HomeMy WebLinkAboutResolution - 2006-R0252 - Joint Gas Purchase Contract - TMGC II & City Of La Grange - Natural Gas Purchase - 06_08_2006Resolution No. 2006-RO252
June 8, 2006
Item No. 5.22
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 joint gas purchase contract between the City
of Lubbock and Texas Municipal Gas Corporation II (TMGC II) and the City of La Grange for
the purchase of natural gas for use in municipal buildings and facilities which is attached hereto
and 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 8th
ATTEST:
Re ecca Garza, City Secretary
APPROVED AS TO CONTENT:
- zavd� -
Le Ann Dumbauld, City Manager
APPROVED AS TO FORM:
Matt ew L. Wade
Natural Resources Attorney
mUccdocs/TMGCff. res
June 5, 2006
day of June , 2006.
David A filler, Mayor
Resolution No. 2006-RO252
June 8, 2006
Item No. 5.22
ADDENDUM TO GAS SUPPLY CONTRACT
This Addendum to Gas Supply Contract (this "Addendum'), dated as of June 8, 2006, among the
City of Lubbock, Texas, doing business as Lubbock Power and Light (hereinafter referred to as the
"Buyer'), ConocoPhillips Company (hereinafter referred to as the "Supplier'), and BP Energy
Company, a Delaware corporation (hereinafter referred to as the "Dealer'),
WITNESSETH:
WHEREAS, the Buyer and the Supplier have entered into a contract dated as of April 1, 2005
(hereinafter, together with extensions and replacements thereof and amendments thereto entered into by
the Buyer and the Supplier, referred to as the "Supply Contract'), under which, for the term, on the
conditions, and up to the maximum amount specified therein, the Supplier has agreed to sell and deliver
to the Buyer, at the point or points designated therein or pursuant thereto (hereinafter referred to as the
"Buyer's Point of Receipt'), the Buyer's requirements for natural gas;
WHEREAS, the Buyer has entered into a Joint Gas Purchase Contract, dated as of April 1, 1998
(as amended and supplemented from time to time, herein referred to as the "Prior Cooperative Contract")
with Texas Municipal Gas Corporation (herein referred to as "TMGC l') and the City of La Grange,
Texas (herein referred to as the "Agent"), under which TMGC I has agreed to sell and deliver through the
Agent to the Buyer, and the Buyer has agreed to receive and purchase from the Agent, certain quantities
of gas at a lower price than the price of gas sold by the Supplier to the Buyer pursuant to the Supply
Contract; to facilitate sales by TMGC I to the Buyer, the Supplier, Coral Energy Resources L.P. (herein
referred to as "Coral"), and the Buyer have entered into that certain Addendum to Gas Supply Contract,
dated as of January 1, 2006 (as amended from time to time, herein referred to as the "Prior Addendum"),
under which the Supplier has agreed on conditions therein stated to sell and deliver to Coral (rather than
the Buyer), for exchange with TMGC I pursuant to the Gas Exchange and Annual Balancing Agreement,
dated as of June 1, 1998, and the Gas Exchange and Annual Balancing Agreement (New Series), dated as
of August 1, 2003 (collectively, as amended from time to time, herein referred to as the "Prior Exchange
Agreements") and between TMGC I and Coral, and sale by TMGC I through the Agent to the Buyer, the
quantities of gas to be sold and delivered by TMGC I to the Buyer under the Prior Cooperative Contract,
while remaining obligated to sell and deliver the balance of the Buyer's requirements for natural gas
pursuant to the Supply Contract; and TMGC I is not expected to be able to sell sufficient quantities of gas
to the Buyer to meet the Buyer's full requirements during the full term of the Prior Cooperative Contract;
WHEREAS, Texas Municipal Gas Corporation II (hereinafter referred to as "TMGC IF) has
offered to admit the Buyer as a party to a Joint Gas Purchase Contract, dated as of January 1, 2006
(hereinafter, as amended from time to time, referred to as the "Cooperative Contract") under which
TMGC II would sell and deliver through the Agent to the Buyer, and the Buyer would receive and
purchase from the Agent, at the Buyer's Point of Receipt certain quantities of gas at a lower price than the
price of gas delivered to the Buyer by or on behalf of the Supplier pursuant to the Supply Contract;
WHEREAS, in order to enable TMGC II to perform its obligations under the Cooperative
Contract without excessive transportation costs for (and to accommodate seasonal imbalances in supply
of and demand for) the gas to be sold and delivered to the Buyer pursuant to the Cooperative Contract,
TMGC II and the Dealer have entered into a Gas Exchange and Annual Balancing Agreement, dated as of
January 1, 2006 (as amended from time to time, herein referred to as the "Exchange Agreement') under
which the Dealer is required to deliver quantities of gas to TMGC II at the Buyer's Point of Receipt, from
and to the extent of gas sold and delivered to the Dealer by the Supplier pursuant hereto, in exchange for
gas delivered by TMGC II to the Dealer at one or more other locations; and
Lubbock Supplier Addendum
WHEREAS, the Supplier is willing to enter into this Addendum to sell and deliver gas to the
Dealer at the Buyer's Point of Receipt and to reduce the quantities of gas required to be received and
purchased by the Buyer from the Supplier at the Buyer's Point of Receipt pursuant to the Supply
Contract;
NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants,
agreements, conditions, and undertakings herein set forth, the parties hereto agree as follows:
1. Sale and Delivery to the Dealer. On each day while the Supply Contract and this
Addendum are in effect, the Supplier shall sell and deliver to or for the account of the Dealer, and the
Dealer shall receive or cause to be received and purchased from the Supplier, at the Buyer's Point of
Receipt and for the same price as the price for gas sold and delivered by the Supplier to the Buyer
pursuant to the Supply Contract, quantities of gas equal to the quantities of gas nominated and confirmed
for delivery to the Buyer at the Buyer's Point of Receipt on such day pursuant to the Cooperative
Contract, but not more than the lesser of (a) the maximum quantity of gas then required to be sold and
delivered by the Supplier to the Buyer at the Buyer's Point of Receipt pursuant to the Supply Contract,
determined without giving effect to Section 2 hereof but after giving effect to the Prior Addendum, or (b)
the quantity of gas which TMGC II schedules for delivery to the Buyer on such day at the Buyer's Point
of Receipt. Such sale and purchase of gas between the Supplier and the Dealer shall be made on the same
terms (including warranties and indemnities of the Supplier and the effect of force majeure) and subject to
the same conditions as the terms and conditions of the Supply Contract to the same extent and for all
purposes as if the Supplier and the Dealer had entered into the Supply Contract, except as otherwise
provided herein and except that the Dealer shall not make (and shall not be deemed to have made) any
representations, warranties, covenants, or certifications of the Buyer or the Supplier under the Supply
Contract and the Supplier shall not have the right to audit the Dealer's books and records. If more than
one price is set forth in the Supply Contract for gas sold and delivered thereunder by the Supplier (e.g.,
due to graduated volume discounts), the price for gas sold to the Dealer pursuant to this paragraph shall
be the weighted average price (determined in accordance with Section 3 hereof) for gas sold and delivered
by the Supplier to the Buyer pursuant to the Supply Contract. The Buyer and the Supplier acknowledge
that the net amounts payable by the Buyer- to the Supplier pursuant to the Supply Contract (as amended by
the Prior Addendum and this Addendum) shall equal the amounts payable by the Buyer to the Supplier
pursuant to the Supply Contract (determined as amended by the Prior Addendum but as if not amended by
this Addendum), less the amounts payable by Coral to the Supplier pursuant to the Prior Addendum and
by the Dealer to the Supplier pursuant to this Addendumn. The Buyer shall receive from TMGC II at the
Buyer's Point of Receipt all gas there delivered by the Supplier to the Dealer hereunder, and the Dealer
shall be obligated to receive gas from the Supplier hereunder only to the extent of such receipt by the
Buyer.
2. Sale and Delivery to Buyer. The quantity of gas to be sold and delivered by the Supplier
to the Buyer and received and purchased by the Buyer from the Supplier at the Buyer's Point of Receipt
pursuant to the Supply Contract on each day shall be reduced by the quantity of gas sold and delivered by
the Supplier to or for the account of the Dealer at the Buyer's Point of Receipt pursuant to Section 1
hereof, and the Buyer and the Supplier release each other from all obligations under the Supply Contract
relating to such quantity of gas. If more than one price is set forth in the Supply Contract for gas sold and
delivered thereunder by the Supplier, then the price at which such reduced quantity of gas shall be sold to
and purchased by the Buyer thereunder shall be equal to the weighted average price referred to in
Section 1 hereof.
3. Pay,uents. The Dealer and TMGC II have agreed that TMGC II will notify the Buyer
and the Supplier in writing, on or before the fifth Business Day of each month, of the quantities of gas
confirmed for delivery by TMGC II to the Buyer at the Buyer's Point of Receipt in such month pursuant
Lubbock supplier Addendum
to the Cooperative Contract. To the extent of gas delivered by the Supplier at the Buyer's Point of
Receipt in such month, the quantities so notified shall be deemed to be delivered to the Dealer, rather than
to the Buyer, in such month, subject to the further provisions of this paragraph. The Supplier shall cause
such deliveries to be invoiced to the Dealer, and the Dealer shall pay for such deliveries, at the price
referred to in Section 1 hereof in accordance with the applicable provisions of (and within the times
permitted by) the Supply Contract for gas delivered to the Buyer, which are incorporated herein by
reference. All other gas delivered by the Supplier at the Buyer's Point of Receipt in such month shall be
deemed to be delivered and shall be invoiced by the Supplier to the Buyer at the same price in accordance
with the provisions of the Supply Contract. Solely for purposes of computing any applicable weighted
average price, all gas sold and delivered by the Supplier to the Buyer, Coral, or the Dealer at the Buyer's
Point of Receipt in such month pursuant to the Supply Contract, the Prior Addendum, or this Addendum
shall be deemed to have been sold and delivered to the Buyer. The Dealer shall be entitled to net and set
off amounts owing to Supplier hereunder against any other amounts owed by the Supplier to the Dealer
under any other agreement between the Supplier and the Dealer.
