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HomeMy WebLinkAboutResolution - 2003-R0555 - Comprehensive Settlement Agreement - Brownfield, Floydada, Tulia - 12/08/2003Resolution No. 2003-RO555 December 8, 2003 Item No. 45 a 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 Comprehensive Settlement Agreement between the City of Brownfield, the City of Floydada, the City of Lubbock, the City of Tulia, and the West Texas Municipal Power Agency, which is 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 8th ATTEST: D -j te'c -< e� , ��� , Reb cca Garza, City Secretary APPROVED AS TO CONTENT: Gary Zheng Chief Operations Officer APPROVED AS TO FORM: Matthew L. Wade Natural Resources Attorney as/ccdocs/Sett Agmt Res. November 26, 2003 day of lln.-n,e1,oT- �nn� Resolut on No. 2003-RO555 December 8, 2003 Item No. 45 COMPREHENSIVE SETTLEMENT AGREEMENT AMONG: CITY OF LUBBOCK CITY OF BROWNFIELD CITY OF FLOYDADA CITY OF TULIA WEST TEXAS MUNICIPAL POWER AGENCY WHEREAS, certain disputes and claims have arisen among the Cities of Lubbock ("Lubbock"), Brownfield (`Brownfield"), Floydada ("Floydada") and Tulia ("Tulia") and the West Texas Municipal Power Agency ("WTMPA"), sometimes collectively referred to as the "parties," relating to, without limitation, (1) the allocation among the parties of power and costs under power purchase contracts with third parties and the operation of WTMPA's J.R. Massengale Generation Unit No. 8 ("JRM No. 8") and Lubbock Power & Light's ("LP&L") Generation Units Nos. 6 and 7 ("Units 6 and 7"), all located at LP&L's J. Robert Massengale Station, formerly known as Plant No. 2; (2) composition and voting power of the Board of Directors of WTMPA, and (3) charges to WTMPA for expenses related to a period when JRM No. 8 was not operational; and WHEREAS, the Cities of Brownfield, Floydada, Lubbock, Tulia and the Board of Directors of WTMPA have reached agreements upon the issues generally described in the preceding paragraph and wish to formalize the agreements in a Comprehensive Settlement Agreement ("the Agreement") and unanimously agree that a negotiated resolution of issues is preferable to resolution by litigation; and WHEREAS, the parties believe the settlement terms hereafter set forth are in the public interest of their individual constituencies; NOW, THEREFORE, Brownfield, Floydada, Lubbock, Tulia and WTMPA agree as follows: Section l: JRM No. 8 AND LP&L'S UNITS 6 AND 7 Pursuant to and subject to the terms and conditions contained in the Capacity Operation and Transfer of Ownership Agreement, which is attached hereto as Exhibit "A" and incorporated herein as though set forth fully herein, the Parties hereby agree as follows: 1. WTMPA allocates exclusively to Lubbock all capacity and energy in JRM No. 8 and LP&L units 6 and 7 (collectively referred to as the "Facilities") until the West Texas Municipal Power Agency bonds, Series 1998, in the initial principal sum of $28,910,000, dated May 1, 1998 ("the Bonds") have been fully paid. 2. Lubbock shall be responsible for the operation and maintenance of JRM No. 8 and LP&L Units 6 and 7 and shall pay all fuel, labor, replacement, repair, improvement, 1278/31; pcd #130868v5; jwd/agrt/2sz805!.doc operational, required regulatory fees and penalties, insurance, administrative and maintenance costs of the Facilities. Brownfield, Floydada, Tulia or WTMPA shall bear no further responsibility or expense for the Facilities, save and except any non -delegable responsibility required by the terms and conditions of the Bonds and the WTMPA Amended Power Sales Contract dated April 1, 1998. 3. Beginning November 1, 2003, Lubbock shall pay WTMPA the full principal and interest expenses and any other existing or future costs associated therewith, of the Bonds. The phrase "and any other existing or future costs associated therewith, of the Bonds" includes, among other costs, maintenance of the "Bond Fund" as that term is defined under Section 4.3 of the Bond Resolution adopted on May 7, 1998, authorizing issuance of the Bonds. As of October 31, 2003, the amount in the Bond Fund was $ 1,229,827.56. It is agreed among all the Parties that Lubbock shall be entitled exclusively to the interest earned on any amount in the Bond Fund until the date all outstanding bonds are fully paid, inasmuch as Lubbock will be maintaining the Bond Fund at the Required Amount subsequent to the effective date of the Agreement. 4. Until the Bonds are fully paid, WTMPA shall retain ownership of JRM No. 8, and the capacity rights in LP&L Units 6 and 7. At such times as the Bonds and any bonds issued by WTMPA to refinance, redeem or otherwise retire the Bonds have been fully paid, WTMPA shall transfer title of JRM No. 8 and any capacity interest in LP&L Units 6 and 7 to Lubbock free and clear of any liens or other encumbrances, in consideration of Lubbock's satisfaction in full of all debt associated with the Bonds, otherwise for which WTMPA, and in the case of a default, the other member cities would be partially responsible for payment. 5. Brownfield, Floydada and Tulia hereby relinquish, release and transfer all contractual rights to the capacity and energy in the Facilities. 