&E (PowerTex) pipeline
located at the LP&L Holly Station in Lubbock County, Texas, and the point of
connection of the LP&L Pipeline (which is an eight -inch gas line owned by LP&L,
approximately thirty miles in length and which runs from the Cedar Hill gas
processing plant in Garza County, Texas, to a point ending at the interconnection
between the LP&L Lateral and the KN (Red River) pipeline in Lubbock County,
Texas) and the LP&L Lateral.'
3. Section 2.03 of the Agreement is deleted in its entirety and the following
new Section 2.03 is substituted in lieu thereof:
02.03 From and after January 8, 1998 (the "Effective Time"), Energas will
proceed with reasonable diligence to obtain all Easements for the Right -Of -Way,
and Energas shall complete the acquisition of the Right -Of -Way so that the
installation and construction of the Energas Lateral will be completed on or
before March 15, 1999 (the "Completion Date"). if Energas has not completed
the installation and construction of the Energas Lateral by the Completion Date,
LP&L may, at its option, terminate this Agreement by sending written notice of its
election to terminate to Energas. Said notice must be sent to Energas on or
before the expiration of five (5) days after the Completion Date. In the event
LP&L elects to terminate pursuant to this Section 2.03, LP&L shall, within thirty
(30) days after the termination date, purchase all interests of Energas in and to
the Right -Of -Way and the Energas Lateral from Energas in an amount equal to
the total of all actual costs incurred by Energas, through and including the
termination date, in connection with the acquisition of the Right -Of -Way and the
construction of the Energas Lateral. If LP&L does not terminate this Agreement
pursuant to and in accordance with this. Section 2.03, then LP&L shall be
deemed to have waived the termination option under this Section 2.03 and the
Completion Date shall, without the necessity of further action by either party
hereto, be automatically extended to July 1, 1999. Notwithstanding anything
herein to the contrary, the provisions of this Section 2.03 are expressly subject to
the provisions of Article 17 of this Agreement."
4. The third sentence of Section 3.01 of the Agreement is deleted in its
entirety and the following new sentence is substituted in lieu thereof:
"The Lateral will be comprised of approximately eight (8) miles of standard
construction grade steel pipeline, grade X-52, having a wall thickness of 0.250.'
5. Section 3.04 of the Agreement is deleted in its entirety and the following
new Section 3.04 is substituted in lieu thereof:
"3.04 From and after the Effective Time, Energas will proceed with reasonable
diligence to complete the construction and installation of the Energas Lateral,
and the. interconnections between the LP&L Lateral and the KN (Red River) and.
LG&E (PowerTex) pipelines, on or before the Completion Date. If Energas has
not completed the foregoing by the Completion Date, then LP&L shall have the
option to terminate this Agreement as provided in and pursuant to the provisions
of Section 2.03 of this Agreement. Notwithstanding the foregoing, Energas shall
be entitled to extend the Completion Date as provided in Article 17 if, through no
fault on the part of Energas, the completion of the construction and installation of
the Energas Lateral is delayed."
6. Section 6.03 of the Agreement is deleted in its entirety and the following
new Section 6.03 is substituted in lieu thereof:
2
"6.03 Subject to the provisions of this Agreement and commencing on January
1, 1999, Energas agrees to receive, transport and deliver, on an interruptible
basis, for and on behalf of LP&L, and LP&L agrees to deliver or cause to be
delivered to Energas for redelivery through the Lubbock System, all of the gas
that LP&L or the City of Lubbock purchases and uses to meet all of LP&L's or the
City of Lubbock's requirements at the Municipal Facilities identified in Exhibit A
attached hereto, all of which are located in or near the City of Lubbock, Texas;
provided, however, that Energas shall have no obligation to transport gas
hereunder through the Lubbock System on account of LP&L or the City of
Lubbock in "excess of 3,000 MMBtu per day. Energas shall receive such gas at
the designated Point(s) of Receipt therefor and transport the same through the
Lubbock System to the Point(s) of Delivery therefor. Receipt and delivery of
more than 3,000 MMBtu per day through the Lubbock System is subject to
available capacity therein."
7. Article 8 (inclusive of Sections 8.01 through 8.05) of the Agreement is
deleted in its entirety.
8. Section 9.01 of the Agreement is amended by deleting the first sentence
thereof and substituting the following in lieu thereof:
"Unless otherwise specifically provided herein, the unit of measurement for gas
delivered and redelivered hereunder at the Points of Receipt and the Points of
Delivery shall be one MMBtu."
9. Sections 9.02 and 9.03 of the Agreement are amended by deleting all
references therein to the "O&M Metering Point".
10. Section 9.04 of the Agreement is amended by deleting all references
therein to the "O&M Metering Point" and the "LP&L Pipeline°.
11. Section 9.06 of the Agreement is amended by deleting all references
therein to the "O&M Metering Poinf.
12, Subparagraph (b) of Section 12.01 of the Agreement is deleted in its
entirety.
13. The reference to Article 11 in subparagraph (a) of Section 13.01 of the
Agreement is changed to read "Article 12".
14. The following subparagraph (f) is added to Section 13.01 immediately
following subparagraph (e):
"(f) . LP&L shall fail to have the Plant operational and ready to receive gas
through the Energas Lateral by July 1, 1999.
.15. Section 13.03 of the Agreement is deleted in its entirety and the following
is substituted in lieu thereof:
"13.03 Upon the occurrence of any event of default enumerated in subparts (b)
through (e) of Section 13.01, Energas shall be entitled to terminate this
3
Agreement and seek damages in accordance with Section 13.04 of this
Agreement. Upon the occurrence of an event of default under subpart (f) of
Section 13.01, Energas shall, as its sole and exclusive remedy hereunder on
account of such default, be entitled to receive payment .from LP&L, in addition to
any applicable charges under Article 11 of this Agreement, the sum of Three
Hundred Dollars ($300.00) per day until the day on which - LP&L commences
initial deliveries of gas to Energas for re -delivery by Energas to LP&L through the
Energas Lateral. The parties agree that the foregoing daily sum is not a penalty
but instead constitutes a reasonable pre -estimate of Energas' probable loss on
account of any failure by LP&L to have the Plant operational and ready to receive
gas through the Energas Lateral by July 1, 1999."
16. Section 15.02 of the Agreement is amended by deleting all references
therein to the "LP&L Pipeline".
17. Except as modified by this Amendment, all terms, conditions and
provisions of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year last written below.
ENERGA MPANY, a div' ion of .CITY OF LUBBOCK, TEXA
Atmos erg Corporation
AnthonAdoney Windy Si n, Mayor
Vice President, Ce al Regio
Date: Date: September 10, 1998
Approved as to Content:
Paul Thompson
Director of Electric Utilities,
Lubbock Power and U ht
Richard K. asner
Natural -Resources Attorney
4