4. No Liability, Indemnity. The Supplier and the Buyer agree that the Dealer shall not be
liable under any theory to the Supplier or the Buyer for (a) any breach by the Buyer of any term of the
Supply Contract, the Cooperative Contract, this Addendum, or any other contract to which the Buyer is a
party, (b) any breach by the Supplier of any of the terms of the Supply Contract, this Addendum, or any
other contract to which it is a party, or (c) any breach by either the Supplier or the Buyer, or their agents,
of any duty of care, law, regulation, or other legal obligation applicable to it, for gas sold and delivered by
the Supplier to the Buyer (or to the Dealer hereunder) pursuant to the Supply Contract or any other supply
arrangement applicable to any third party seller of gas to the Buyer (or to the Dealer hereunder). The
Dealer and the Buyer agree that the Supplier likewise shall not be liable under any theory to the Buyer or
the Dealer for (a) any breach by the Buyer of any term of the Supply Contract, the Cooperative Contract,
or any other contract to which the Buyer is a party, (b) any breach by the Dealer of any of the terms of the
Exchange Agreement or any other contract to which it is a party, or (c) any breach by either the Dealer or
the Buyer of any duty of care, law, regulation, or other legal obligation applicable to it, for gas sold or
exchanged and delivered by the Dealer pursuant to the Exchange Agreement. In addition, the Dealer shall
have no obligation to nominate or confirm for delivery any quantity of gas for any period. Except for the
obligations to receive and purchase gas at the price described in Section 1, the Dealer shall have no
obligations or liabilities in favor of the Supplier or any other person hereunder or under the Supply
Contract (whether or not in the context of force naajeure), including, without limitation, obligations or
liabilities (i) for taxes, warranties of title or merchantability, royalties, indemnities, scheduling fees,
imbalance charges, overpull or unauthorized gas penalties or charges, operational flow order penalties or
charges, or similar costs, or losses resulting from the liquidation of hedge positions or (ii) to maintain or
operate any measurement or transportation facilities, to manage transportation contracts or pipeline
capacity, to enter into financial hedge transactions with the Buyer, to provide risk management services or
consulting services of any type (including, but not limited to, hedging strategies, projecting gas supply
costs and fuel requirements, or regulatory services), to pay any early termination damages or cover
damages, to provide security or collateral, to provide any type of fixed price, trigger price, or other risk
management products to Buyer, or to act as agent in any capacity for Buyer or Supplier under the Supply
Contract. The obligations of the Dealer to the Supplier hereunder shall not be affected by any failure by
TMGC II to observe and perform its obligations under the Exchange Agreement or any imbalance
existing thereunder. The Supplier acknowledges that any event which constitutes force majeure or
otherwise excuses performance by the Buyer under- the Supply Contract or by TMGC lI under the
Exchange Agreement or Cooperative Contract with respect to any receipt or purchase of gas supplied
pursuant to this Addendum, including any breach by contractual counter -parties under any related contract
that has such effect, shall excuse performance by the Dealer hereunder.
Lubbock Supplier Addendum
The Supplier shall indemnify the Dealer and hold it harmless from and against any loss, cost or
liability accruing to the Dealer resulting from (a) any claim by the Buyer or any other person of breach by
the Supplier of, or negligence or misconduct by the Supplier in performance under, the Supply Contract
or this Addendum, or breach of any duty of care, law, regulation, or other legal obligation applicable to
the Supplier in connection therewith or herewith, (b) any claim which attaches before title to gas sold and
delivered by the Supplier to the Dealer hereunder passes to the Dealer, and (c) any failure of gas sold and
delivered by the Supplier to the Dealer hereunder to meet quality standards under the Supply Contract.
5. Nondisclosure by Dealer. The Dealer shall not disclose to any person the terms of the
Supply Contract (the "Confidential Information") except for disclosures of such terms (i) to Municipal
Energy Resources Partners, Ltd. (WERP"), Municipal Energy Resources Corporation ("MERC ),
TMGC I, TMGC II, Coral, and directors, officers, employees, contractors, auditors, agents, and
representatives of and counsel to the Dealer and the Dealer's parent companies and affiliates (the
"Representatives"), MERP, MERC, TMGC I, TMGC II, or Coral who need the Confidential Information
for purposes of performing the services provided under this Addendum, the Prior Addendum, the Gas
Logistics Management Agreement dated as of June 1, 1998, and the Gas Logistics Management
Agreement dated as of August 1, 2003, by and between Coral and MERP (collectively, as amended from
time to time, the "Gas Logistics Agreement"), the Prior Exchange Agreements, the Exchange Agreement,
and all other documents executed by Dealer in connection herewith and therewith or (ii) that are requested
or required (by oral questions, interrogatories, requests for information or documents in legal proceedings,
subpoena, civil investigative demand, or other similar process) to be disclosed or otherwise are required
to be disclosed by law or in connection with legal proceedings regarding this Addendum, the Prior
Addendum, the Gas Logistics Agreement, the Prior Exchange Agreements, or the Exchange Agreement
or the enforcement hereof or thereof. Notwithstanding the foregoing, the following will not constitute
Confidential Information for purposes of this Addendum, the Prior Addendum, the Gas Logistics
Agreement, the Prior Exchange Agreements, or the Exchange Agreement: (i) information which is or
becomes generally available to the public other than as a result of a disclosure by the Dealer or its
Representatives; (ii) information which was already known to the Dealer on a nonconfidential basis prior
to being furnished to the Dealer by the Supplier or the Buyer; and (iii) information which becomes
available to the Dealer on a nonconfidential basis from a source other than the Supplier or the Buyer or a
representative of the Supplier or the Buyer, if such source was not subject to any prohibition against
transmitting the information to the Dealer and was not bound by a confidentiality agreement with the
Supplier or the Buyer.