6. In consideration for the above described release and transfer of capacity rights, Lubbock releases, relinquishes, waives and forever discharges Brownfield, Floydada, and Tulia from any monetary or contractual claims which may have accrued prior to the execution of this Agreement, of any nature whatsoever relating to or anywise connected with payments made by Lubbock to third parties on behalf of WTMPA or its other member cities, allocations of charges among Lubbock and its other member cities relating to the Facilities, cost responsibilities under WTMPA purchased power agreements, services by Lubbock personnel staff on behalf of WTMPA and its other member cities, and any other claims whether asserted or not, directly or indirectly related to the relationship of Lubbock with WTMPA and its other member cities. Lubbock further agrees to release, relinquish, waive and forever discharge Brownfield, Floydada and Tulia from any capacity charges related to JRM No. 8, and LP&L Units 6 and 7, which may have accrued prior to the effective date of this Agreement. -2- Section 2: Purchased Power A. Purchased Power Allocation 1. Brownfield, Floydada, Lubbock and Tulia agree to furnish WTMPA with their individual annual requirements of power and energy in advance of each fiscal year of WTMPA. Upon written request, Lubbock agrees to schedule power purchases on behalf of WTMPA and its member cities under mutually agreed scheduling criteria and rules, to be billed to the Member cities quarterly. To the extent Brownfield, Floydada or Tulia do not schedule power as nominated, upon Lubbock's request, WTMPA may allocate to Lubbock either all or partially all of the power and energy not scheduled by Brownfield, Floydada and Tulia. 2. Each member city of WTMPA agrees to specifically nominate a specific portion of the firm power contracted for by WTMPA for which each member city shall be responsible for all charges associated therewith. Furthermore, regardless of whether a member city takes delivery of such power and energy specifically nominated, each member city shall be responsible for all demand or fixed charges imposed by the power supplier for their respective nominated portions of power and energy which WTMPA had contractually arranged for them. 3. Each member city of WTMPA hereby specifically nominates, in addition to their nominations for Schedule A power, the following firm power associated with the Schedule B firm power contract that is attached hereto as Exhibit `B": For the months of November and December 2003, January, February, March and April 2004: Brownfield: 2 MW Floydada: 1 MW Lubbock: Remainder of Schedule B MW Tulia: 1 MW For the months of May, June, July, August,ptember and October 2004: Brownfield: 5 MW Floydada: 2 MW Lubbock: Remainder of Schedule B MW Tulia: 2 MW For the months of November and December 2004: Brownfield: 2 MW Floydada: 1 MW Lubbock: Remainder of Schedule B MW Tulia: 1 MW -3- B. Assistance by Lubbock for Other Cities' Requirements In the event sufficient power is not scheduled to meet the requirements of Brownfield, Floydada or Tulia, Lubbock, to the extent it has or can acquire additional capacity, agrees to provide such power to the city or cities which are power -deficient at a price that is mutually agreeable and is based on the actual cost incurred by Lubbock in procuring or generating such power under standard economic dispatch rules. "Actual costs" shall include those costs directly associated with the furnishing of scheduling services. In addition, upon request, Lubbock shall assist WTMPA, if requested in writing, with the scheduling and purchasing of peaking power for the benefit of Brownfield, Floydada and Tulia. WTMPA shall pay Lubbock for the actual cost incurred by Lubbock in scheduling generation and purchasing power for the benefit of Brownfield, Floydada and Tulia. Lubbock shall bill WTMPA their actual cost for providing such assistance in the fiscal quarter in which the assistance is given. All bills by Lubbock shall be on a quarterly schedule and shall be mailed within fifteen (15) days of the end of the quarter. C. Information and Records Lubbock shall provide promptly to WTMPA all information requested of it by WTMPA in order for WTMPA to meet its responsibilities and to assure WTMPA that Lubbock is complying with its responsibilities under this Agreement. Typical information will include, without limitation, invoices for purchased power and hourly loadings for each member city, purchased power contracts and information concerning operations, repairs or improvements to JRM No. 8. Section 3: WTMPA Organizational Issues A. Abolition of the Position of "Chairman" Pursuant to and subject to the terms and conditions of the resolution attached hereto as Exhibit "C" and incorporated herein as though set forth fully herein, WTMPA's Board of Directors shall amend its Rules and Regulations to abolish the Office of Chairman of the Board and shall transfer the previous duties and responsibilities assigned to the Chairman to the President or presiding officer in the absence of the President. B. Retention of Voting Power by Member Cities The weight of the voting power of each member city of WTMPA under WTMPA's Rules and Regulations as of the date of this Agreement shall remain unchanged. However, nothing contained herein shall be construed as to prevent WTMPA from amending its Rules and Regulations in the future as determined necessary and prudent by WTMPA's board of directors. -4- C. WTMPA Office and Staff WTMPA shall establish an office and employ or contract with sufficient support staff, who, among other duties, shall be responsible for securing future power purchases, management of WTMPA's existing power purchase agreements, accounting, billings, collections and payment of WTMPA's obligations. Lubbock shall assist the manager of WTMPA or other member cities in contracting