Loading...
HomeMy WebLinkAboutResolution - 2499 - Agreement - EPR Inc - Electric Power Purchase - 01/08/1987JPB: js RESOLUTION Resolution #2499 January 8, 1987 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, an Energy Pur- chase Agreement between the City of Lubbock and Environmental Protection Re- sources, Inc., attached herewith, which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 8th day of January , 1987. B. C. McMINN, MAYOR ATTEST: Ranette Boyd, City Secretary APPROVED AS TO CONTENT: Bob Cass, Deputy City Manager APPROVED AS TO FORM: es P. Brewster, Civil Trial Attorney ENERGY PURCHASE AGREEMENT This Energy Purchase Agreement, made and entered into by and between the City of Lubbock, Texas, a municipal corporation (hereinafter referred to as the "City") and Environmental Protection Resources of Lubbock, Inc., a Texas corporation (hereinafter referred to as "the Service Provider"), is as follows: WHEREAS, the parties hereto have heretofore entered into a Waste Services Processing Contract which will provide for the conversion of combustion waste provided by the City and other sources into electric power; and WHEREAS, the parties hereto have determined that each of them can realize substantial benefits through waste to energy processing and the sale of electric energy to the City under the terms of this agreement; NOW THEREFORE, for and in consideration of the premises and the covenants and agreements hereinafter set forth, the parties hereto agree as follows: ARTICLE I FACILITIES TO BE PROVIDED Section 1.1. The Service Provider will design and construct a resource recovery plant with the capacity to produce approximately 10 megawatts of electric power. The City will lease a portion of the existing Lubbock Power and Light Generating Plant Number 2, as more fully described in that one certain Lease Agreement entered into by the parties hereto on even date herewith (hereinafter known as the Facility) to the Service Provider for such purpose, on such terms and conditions as may be mutually agreeable. ARTICLE II METERING Section 2.1 The Service Provider will provide, maintain and operate, at its expense, metering equipment for proper indication of electric energy flow to the City. The amounts of electric energy supplied to the City in accordance with the terms of this agreement shall be determined by the metering facilities as hereinabove described. Section 2.2 Metering equipment shall be tested by the Service Provider in accordance with all applicable standards published by the American National Standards Institute. If any meter test requested by the City other than those tests normally performed by the Service Provider discloses metering equipment to be registering outside acceptable limits of accuracy (la above or below comparison with calibrated standards), then the Service Provider shall bear the expense of such tests; otherwise, the expense of such tests shall be borne by the City. Representatives of the City shall be afforded the opportunity to be present at all tests. Section 2.3 If any metering test discloses that a meter is in error by more than plus or minus one per cent (+ or -1%) the account between the parties hereto shall be adjusted by the Service Provider to correct the full percentage of inaccuracy. Such adjustment shall be made for a maximum period of six (6) months prior to the date of such test or for the period during which such inaccuracy may be determined to have existed, whichever period is shorter. If any metering equipment, at any time, fails to register, or if the registration thereof is so erratic as to be meaningless, all electric energy delivered to the City during such period of time shall be determined by the Service Provider and the City from the City's metering equipment, or if there is not data available from the City's meters, the best available data. Section 2.4 The City shall have the right, at any time, to install its own metering equipment at its sole expense for the purpose of checking the meters installed by the Service Provider. The installation of any such metering equipment shall be done at such time and in such a manner so as to cause no interference with Service Provider's operations or the delivery of electric energy pursuant to this agreement. ARTICLE III AGREEMENT TO PURCHASE, RATES AND TERMS Section 3.1 The City hereby agrees to purchase from the Service Provider any and all electric energy which the Service Provider produces and delivers to the City at the delivery point, up to a maximum of eighty-five (85) million kilowatt hours annually. Section 3.2 Electric energy supplied to the City pursuant to this agreement shall be purchased by the City in accordance with the rates set forth in Service Schedule A. ARTICLE IV DELIVERY POINT Section 4.1 The delivery point (hereinafter called "delivery point") of electric energy provided for hereunder shall be the point where the Service Provider's facilities connect to the City's facilities. 2 ARTICLE V REACTIVE AMPERES Section 5.1 The parties hereto acknowledge that certain operational and technical problems may arise in the control of the flow reactive amperes. It is, therefore, agreed that the operating department of both of the parties hereto, through their duly authorized representatives, shall cooperate with each other in such matters, so that, as nearly as practicable, the delivery and receipt of electric energy shall be accomplished with the least interference with the respective systems of each party. During the term of this agreement, or any extension thereof, the Service Provider shall be obligated to provide reactive current at a monthly average power factor of ninety percent (900) and the City shall maintain their system in a manner that the Service Provider may operate the Facility at a monthly average power factor of ninety percent (900). ARTICLE VI BILLING AND PAYMENT Section 6.1 The Service Provider will render to the City a monthly statement showing the total amounts due to the Service Provider for the electric energy supplied to the City in accordance with this agreement. All statements for electric energy supplied to the City in accordance with the terms hereof shall be due and payable to the Service Provider on the 20th day following receipt of such statement by the City, and all amounts owing to the Service Provider after the 20th day shall bear interest at the prime rate of interest quoted by American State Bank, Lubbock, Texas, or any successor thereto, as of such due date, plus one percent (1%), but not exceeding the highest rate then not usurious at law. ARTICLE VII INDEMNIFICATION Section 7.1 Electric energy supplied in accordance with the terms of this agreement is supplied upon the express condition that, after it passes the delivery point as hereinabove described, it becomes the property of and the responsibility of the City. Section 7.2 The Service Provider does not guarantee that the supply of electric energy in accordance with the terms hereof will be free