6. Governing Law. This Addendum shall be governed by and construed in accordance with
the laws of the State of Texas.
7. Notices. Except as otherwise provided in this Addendum, any notice, request, demand,
statement, bill, or other document required to be given to any party by this Addendum, and any notice
which any party hereto may desire to give any other party hereto, shall be in writing and will be
considered duly delivered when mailed by registered mail, return receipt requested, or sent by facsimile
or electronic transmission with receipt acknowledged, to the address or number of the receiving party
listed opposite its signature below or to any other address or number previously furnished in writing for
such purpose by the receiving party to the other parties hereto.
8. Successors and Assigns. The provisions of this Addendum shall be binding upon and
inure to the benefit of the successors and assigns of each of the parties hereto. No party hereto may
assign any of its rights or obligations hereunder without the consent of the other parties hereto, except to a
trustee, individual or corporate, as security for bonds, securities, or other contractual obligations. No such
consent shall be unreasonably withheld, provided that any party may refuse so to consent if the assignee
Lubbock Supplier Addendum 4
does not meet such party's credit requirements. Upon such consent and assignment, the assigning party
shall be released from all further liability hereunder, unless otherwise agreed by it.
9. Waivers. No waiver by any party hereto of any default by any other party hereto in the
observance or performance of any provision of this Addendum shall operate as a waiver of any future
default, whether of a like or of a different character.
10. Entire Addendum. This Addendum and the Supply Contract contain the entire
agreement among the parties, and except as stated herein or therein there are no oral promises,
agreements, warranties, obligations, or conditions, precedent or otherwise, affecting it.
11. Amendments. Any change, modification, or alteration of this Addendum shall be in
writing, signed by the parties hereto, and no course of dealing between or among any parties hereto shall
be construed to alter any term hereof, except as expressly stated herein. No amendment to the Supply
Contract shall affect the rights and obligations of the Dealer hereunder (other than changing the price at
which gas is to be purchased by it hereunder) unless approved in writing by the Dealer. The Buyer shall
provide the Dealer and TMGC II with a copy of each such amendment promptly after execution thereof.
12. Severability. Except as otherwise stated herein, if any provision hereof or application
thereof shall be declared or rendered unlawful by a court of law or regulatory agency with jurisdiction
over any party hereto or deemed unlawful because of a statutory change, the remaining applications
thereof and provisions of this Addendum shall nevertheless remain valid and enforceable.
13. Corporate Obligations. No recourse under or upon any obligation, covenant, or
agreement contained in this Addendum, or for any claim based thereon or otherwise arising in respect
thereof, shall be had against any incorporator or sponsor, or against any past, present, or future director,
officer, employee, or member of the governing body, as such, of any party hereto or of any successor, or
against any person or entity with whom any such party has contracted for goods or services, any directly
or through such party, whether by virtue of any constitution or statute or rule of law, or by the
enforcement of any assessment, judgment, or penalty, or otherwise; it being expressly understood that this
Addendum is solely a corporate obligation, and that no such personal liability whatever shall attach to, or
is or shall be incurred by, the incorporators, sponsors, directors, officers, or employees, as such, of such
party or any successor, or any member of its governing body, or any such contracting person, or any of
them, by reason of the obligations, covenants, or agreements contained in this Addendum or implied
therefrom, and that any and all such personal liability any at common law or equity or by constitution or
statute of, and any and all such rights and claims against, every such incorporator, sponsor, member,
director, officer, employee, or person, as such, are hereby expressly waived and released as a condition of,
and in consideration for, the execution of this Addendum.
14, Govern,nent Regulation. The delivery and receipt of gas by the Dealer, the Buyer, and
the Supplier or their designees hereunder are subject to all valid laws with respect to the subject matter
hereof and to all valid present and future orders, rules, and regulations of duly constituted governmental
authorities having jurisdiction.
15. Benefits of Contract. Nothing in this Addendum, expressed or implied, shall give any
benefit or any legal or equitable right, remedy, or claim under this Addendum to any person or entity
other than the parties hereto, TMGC II, and their successors and assigns permitted hereby.
16. Effective Date. Notwithstanding the date hereof, this Addendum shall not become
operative or effective until the first day of the month following the later of (1) the effective date for
qualification of the Buyer as a "Participant" under the Exchange Agreement and (2) the first effective date
Lubbock Supplier Addendum 5
for designation of a "Dealer's Point of Receipt" under the Exchange Agreement. The Dealer shall notify
the Supplier in writing within three (3) days following the occurrence of such event.