for additional sources of power and energy for WTMPA and its member cities. Section 4: Disputed Monetary Claims and Repeal of Prior Agreements A. Release of Claims by WTMPA, Brownfield, Floydada and Tulia WTMPA, Brownfield, Floydada and Tulia release, relinquish, waive and forever discharge Lubbock from any monetary or contractual claims which may have accrued prior to the execution of this Agreement, of any nature whatsoever relating to or anywise connected with the operation, management, administration, services or activities conducted by Lubbock on behalf of WTMPA, Brownfield, Floydada or Tulia relating to, in any manner, way or form with the Facilities, WTMPA purchased power agreements, services by Lubbock personnel staff on behalf of WTMPA and its other member cities, and any other claims whether asserted or not, directly or indirectly related to the relationship of Lubbock with WTMPA and Brownfield, Floydada and Tulia. B. INDEMNITY BY LUBBOCK TO THE OTHER MEMBER CITIES TO THE EXTENT AUTHORIZED BY LAW, WITHOUT LIMITATION, LUBBOCK INDEMNIFIES AND HOLDS HARMLESS BROWNFIELD, FLOYDADA AND TULIA FROM AND AGAINST ALL CLAIMS, DEMANDS OR CAUSES OF ACTION OF ANY CHARACTER WHATSOEVER, INCLUDING LITIGATION COSTS AND EXPENSES, COURT COSTS AND ATTORNEY(S)' FEES THAT MAY HEREAFTER BE BROUGHT BY ANY THIRD PARTY FOR ALLEGED DAMAGES FOR PERSONAL INJURY, PROPERTY, BREACH OF CONTRACT, WARRANTY, PATENT, CONSEQUENTIAL LOSSES (INCLUDING BUT NOT LIMITED TO LOST REVENUE, LOST PROFITS, DELAY COSTS AND EXPENSES, OR OTHER ECONOMIC LOSSES) ARISING OUT OF OR ANYWISE CONNECTED WITH LUBBOCK'S POSSESSION, MANAGEMENT, OPERATION AND MAINTENANCE OF JRM No. 8 AND LP&L UNITS 6 AND 7. D. Prior Power Agreements Repealed The Power Agreement by and between the City of Lubbock and the City of Brownfield entered into on April 23, 1998 (City of Lubbock Resolution 5828), the Power Agreement by and between the City of Lubbock and the City of Floydada entered into on April 23, 1998 (City of Lubbock Resolution 5829) and the Power Agreement by and between the City of Lubbock and the City of Tulia entered into on April 23, 1998 (City of -5- Lubbock Resolution 5831) are, by executing this Agreement, hereby repealed in their entirety. Section 5: General Provisions A. Cooperation of the Parties The parties all agree to cooperate in good faith to implement this Agreement in an expeditious manner including, without limitation, the termination or amendment of existing agreements inconsistent with this Agreement and the preparation of new agreements and resolutions embodying provisions to effectuate the requirements of this Agreement. B. Authority to Execute this Agreement The parties all represent and warrant that they are authorized by law to enter into this Agreement in every respect and represent that the signatory hereto on behalf of each party has been duly authorized by the governing bodies to execute the Agreement. C. Parties Fully Informed of the Terms and Conditions of Agreement The parties all acknowledge that they are fully informed of the terms and conditions of this Agreement, that they have been counseled by attorneys of their own choosing, that they fully understand the effects of this Agreement and that no promises or representations of any kind have been made to them by any of the parties to this Agreement, or by anyone acting for them, except as expressed herein. D. Drafted by All Parties This Agreement has been and shall be construed to have been drafted by all the parties to it so that the rule of construing ambiguities against the drafter shall have no force or effect. E. Severability If any portion of this Agreement is held unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall not be affected and shall remain fully in force and enforceable. F. Consultation Each party has consulted with whatever consultants, attorneys or other advisors the party deems appropriate concerning the effect of the Agreement and each respective party assumes the risk arising from not seeking further or additional consultation with such advisors. -6- G. Multiple Originals This Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original for all purposes. H. Jurisdiction and Venue It is further understood that the provisions of this Agreement are contractual and not mere recitals and that this Agreement shall be governed by and will be construed by the laws of the State of Texas and all obligations of the parties created by this Agreement are performable in Lubbock County, Texas. Venue for any action brought pursuant to this Agreement, or any activity contemplated hereby, shall lie exclusively in Lubbock County, Texas. Attorneys Fees If, as a result of either party's breaching this Agreement, the other party employs an attorney to enforce its rights under this lease, then the breaching or defaulting party will pay the other party the reasonable attorney's fee and costs incurred to enforce this Agreement. J. Settlement Purposes If this Agreement does not become effective for any reason, it shall be deemed negotiations for settlement purposes only and will not be admissible in evidence or usable for any purposes whatsoever. K. Effective Date Except as otherwise provided for herein, this Agreement shall take effect on the date that all parties have duly executed it as shown below. L. Bond Counsel This Agreement shall be submitted to WTMPA's bond counsel and the implementation of this Agreement shall not commence until bond counsel has advised in writing that there is no conflict with the terms and conditions