17. Term and Termination. This Addendum shall extend for a period of 30 years unless
sooner terminated pursuant to this Section. This Addendum shall terminate on the earliest of (a) the
cancellation, termination, or expiration of the Supply Contract, (b) the extension, renewal, modification,
amendment, or replacement of the Supply Contract in a manner that adversely affects the rights and
obligations of the Dealer hereunder (other than by changing the price at which gas is to be purchased by it
hereunder) without the prior written approval of the Dealer, or (c) cancellation, termination, or expiration
of the Exchange Agreement or of the rights and obligations of the Buyer under the Cooperative Contract.
The Buyer, the Supplier, and the Dealer shall give the other parties notice of any such event which is
known to it and would result in the termination of this Addendum. In addition, the Supplier may
terminate this Addendum on account of any default by the Dealer in paying its obligations hereunder on
the same terms and conditions as the Supplier may terminate the Supply Contract on account of any such
default by the Buyer in paying its obligations thereunder. No such termination shall affect the obligations
of the Supplier to indemnify the Dealer.
[The remainder of this page is intentionally left blank]
Lubbock Supplier Addendum
IN WITNESS WHEREOF, the parties hereto have duly authorized and caused this Addendum to be
executed as of the date first hereinabove written in multiple originals.
Supplier's Addresses and Nos.:
ConocoPhillips Company
600 North Dairy Ashford
Houston, Texas 77079
Telephone: (281) 293-2203
Facsimile: (281) 293-3525
Internet: Mike.A. Luchetti(a-)conocophil lips. com
Dealer's Addresses and Nos.:
BP Energy Company
501 Westlake Boulevard
Houston, Texas 77079
Telephone: (281) 366-7845
Facsimile: (281) 366-0203
Internet:
Buyer's Addresses and Nos.:
City of Lubbock
P.O. Box 2000
Lubbock, Texas 79457
Telephone: (806) 775-2161
Facsimile: (806) 775-2164
Internet: iyates(a—),maii.ci.lubbock.tx.us
CON COP IL P Y S lier
By:..... . ..... ......
Na�'e: Michael 'A.*Lu ****"i
'ucp Title: Director, Texas
BP ENERGY CO ANY, as Dealer
By: .......
Name: . ...... .. ... ... ............................
.... ..........
Title: ... ....
..................................................................
CITY OF LUBBOCK, TEXAS,
LUBBOCK POWE LIGHT
, as Buyer
By: ...
Name: *David 'A.' Miller
Title: Mayor
Approved as to Content:
By:
Name&:ee Ann Dumbauld
Title: City Manager
Approved as tqForm:
By:..... �.F ... ........ &04 ..........
. Z. �. �.. C,
Name e
Title: Assistant City Attorney
Lubbock Supplier Addendum 7
Resolution No. 2006-RO252
June 8, 2006
Item No. 5.22
PARTICIPANT ADDENDUM NO. 1
This Addendum to that certain Gas Exchange and Annual Balancing Agreement, dated as
of January 1, 2006 (as amended from time to time, the "Exchange Agreement"), between Texas
Municipal Gas Corporation II ("TMGC II') and BP Energy Company, a Delaware corporation
(the "Dealer "), is entered into by such parties and the Participant designated herein to designate a
Participant, or one or more of such Participant's Buyer's Points of Receipt or a new Supply
Contract and Supplier for such Participant, all of which shall be as follows effective with the Day
that commences on the Effective Date specified below:
Participant:
Participant's Address:
Participant's Buyer's Point(s) of Receipt:
Effective Date:
Supplier:
Supplier's Address:
Supply Contract:
Supply Contract Expiration Date:
City of Lubbock, Texas
P.O. Box 2000
Lubbock, Texas 79457 (mailing address)
1625 131h Street
Lubbock, Texas 79401 (physical address)
(1) Northern Natural Gas and Power -Tex Pipeline
Interconnect POI #36383 located in Hockley
County, Texas or (2) Northern Natural Gas and
Power -Tex Pipeline Interconnect POI #2568
located in Hockley County, Texas or (3) OneOk
and Lubbock Power and Light's Post Lateral Line
Interconnection located in Lubbock County, Texas
or (4) any other mutually agreeable points.
June 8, 2006
ConocoPhillips Company
600 North Dairy Ashford
Houston, Texas 79079
Base Contract for Sale and Purchase of Natural Gas
Between ConocoPhillips Company and Lubbock
Power and Light dated April 1, 2005.
Contract may be terminated upon 30 days written
notice subject to the last delivery period of any
transaction(s).
This Addendum supersedes all prior addenda to the Exchange Agreement designating the same
Participant.
Lubbock Participant Addendum
Executed and delivered to be effective as of the above Effective Date.
BP ENERGY COMPANY TEXAS MUNICIPAL GAS CORPORATION II
... �e
OB y: .... ...... ...... ........ ........ By:.. .. ....