of the Bond Resolution. AGREED BY�PARTIES: City of Lubbock DATE OF EXECUTION: -7- z A c4 Nan y Wade/Mayor City of Bro nfield Bobby Gilli nd, Myr City of Flo dada 660c, 45 4., - IACC* 4-- Boyd Vaughn, Mayor City of Tulia Gary Brow President West Texas Municipal Power Agency /--'�-7— C'V � 3 -ado Y - ')L 7 - -j- oo Sc -8- Resolution No. 2003-RO555 Exhibit A CAPACITY OPERATION AND TRANSFER OF OWNERSHIP AGREEMENT BETWEEN THE CITY OF LUBBOCK AND THE WEST TEXAS MUNICIPAL POWER AGENCY RELATING TO J.R. MASSENGALE GENERATION UNIT NO.8 This Capacity Operation and Transfer of Ownership Agreement ("the Agreement") between West Texas Municipal Power Agency ("WTMPA"), a municipal corporation and political subdivision of the State of Texas, and the City of Lubbock ("Lubbock"), a municipal corporation and home rule city situated in Lubbock County, Texas (collectively WTMPA and Lubbock may be referred to as the "Parties" or individually as a "Party"). WITNESSETH: WHEREAS, WTMPA acquired, constructed and installed a 40 megawatt (MW) combustion turbine generator known as J. Robert Massengale generation Unit No. 8 ("JRM No. 8") and financed the repowering of Lubbock's two identical 22 MW Westinghouse non -reheat, condensing steam turbine generators known as Unit 6 and Unit 7, (collectively sometimes referred to as the "Facilities"), all located at Lubbock Power & Light's ("LP&L's") Massengale Station, formerly known as Plant No. 2 ; and WHEREAS, Lubbock previously dedicated the 22 MW power capacity of either LP&L's Unit 6 or Unit 7 to WTMPA, the other unit being maintained as a reserve or back-up source for WTMPA, pursuant to a Power Capacity Agreement entered into by the Parties on April 23, 1998 via City of Lubbock Resolution 5826, in exchange for WTMPA providing the funds to finance the repowering of Unit 6 and Unit 7; and WHEREAS, Lubbock operates and maintains JRM No. 8 and Units 6 and Unit 7 for and on behalf of WTMPA pursuant to an Operation Management Agreement entered into by the Parties on April 23, 1998 via City of Lubbock Resolution 5827, in exchange for WTMPA paying Lubbock for the operation and management of JRM No. 8 and Unit 6 and Unit 7; and WHEREAS, Lubbock and WTMPA have entered into a Comprehensive Settlement Agreement ("CSA"), together with the Cities of Brownfield ("Brownfield"), Floydada ("Floydada") and Tulia ("Tulia"), sometimes referred to as "the other member cities;" and WHEREAS, pursuant to the CSA, WTMPA has agreed to allocate and dedicate to Lubbock both the capacity of its JRM #8 and the capacity of Lubbock's Units 6 and 7; and WHEREAS, pursuant to the CSA, WTMPA further has agreed to transfer title and ownership to Lubbock of JRM No. 8 and its capacity rights to Lubbock Units 6 and 7 at such time as WTMPA's Bonds, Series 1998, in the initial sum of $28,910,000, dated May 1, 1998 ("the Bonds") and subsequent bond issues refinancing the Bonds, have been fully paid. In consideration among other considerations, stated in the CSA, Lubbock will pay (1) all principal, interest and any related charges of the Bonds; (2) will pay all costs related to JRM No.8 and 1278/31; pcd 129874v12; jwd/agrt/2s7m012!.doc Units 6 and 7; and (3) release Brownfield, Floydada, Tulia and WTMPA from any further responsibility or expenses for the Facilities and claims for monetary debts claimed to be owed to Lubbock related to the operation of the Facilities; and WHEREAS, Lubbock and WTMPA will implement the actions referenced to in the above recitals in this Agreement; and WHEREAS, WTMPA and Lubbock believe it to be in the best interest of each respective Party to repeal the Power Capacity Agreement and the Operation Management Agreement in their entirety and replace these agreements with this Agreement; NOW, THEREFORE, for the mutual consideration and under terms and conditions hereafter set forth, LUBBOCK and WTMPA agree as follows: SECTION I A. Transfer of Capacity to Lubbock Effective at 12:01 a.m. November 1,2003, WTMPA shall allocate and dedicate to Lubbock, exclusively, all of WTMPA's capacity in the Facilities, free and clear of any rights to the capacity by the other member cities of WTMPA. B. Term of Transfer The allocations referenced in Section I.A above shall terminate on the date the Bonds and any subsequent bonds issued to refinance the Bonds have been fully paid ("the Term'). C. Assignment of Capacity Allocated to Lubbock Lubbock shall have full power and authority to assign the capacity in the Facilities, in whole or in part, to a wholesale electric provider, including, without limitation, another electric utility, independent power producer or GENCO, provided (1) prior thereto WTMPA must approve in writing the assignment, which approval will not be unreasonably withheld, (2) WTMPA's bond counsel advises WTMPA in writing that the proposed assignment by Lubbock does not jeopardize the tax exempt status of the Bonds or otherwise subject WTMPA to any penalties and (3) Lubbock shall remain responsible to WTMPA for all its obligations and responsibilities under this Agreement and the CSA. D. Maintenance Responsibility of the Facilities Effective upon the date of transfer stated in Section I.A, Lubbock shall maintain the Facilities, including improvements and replacements, in good working condition and operate the Facilities in accordance with Good Utility Practice and all applicable laws, rules and regulations during the Term. Lubbock shall obtain and maintain in current status all required permits for the Facilities. To assist Lubbock in its maintenance responsibilities for the Facilities, subsequent to the date of transfer, WTMPA will contribute to Lubbock the funds currently deposited in its -2- Bond Reserve Fund, approximating $ 177,072.35, for the purpose of maintenance and repair of the Facilities. E. Good Utility Practice The term "Good Utility Practice" shall mean any of the engineering and operating practices, methods and acts engaged in or accepted by a significant portion of the electric utility industry in the United States of America at the time the decision was made or any of the practices, methods and acts that, in the exercise of reasonable judgment in the light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at the lowest reasonable costs consistent with reliability, safety and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather includes a spectrum of possible practices methods or acts. F. Costs of Operation and Maintenance of the Facilities Effective on the date of transfer stated in Section I.A, Lubbock shall be responsible, exclusively, during the Term for payment of all costs of operation and maintenance, including, without limitation, fuel, labor, repair, replacements, improvements, insurance, permits, regulatory and legal proceedings, reports to governmental agencies and compliance with environmental directives. It is the intent of this Section I.F that neither WTMPA or the other member cities shall have any cost responsibility of any nature whatsoever for the Facilities during the Term. G. INDEMNITY BY LUBBOCK TO WTMPA TO THE EXTENT AUTHORIZED BY LAW, AND WITHOUT LIMITATION, LUBBOCK INDEMNIFIES AND HOLDS HARMLESS WTMPA FROM AND AGAINST ALL CLAIMS, DEMANDS OR CAUSES OF ACTION OF ANY CHARACTER WHATSOEVER, INCLUDING LITIGATION COSTS AND EXPENSES, COURT COSTS AND ATTORNEY(S)' FEES THAT MAY HEREAFTER BE BROUGHT BY ANY THIRD PARTY FOR ALLEGED DAMAGES FOR PERSONAL INJURY, PROPERTY, BREACH OF CONTRACT, WARRANTY, PATENT, CONSEQUENTIAL LOSSES (INCLUDING BUT NOT LIMITED TO LOST REVENUE, LOST PROFITS, DELAY COSTS AND EXPENSES, OR OTHER ECONOMIC LOSSES) ARISING OUT OF OR ANYWISE CONNECTED WITH LUBBOCK'S POSSESSION, MANAGEMENT, OPERATION AND MAINTENANCE OF JRM No. 8 AND LP&L UNITS 6 AND 7. HOWEVER, THIS INDEMNIFICATION DOES NOT APPLY TO ANY CLAIM, DEMAND OR CAUSE OF ACTION CAUSED SOLELY BY BREACH OF THIS AGREEMENT BYWTMPA, OR BREACH OF THE CSA BY WTMPA OR CAUSED SOLELY BY THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF WTMPA. sm SECTION II A. Ownership Transfer to Lubbock On the date the Bonds, and any bonds issued by WTMPA to refinance, redeem or otherwise retire the Bonds, have been fully paid, title to JRM No. 8 and any capacity interest in LP&L Units 6 and 7 shall vest in Lubbock. WTMPA shall provide any reasonable documentation requested by Lubbock to memorialize the sale. B. Payment of Bond Debt Lubbock shall pay WTMPA the full principal and interest expenses, and any other existing or future costs associated therewith, of the Bonds. The phrase "and any other existing or future costs associated therewith, of the Bonds" includes, among other costs, maintenance of the "Bond Fund as that term is defined under Section 4.3 of the Bond Resolution adopted on May 7, 1998, authorizing issuance of the Bonds. As of September 30, 2003, the amount in the Bond Fund was $ 1,006,944.41. It is agreed among all the Parties that Lubbock shall be entitled exclusively to the interest earned on any amount in the Bond Fund until the date all outstanding bonds are fully paid, inasmuch as Lubbock will be maintaining the Bond Fund subsequent to the effective date of the Agreement. Lubbock's payments shall be made monthly in equal payments for deposit in the Bond Fund established in the Bond Ordinance authorizing issuance of the Bonds and in sufficient advance time for WTMPA to transfer payments received from Lubbock to its Paying Agent for timely payment of principal and interest to the bondholders and to pay timely ancillary or miscellaneous expenses, if any, associated with maintenance of the Bonds. C. Release of Responsibilities for JRM No. 8 On the effective date of transfer of capacity in the Facilities to Lubbock, WTMPA, Brownfield, Floydada and Tulia shall have no further responsibility or expense associated with the Facilities, save and except any non -delegable responsibility required by the terms and conditions of the Bonds and the Amended Power Sales Agreement, 1998, among WTMPA, Brownfield, Floydada and Tulia. D. INDEMNITY BY LUBBOCK TO WTMPA TO THE EXTENT AUTHORIZED BY LAW, COMMENCING ON THE DATE OF THE CAPACITY TRANSFER STATED IN SECTION IA, LUBBOCK INDEMNIFIES AND HOLDS HARMLESS WTMPA FROM ANY OBLIGATION OF ANY NATURE WHATSOEVER RELATING TO OR ANYWISE CONNECTED WITH PRINCIPAL AND INTEREST PAYMENTS AND OTHER ASSOCIATED EXPENSES, IF ANY, FOR THE BONDS, AND FAILURE TO MAINTAIN AND OPERATE THE FACILITIES IN ACCORDANCE WITH SECTION I.D and I.E. E. INDEMNITY BY WTMPA TO LUBBOCK TO THE EXTENT AUTHORIZED BY LAW, WITHOUT LIMITATION, WTMPA INDEMNIFIES AND HOLDS HARMLESS LUBBOCK FROM AND AGAINST ALL CLAIMS, DEMANDS OR CAUSES OF ACTION OF ANY CHARACTER WHATSOEVER, INCLUDING LITIGATION COSTS AND EXPENSES, COURT COSTS AND ATTORNEY(S)' FEES THAT MAY HEREAFTER BE BROUGHT BY ANY THIRD PARTY FOR ALLEGED DAMAGES FOR VIOLATION OF ANY BOND COVENANT RELATED TO WTMPA'S BONDS, SERIES 1998, INCLUDING ANY REFINANCING THEREOF, OR ANY BREACH OF CONTRACT ASSOCIATED WITH WTMPA'S BONDS, ARISING OUT OR OTHERWISE CAUSED SOLEY BY ACTIONS OR INACTIONS OF WTMPA. HOWEVER, THIS INDEMNIFICATION DOES NOT APPLY TO A