Name- ....... Name et iM&rbe
Title: .......... . ......................................................... Title: President
CITY OF LUBBOCK, TEXAS,
LUBBOCK POWER AND LIGHT
By: ............................ ..............................................
Name: David A. Miller
Title: Mayor
Approved as to Content:
By:
Name: ee i� au Title: City Manager
Approved as to Form:
By G4iGt ...........
Name: M tthew L. Wade
Title: Assistant City Attorney
Lubbock Participant Addendum
Resolution No. 2006-RO252
June 8, 2006
Item No. 5.22
PURCHASE CONTRACT
1. Joint Purchase Contract. The Buyer specified below hereby becomes a party to and,
except to the extent described herein, assumes all rights and obligations of a "Buyer" under the Joint Gas Purchase
Contract, dated as of January 1, 2006 (the "Joint Contract"), among TMGC II (specified below), the Agent
(specified below), and Local Governments and State Agencies, as therein defined, who become parties thereto, and
TMGC II and the Agent hereby consent thereto. The terms of the Joint Contract are hereby incorporated herein by
reference.
2. Category of Purchaser. The Buyer is [check and complete one or more]:
✓ a Requirements Buyer described in Section 6,03A(3) of the Joint Contract,
13 a Conditional Buyer described in Section 6.03A( J of the Joint Contract, and/or
✓ an Exempt Gas Buyer, because it will accept Exempt Gas to satisfy all or any part of its
Requirements without further action on its part.
3. Purchase of Gas. The Buyer agrees to receive and buy from the Agent, and the Agent
agrees to sell and deliver to the Buyer, at the Delivery Point, the Buyer's Nominated Quantities of Gas during the
term of this Purchase Contract, which shall not exceed the Buyer's Requirements in any Contract Year. The Buyer
agrees to nominate Gas for purchase so that it will buy from the Agent not less than the Buyer's Requirements in
any Contract Year (subject to the next paragraph), to the extent Gas is available for delivery to the Buyer under the
Joint Contract and except as otherwise provided therein, at the price specified below.
4. Maximum Annual Quantity. The Maximum Annual Quantity of Gas that the Buyer
agrees to nominate for purchase hereunder, up to its Requirements and subject to the conditions provided in the Joint
Contract, in each Contract Year is:
✓ its Requirements or
O as specified in Schedule A attached hereto.
5. Price. The Buyer will pay for all Gas purchased and received by it hereunder in any
period at a price equal to the Gross Price identified herein for such period less the Discount determined by TMGC II
in accordance with the Joint Contract and then in effect. The Buyer will be entitled to a partial rebate of such
payments when, as, and to the extent that rebates are declared by TMGC II under the Joint Contract.
6. Delivery and Gross Price. A Balancing Agreement between TMGC II and a Balancer
will be used by TMGC II to deliver Gas to the Buyer, unless otherwise agreed by TMGC II and the Buyer. One or
more of the Buyer's existing Suppliers have executed a Supplier -Exchanger Agreement with such Balancer. For so
long as such or any replacement Balancing Agreement and Supplier -Exchanger Agreement are in effect in respect of
the Buyer, the Buyer's Gross Price for each Day and Month will be the weighted average prices payable by the
Buyer (if a Requirements Buyer) under its Supply Contract with each such Supplier (or substitute Supplier which
has so agreed) or payable by the Balancer with the consent of the Buyer under a Supplier -Exchanger Agreement (if a
Conditional Buyer), for Gas delivered to the Buyer in such Day or Month, and the Buyer's Delivery Points will be
the points specified in such Supply Contracts with such Suppliers (if a Requirements Buyer) or in such Supplier -
Exchanger Agreements (if a Conditional Buyer), unless otherwise agreed by TMGC 1I and the Buyer. Thereafter,
the Buyer's Delivery Points and Gross Price will be as provided in the Joint Contract or as agreed to between them
in writing.
Lubbock Purchase Contract
Use. The Buyer will use all Gas purchased hereunder (or Gas exchanged therefor) [check
one or more]:
✓ in its electric utility system to generate electric power and/or
❑ in its gas utility system or enterprise and/or
❑ to secure a discount in the electric energy charges paid by it or (in the case of a political
subdivision corporation) its member buyers and/or
✓ for consumption in its (or for resale to other Local Governments and State Agencies for
consumption in their) other public facilities.
The Buyer agrees that all Exempt Gas sold and delivered to it under the Joint Contract will be consumed in, or to
produce electric energy consumed in, qualified service areas and qualified annexed areas and that no such Exempt
Gas will be used in a private trade or business or to make a private loan, as provided more fully and except as
permitted by Article Ten of the Joint Contract.