VIOLATION OF ANY BOND COVENANT RELATED TO WTMPA'S BONDS, SERIES 1998, INCLUDING ANY REFINANCING THEREOF, OR ANY BREACH OF CONTRACT ASSOCIATED WITH WTMPA'S BONDS, CAUSED SOLELY BY A BREACH OF THIS AGREEMENT OR A BREACH OF THE CSA BY LUBBOCK. SECTION III Force Maieure Neither Party shall be liable to the other Party for failure to perform its obligations under this Agreement, other than payment of money, when such failure is attributable solely to Force Majeure. Force Majeure shall mean any cause beyond the reasonable control of either Party, including, without limitation, failure, or imminent threat of failure, of facilities or equipment, flood, freeze, earthquake, storm, fire, lightning, other acts of God, epidemic, war, acts of a public enemy, riot, civil disturbance or disobedience, strike, lockout, work stoppages, other industrial disturbance or dispute, labor or material shortage, sabotage, restraint by court order or other public authority, and action or nonaction by, or failure or inability to obtain the necessary authorizations or approvals from, any government agency or authority, which by the exercise of due diligence it could not overcome. Nothing contained herein shall be construed so as to require the Parties to settle any strike, lockout, work stoppage or any industrial disturbance or dispute in which it may be involved, or to seek review of or take an appeal from any administrative or judicial action. SECTION IV Default (1) As used in this Section IV, "default" shall mean the failure of WTMPA or Lubbock to perform any obligation in the time and manner required by this Agreement, except where such failure to discharge obligations (other than the payment of money) is the result of Force Majeure as defined in Section III hereof. -5- (2) Upon failure of a Party hereto to perform any obligation required hereunder, the other Party shall give written notice of such default to the Party in default. The Party in default shall have thirty (30) days within which to cure such default, other than payment of money, which default must be cured within five (5) business days from the date of notice and, if cured within such time, the default specified in such notice shall cease to exist. (3) If a default is not cured as provided in paragraph (2) above, the Party not in default may resort to all remedies available at law or equity, including, without limitation, recovery of reasonable expenses and reasonable attorneys' fees incurred in connection therewith, termination of this Agreement and repossession of property. SECTION V Governing Law and Venue The validity, interpretation and performance of this Agreement and each of its provisions shall be governed by the laws of the State of Texas. Venue for any litigation arising out of a dispute under this Agreement shall lie in Lubbock County, Texas. SECTION VI Repeal of Power Capacity Agreement and Operation Management Agreement WTMPA and the City, by executing this Agreement, hereby repeal in its entirety, the Power Capacity Agreement entered into by the Parties on April 23, 1998 (City of Lubbock Resolution 5826). Further, WTMPA and the City, by executing this Agreement, hereby repeal in its entirety, the Operation Management Agreement entered into by the Parties on April 23, 1998 (City of Lubbock Resolution 5827). SECTION VII Miscellaneous A. Notice. Any notice, request, demand or statement which may be given to or made upon a Party hereto by the other Party hereto under any of the provisions of this Agreement shall be in writing, unless it is specifically provided otherwise herein, and shall be treated as duly delivered when deposited in the United States Mail, by certified mail, postage prepared, and properly addressed to the Party to be served, as follows: If the notice is to the City of Lubbock: City Manager City of Lubbock Attn: Lubbock Power & Light/WTMPA 9 Me P.O. Box 2000 Lubbock, Texas 79457 If the Notice is to WTMPA: West Texas Municipal Power Agency Attn: President of WTMPA P.O. Box 10 Floydada, Texas 79235; The names, titles and addresses of either Party in this section may be changed by written notification to the other Party. B. Counterparts. This Agreement shall be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. C. Amendments. This Agreement may only be amended by a writing signed by both Parties. D. Severability. In the event any material term, covenant or condition of this Agreement, or any amendment hereto, or the application of any such term, covenant or condition shall be held invalid, illegal or unenforceable as to any Party or circumstances by any court or regulatory authority having jurisdiction, WTMPA and Lubbock shall conduct good faith negotiations for the purpose of reaching a mutually acceptable written agreement to replace the deleted provision(s) with provision(s) that will most nearly accomplish the purpose and intent of the deleted provision(s). If any portion of this Agreement is held unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall not be affected and shall remain fully in force and enforceable. E. Computation of Time. In computing any period of time prescribed or allowed by this Agreement, the day of the act, event or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included unless it is a Saturday, Sunday or legal holiday, in which event the period shall run until the end of the next business day that is neither a Saturday, Sunday nor a legal holiday. -7- F. Limitation. This Agreement is not intended to and shall not create rights of any character whatsoever in favor of any person, corporation, association or entity other than the Parties to this Agreement and the member cities of WTMPA, and the obligations herein assumed are solely for the use and benefit of the Parties to this Agreement and the member cities of WTMPA, their successors in interest, or assigns. G. Waivers. A waiver by a Party of a default by the other Party shall not be deemed a waiver of any other or subsequent default. H. Regulation. This Agreement is subject to applicable federal, state and local laws, ordinances, rules and regulations. Save and except the provisions outlined in Section V, nothing herein contained shall be construed as a waiver of any right to question or contest any such law, ordinance, rule, regulation or asserted regulatory jurisdiction. I. Relationship of Parties The Parties shall not be deemed in a relationship of partners or joint venturers by virtue of this Agreement, nor shall either Party be an agent, representative, trustee or fiduciary of the other. Neither Party shall have any authority to bind the other to any agreement. I Survivorship of Provisions Section I.G shall survive the expiration of the Term of this Agreement, or earlier termination of this Agreement, for a period of four (4) years from the date of expiration or other termination. K. Drafted by All Parties This Agreement has been and shall be construed to have been drafted by all the parties to it so that the rule of construing ambiguities against the drafter shall have no force or effect. L. Consultation Each party has consulted with whatever consultants, attorneys or other advisors the party deems appropriate concerning the effect of the Agreement and each respective party assumes the risk arising from not seeking further or additional consultation with such advisors. M. Settlement Purposes If this Agreement does not become effective for any reason, it shall be deemed negotiations for settlement purposes only and will not be admissible in evidence or usable for any purposes whatsoever. N. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be binding upon the successors and assigns of the Parties hereto. O. Entire Agreement This Agreement shall constitute the entire agreement and understanding between WTMPA and Lubbock related to the subject matter hereof and supercede any prior agreement or document of understanding related to the subject matter hereof. P. Bond Counsel Approval This Agreement shall be submitted to WTMPA's bond counsel and the implementation of this Agreement shall not commence until bond counsel has advised in writing that there is no conflict with the terms and conditions of the Bond Resolution. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed this day of , 2003. CITY OF LUBBOCK WEST TEXAS MUNICIPAL POWER AGENCY Marc McDougal, Mayor ATTEST: Rebecca Garza, City Secretary APPROVED AS TO CONTENT: Gary Zheng, 61 Lubbock Power & Light Chief Operations Officer En Gary Brown, President ATTEST: Eldon Job, Secretary -Treasurer APPROVED AS TO FORM: Matthewtt. Wade, Natural Resources Attorney -10- Resolution No. 2003-RO555 Exhibit B 1 0 6 11� 1�� 11 I I 1 TRANSACTION,AGREEM ENT between West Teams Municipal Power Agency and Southwestern Public Service Company d/b/a Xcel Energy Ci This Transaction Agreement, entered into and effective as of the -2114 day of , 2002, shall form and effectuate the current proposal between West Texas Municipal Power Agency (the "Customer" or "WTMPA") and Southwestern Public Service Company d/b/a Xcel Energy (the "Company" or "SPS") regarding the purchase and sale of Power under the following terms and conditions: This Transaction Agreement is being provided pursuant to and in accordance with the Master Power Purchase and Sale Agreement dated March 24, 2000 (the "Master Agreement") between the Customer and the Company, and constitutes part of and is subject to all of the terms and provisions of such Master Agreement. Terms used but not defined herein shall have the meanings ascribed to them in this Master Agreement. Any conflict between the terms of the Master Agreement and this Transaction Agreement shall be resolved in favor of this Transaction Agreement. Section 1 - Supplemental Power Service 1.1 The Customer agrees to purchase and Company agrees to provide, during the term of this Transaction Agreement, Supplemental Power Service in the amount of: January -February, 2003 45MW May, 2003 40 MW October, 2003 30 MW December, 2003 50 MW January -February, 2004 45MW May, 2004 40 MW October, 2004 30 MW December, 2004 50 MW March -April, 2003. 30 MW June -September, 2003 66 MW November, 2003 40 MW March -April, 2004 30 MW June -September, 2004 78 MW November, 2004 40 MW 1.2 The term "Supplemental Power Service" shall mean that quantity of firm capacity and associated energy that the Company will make continuously available to the Customer. The Company cannot curtail scheduled Supplemental Power Service energy ("Scheduled Energy") for economic reasons, although the Company can curtail Scheduled Energy for reasons of Force Majeure, or in times of system emergencies on the Company's RFP #271-01/RS I Southwestern Public Service Company d/b/a Xcel Energy Electric Energy and Capacity for Lubbock Power &Light Transaction Agreement i 1, I I 1 I a JJJJJ I "_ The current transmission and -ancillary service charges are as follows: Transmission Losses: Adjusted monthly by SPP OATT Energy Imbalance Service: SPS OATT Schedule 4 Firm Point -to -Point Transmission: $1.380/kW month Scheduling & Dispatch: $0.019/kW-month Reactive