8. Address. The address of the Buyer for notices received under the Joint Contract is:
Chief Financial Officer Telephone No. (806) 775-2161
City of Lubbock Facsimile No. (806) 775-2164
P.O. Box 2000 Internet: iyates(a mail.ci.lubbock.tx.us
Lubbock, Texas 79457 (mailing address)
1625 13"' Street
Lubbock, Texas 79401 (physical address)
9. Special Provisions. [insert special provisions, if any]. None.
10. Term. This Purchase Contract shall commence on the Effective Date hereof, which is
the latest of the effective dates of the Balancing Agreement and initial Supplier -Exchanger Agreement referred to
above and June 8, 2006, and shall extend to December 31, 2025. The term of this Purchase Contract shall
automatically be extended by one year on each December 31, unless the Buyer, TMGC II, or the Agent has given
written notice to the other two parties of its election not to extend the term of this Purchase Contract prior to such
December 31, but in no event shall the term of this Purchase Contract be extended beyond December 31, 2036,
except by written amendment executed by the parties hereto. This Purchase Contract may be phased out at the
election of the Buyer as described in the Joint Contract.
The parties hereto have caused this Purchase Contract to be duly executed, effective as of the
Effective Date described above.
Lubbock Purchase Contract 2
Attest/Countersign:
�J ........
Name: Rebecca Garza
Title: City Secretary
Attest/Cpuntersign:
wm-
. ... ..............................
Name:.. .........................
n
..........................
Attest:
�..........................
Name: St!k.'I.nll4&........................
Title:........ ¢�J ...... e ......................
Lubbock Purchase Contract
BUYER:
CITY OF LUBBOCK, TEXAS
Name: David A. iller
Title: Mayor
Approved as to Content:
.............................
Name: ee Ann Dumbauld
Title: City Manager
Approved to Form:
............... I...........
Name: tat eew L. Wade
Title: Assistant City Attorney
AGENT:
CITY OF LA GRANGE, TEXAS
Byae:
.. .... ....... . "........... ..... .........................
Nanet MoerbeTitayor
TMGC II:
TEXAS MUNICIPAL GAS CORPORATION II
By:... ' .................................
N e: Janet Moerbe
Tit . President
3
Resolution No. 2006-RO252
June 8, 2006
Item No. 5.22
Schedule A to
Purchase Contract
The Buyer's Maximum Annual Quantity, if any, and projected Requirements (each expressed in MMBtus)
in each Contract Year are as follows:
Maximum Annual Quantity
Year
(if applicable)
2006
N/A
2007
N/A
2008
N/A
2009
N/A
2010
N/A
2011-2045
NIA
Lubbock Purchase Contract 4
Projected Requirements
96,700
100,000
100,000
100,000
100,000
100,000
SECRETARIAL CERTIFICATE OF BUYER
I, the undersigned City Secretary of the City of Lubbock, Texas (the "City"), acting in
my official capacity, do hereby certify as follows:
1. This Certificate is given in connection with the execution and delivery by the
City of a Purchase Contract (the "Purchase Contract") with the Texas Municipal Gas Corporation H
("TMGC IT') and the City of La Grange, Texas (the "Sponsor"), by which the City became a party to the
Joint Gas Purchase Contract, dated as of January 1, 2006, among TMGC H, the Sponsor, and other Texas
local governments that become parties thereto.
2. Execution and delivery of the Purchase Contract by the City has been duly
authorized by resolutions (the "Resolutions") adopted at a meeting of the City Council of the City held
June 8, 2006. A true and correct copy of the Resolutions is attached hereto. The Resolutions were duly
introduced and adopted at such meeting, such meeting was duly called and held, and notice of such
meeting and of the proposed action on the Resolutions was duly given, in accordance with the Open
Meetings Act, chapter 551, Texas Government Code, as amended; and such action has been recorded in
the minutes of such meeting.
3. The Purchase Contract has been authorized, executed, and delivered in
accordance with all legal requirements established by any charter or ordinance of the City.
4. The Purchase Contract was duly executed on behalf of the City by the following
person, who at the time of such execution held the office within the City specified opposite such person's
name below, and the signature appearing opposite such person's name below is the true and genuine
signature of such person:
Name Signature Office
David A. Miller Mayor
5. The Resolutions have not been repealed or amended.
SIGNED and SEALED this 8'' day of June, 2006.
ci
Rebecca Garza, City Secret
(SEAL)
The person whose name is subscribed to the foregoing Certificate is the duly appointed
and incumbent City Secretary of the City, and the signature subscribed above is such person's true and
genuine signature.
&.................................................................
Lee Ann Dumbauld, City Manager
Lubbock Secretarial Certificate
Resolution No. 2006-RO252
Robert D. Murphy, Jr
Executive Director
March 7, 2008
The Honorable David A. Miller
Mayor
Lubbock Power & Lilght
3500 Slaton Highway
Lubbock, TX 79404
Dear Mr. Miller:
Over the last eighteen months the MuniGas Program, through the Joint Gas Purchase
Contract ("Cooperative Contract") to which you are a party, has enjoyed significant
growth, including additional natural gas supplies and new municipal participants. Today
MuniGas proudly serves over 70 municipal utility systems across 16 states and this
success continues. Thank you for your contribution to the Program's success!
Given the Program's growth and requests from some of its loyal Buyers, and consistent
with the terms of the existing Cooperative Contract, we believe it is time to establish
Discounts based on classes of Buyers under the Cooperative Contract in order to ensure
(1) continued fair treatment of all Buyers and (2) the continued ability to contract for
accretive gas supply transactions that on occasion, due to tax and/or state laws, may
require allocations to only certain Buyer classes.