Supply & Voltage Control: $0.094/kW-month Regulation & Frequency Response: $0.0329/kW-month Spinning Reserves: $0.2769/kW-month Supplemental Reserves: $0.0736/kW-month SPP Administration Fee $0.20/MW-hour Section 4 - Scheduling 4.1 The Customer may schedule Supplemental Power Service by notifying the Company by 9:00 a.m. CPT for all energy to be delivered for the following prescheduled day(s) ("Day Ahead Schedule'). Any schedule changes will be limited to three per 24-hour period, one per 8-hour shift, and SPS will not be liable for energy imbalances. These terms and conditions may be incorporated into a separate scheduling agreement. SPS will not provide power scheduling and tagging services for any power sales from unaffiliated third parties. Transmission scheduling and services will be in accordance with its non- discriminatory open access transmission tariff. Section 5 - Delivery Point 5.1 The Company shall deliver Scheduled Energy to the Customer at the interconnection between SPS and WTMPA, unless otherwise mutually agreed to by the Parties. The Company shall be responsible for arranging transmission to the Delivery Point. Section 6 - Transmission Loading Relief 6.1 Neither the Customer nor the Company shall be in default of this Transaction Agreement for failure by the Company to deliver Scheduled Energy, or by the Customer to receive Scheduled Energy, due to transmission loading relief procedures ("TLR"), or other procedures that may prevent the delivery or receipt of Scheduled Energy, implemented by Transmission Providers. Section 7 - Confidentiality All terms and conditions described in this proposal are confidential between Company and Customer, their respective affiliates-, representatives and duly appointed agents. RFP #271-01/RS Southwestern Public Service Company d/b/a Xcel Energy Electric Energy and Capacity for Lubbock Power &Light Transaction Agreement CONFIDENTUL DOCUN043 Section 8 - Signature f The signatories hereto represent that they have been appropriately authorized to enter this Transaction Agreement on behalf of the Party for whom they sign. This Transaction Agreement is executed as of the date first above written. WES' By: Printec Title: AGENCY SOUTHWESTERN PUBLIC SERVICE COMPANY I� Printed Name: Kelly Krattenmaker Title: Vice President Trading. Marketing and Supply Xcel Energy. Energy Markets agent for Southwestern Public Service Company "P #291-01/RS Southwestern Public Service Company d/b/a Xcel Energy Electric Energy and Capacity for Lubbock Power &Light Transaction Agreement Proposed FIRST AMENDMENT To The TRANSACTION AGREEMENT Between West Texas Municipal Power Agency and Southwestern Public Service Company This is an amendment to the Transaction Agreement, dated March 29, 2002, between West Texas Municipal Power Agency ("WTMPA") and Southwestern Public Service ("SPS" ). WTMPA and SPS each may hereinafter be referred to individually as a "Party" and collectively as the "Parties". In consideration of the mutual covenants and promises between the Parties agree to amend the Transaction Agreement as follows: Section 1. Supplemental Power Service 1.1 The amount of firm energy and capacity for May, 2003 shall be 71 MW and June — September, 2003 shall be 97 MW. Section 3. Rates for Supplemental Power Service 3.1 The Demand Charge shall be $9.49/kW-month for the months of June, July, August, September, 2003. The Demand Charge for May, 2003 shall be $8.60/kW- month. The Demand Charge for all remaining months of 2003 shall remain at $4.80/kW-month Comments: The proposed draft sheet is intended to serve as a basic statement of the current intentions of the parties in connection with the arrangements contemplated within. Prices indicated are subject to current market prices and subject to change as market conditions change. Capacity and/or energy currently available under these terms is subject to prior sale. This letter is not to be construed as a complete integration of any agreement and does not constitute a binding agreement by either party. This letter simply expresses a good faith intention to proceed with discussions and investigation of possible business arrangements between both parties. This proposed offer is valid until January 31,2003. 1 Resolution No. 2003-RO555 Exhibit C A RESOLUTION of the Board of Directors of West Texas Municipal Power Agency approving and adopting amended Rules and Regulations of such Agency. WHEREAS, the West Texas Municipal Power Agency (the "Agency") was created pursuant TEX. UTIL. CODE ANN. §§163.051-163.068,163.101-163.102 (Vernon 1998 and Supp. 2002), which provides that the Agency may adopt, and from time to time amend, rules and regulations to govern the operaton of the Agency, its employees, facilities and services; and WHEREAS, the Board of Directors ("Board") of the Agency desires to amend its Rules and Regulations to reflect appropriate changes; and WHEREAS, the Board has and does hereby determine that such action is in the best interest of the Agency; now, therefore, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF WEST TEXAS MUNICIPAL POWER AGENCY: SECTION 1: That the amended Rules and Regulations of the Agency, attached hereto as Exhibit A, are hereby approved and adopted. ' SECTION 2: This Resolution shall take effect immediately upon and after its adoption. PASSED and APPROVED this 18th day of December, 2003. President, B rd of Directors WEST TEXAS MUNICIPAL POWER AGENCY ATTEST: Secretary, B and of Directors WEST TEXAS MUNICIPAL POWER AGENCY Pcd #132316; jwd/misc/2%3g01!.doc