The attached memo provides detailed information on the Buyer class definitions. The
definitions distinguish between Contract Requirements of Long -Term, Short -Term and
Conditional Buyers and also distinguish between Texas and Non -Texas Buyers for those
situations dictated by state law restrictions. To enable MuniGas affiliates to acquire
Texas tax -advantaged production interests, MuniGas may not share the Texas tax
advantages with non -Texas Buyers. For this reason, the Purchase Contract between
MuniGas and Non -Texas Buyers specifies that such Buyers are not eligible to receive
natural gas produced from Texas mineral interest properties enjoying tax exemptions
from Texas state and/or local taxes (e.g. production and/or property taxes). By
eliminating a possible impediment to adding supply from Texas mineral interests,
MuniGas will be better able to meet the requirements of all Buyers without adversely
affecting the Discounts afforded to non -Texas Buyers. The proposed Discount classes
will enable MuniGas to isolate the Texas tax benefits to Texas Buyers, but only to the
extent that they exceed average benefits from all sources of supply.
Three Riverway — Suite 1950 • Houston, Texas 77056
Phone: (713) 888-3300 • Fax: (713) 888-0239
Establishing Discounts based on classes of Buyers under the Cooperative Contract is not
an amendment to the Cooperative Contract; however, Section 5.04 mandates that Buyers
with a majority of the Maximum Annual Quantities of all Buyers (or, for Buyers with
none, Requirements) of each class consent to establish classes of Buyers. This consent
form may be signed by any authorized signatory of your municipal utility system.
Upon review, please sign the consent below and return one original of the consent form
in the pre -addressed envelope. Should you have any questions, please contact Tony
Allison (713-888-3314), Justin Loweth (713-888-3306) or me. We would appreciate
your immediate attention to this matter and would request that your signed consent be
returned to MuniGas by March 20, 2008.
Sincerely,
CONSENT
The undersigned Buyer consents to the establishment of classes of Buyers as
detailed in the attached memo for purposes of setting Discounts.
Lubbock Power & Light
Signature:
Name: DAVID A. MILLER
Title: Mayor
Date: March 20, 2008
ATTEST:
Reb cca'Garza, City Secretary
Resolution No. 2006-RO252
Proposed Discounts Classes and Restrictions
MuniGas may establish different Discounts as defined in the Joint Gas Purchase Contract
dated January 1, 2006 (the "Cooperative Contract") for each Buyer class highlighted in
Figure 1: MuniGas Buyer Types below on the conditions described below.
Figure 1: MuniGas Buyer Types:
MuniGas Discount Classes (1)
Texas Non -Texas
Long -Term Long -Term
Buyer Buyer
Short -Term Short -Term
Buyer Buyer
Conditional Conditional
Buyer Buyer
(1) The Discount for both Texas and Non -Texas Buyers of each class shall be the same amount per
MMBtu except to the extent a Texas mineral interest transaction with state and/or local tax
benefits increases the Discount available to Texas Buyers.
Buvers Located within the State of Texas:
1. Long -Term Buyer Class. This class of Purchase Contract shall include Buyers
located within the State of Texas and meeting the definition of Long -Term Buyer as
defined in the Cooperative Contract. The Discount for both Texas and Non -Texas
Long -Term Buyers shall be the same amount per MMBtu except to the extent a Texas
mineral interest transaction with state and/or local tax benefits increases the Discount
available to Texas Buyers.
2. Short -Term Buyer Class. This class of Purchase Contract shall include Buyers
located within the State of Texas and meeting the definition of Short -Term Buyer as
defined in the Cooperative Contract. The Discount available to such Short -Term
Buyers will be 35% of the then current Discount for Long -Term Buyers located
within the State of Texas.
3. Conditional Buyer Class. This class of Purchase Contract shall include Buyers
located within the State of Texas and meeting the definition of Conditional Buyer as
defined in the Cooperative Contract. The Discount for such Conditional Buyer shall
be less than the then current Long -Term Buyer Discount for Buyers located within
the State of Texas.
Buyers Located outside the State of Texas:
4. Long -Term Buyer Class. This class of Purchase Contract shall include Buyers
located outside the State of Texas and meeting the definition of Long -Term Buyer as
defined in the Cooperative Contract. The Long -Term Discount for both Texas and
Non -Texas Buyers shall be the same amount per MMBtu except to the extent a Texas
mineral interest transaction with state and/or local tax benefits increases the Discount
available to Texas Buyers.
5. Short -Term Buyer Class. This class of Purchase Contract shall include Buyers
located outside the State of Texas and meeting the definition of Short -Term Buyer as
defined in the Cooperative Contract. The Discount available to such Short -Term
Buyers will be 35% of the then current Discount for Long -Term Buyers located
outside the State of Texas.
6. Conditional Buyer Class. This class of Purchase Contract shall include Buyers
located outside the State of Texas and meeting the definition of Conditional Buyer as
defined in the Cooperative Contract. The Discount for such Conditional Buyer shall
be less than the then current Long -Term Buyer Discount for Buyers located outside
the State of Texas.
Fa