from temporary interruptions and it is hereby agreed by the parties hereto that temporary interruptions of the Service Provider's service hereunder shall not constitute a breach of this contract on the part of the Service Provider, and in this regard, the City hereby agrees to indemnify and hold harmless the Service Provider from any damages resulting to the City and to the City's customers, resulting from such temporary 3 interruptions. In the event of temporary interruptions to service, the Service Provider will restore service as soon as it can reasonably do so, and will at all times exert itself toward the end of supplying as nearly constant service as is reasonably practicable. ARTICLE VIII FORCE MAJEURE Section 8.1 If by reason of force majeure the Service Provider is unable in whole or in part to carry out its agreement on its part herein contained, the Service Provider shall not be deemed in default during the continuance of such inability. Section 8.2 The term force majeure as used herein shall have the meaning ascribed to the term "Service Provider Event of Force Majeure" in that one certain Waste Processing Services Contract entered into by the parties hereto on even date herewith (the "Waste Processing Services Contract"). ARTICLE IX TERM Section 9.1 This agreement shall become effective as of the date of the execution hereof by both parties and shall continue until the expiration or termination of the Waste Processing Services Contract, including any extensions or renewals thereof. ARTICLE X SECURITY INTEREST Section 10.1 Service Provider shall have the right to assign its interest in this agreement for the purpose of granting a security interest to any party which may provide the Service Provider with the financing necessary for the construction, maintenance, or operation of the Facility. Section 10.2 In the event that the Service Provider shall grant a security interest in and to this agreement or the Faciltiy pursuant to the provisions of Section 10.1 above, the holder of any such security interest shall have the rights and duties set. forth in Section 10.18 of the Waste Processing 4 Services Contract, and said provisions are incorporated herein for all purposes as though they were fully set forth herein. EXECUTED THIS -day of February, 1987. ATTEST: v CITY OF LUBBOCK A Municipal Corporation City secretary APPROVED AS TO FORM: ivil Trial Attorney 5 BY: C. McMinn, Mayor ENVIRONMENTAL PROTECTION RESOURCES OF LUBBOCK, INC. A Texas Corporation BY: J44"1- -d-a-ry H. 14appler, esident Service Schedule A to Agreement between the City of Lubbock, Texas and Environmental Protection Resources, Inc. The City will pay the Service Provider for all kilowatt hours (KWH) of energy actually delivered to the City through the designated delivery point not in excess of eighty-five (85) million KWH per annum, as determined by recorded data, at the following rates: The rate for electric energy delivered to the City by the Service Provider prior to the Commencement Date (as defined in the Waste Processing Services Contract) will be the lesser of (a) the City's cost of generating electric energy, or (b) the lowest cost to the City of purchasing firm electric energy from any other supplier. Said rate shall be determined on a monthly basis and the rate applicable as of the first day of each month shall be applicable for the entire month. The rate for electric energy delivered to the City by the Service Provider for the initial two hundred forty (240) month period beginning on the Commencement Date shall be the greater of (i) the amount set forth opposite the appropriate year in the table set forth below (the "Scheduled Rate"), or (ii) the lesser of (a) the City's cost of generating electric energy or (b) the lowest cost to the City of purchasing firm electric energy from any other supplier (the "Avoided Cost Rate"). The Avoided Cost Rate shall be determined on a monthly basis and the rate applicable as of the first day of each month shall be applicable for the entire month. Year Rate in cents per KWH 1 3.92 2 4.18 3 4.46 4 4.76 5 5.08 6 5.40 7 5.76 8 6.13 9 6.59 10 7.09 11 7.44 12 7.82 13 8.21 14 8.62 15 9.05 16 9.50 17 9.98 18 10.48 19 11.00 20 11.55 9 In the event that the City shall pay to Service Provider the Scheduled Rate for any energy purchased pursuant to this agree- ment, the Service Provider shall credit the City in an amount equal to the excess of the Scheduled Rate over the Avoided Cost Rate (the "Credit"). The Credit shall be applied against any payments thereafter owed to the Service Provider by the City for energy purchased for which the Avoided Cost Rate exceeds the Scheduled Rate; provided, however, that such Credit shall not be utilized so as to reduce the City's cost of any energy purchased to a level below the Scheduled Rate. In the event that any Credit remains outstanding at the end of the two hundred fifty- second (252nd) month following the Commencement Date, the Service Provider shall pay to the City a sum equal to the amount of the Credit (the "Rebate"). In order to secure its obligation to pay the Rebate to the City, the Service Provider shall, at its option, (i) provide the City with a payment bond, (ii) establish an escrow account for the benefit of the City, (iii) provide the City with a letter of credit, or (iv) provide the City with such other security as shall be mutually agreeable to both the City and the Service Provider in their mutual sole and absolute discretion. Such security shall be established not later than January 31 of each year and shall be in an amount or otherwise secure an amount equal to the amount of the Credit outstanding as of December 31 of the prior calendar year; provided, however, that no security need be established if there is no Credit outstanding. The security shall remain in force for such period as any Credit shall remain outstanding and shall be adjusted on January 31 of each year to reflect changes in the outstanding amount of the Credit; provided, however, that the Service Provider shall have the right to use such form of security or any combination of forms of security as it shall elect from time to time. In the event that the Service Provider shall fail to provide such security, the City shall have the right, in its sole and absolute discretion, to pay to the Service Provider the Avoided Cost Rate until such time as the Service Provider shall provide the requisite security, and at such time as the Service Provider shall provide the security, the City shall pay to the Service Provider the amount of the Credit; provided, however, that the City shall not be liable to pay to the Service Provider any Credit which has been withheld pursuant to the provisions of this sentence for a period of more than twelve (12) months. No failure by the Service Provider to provide such security shall constitute a breach of this agreement and the sole remedy available to the City in such event is to pay the Service Provider for energy purchased at the Avoided Cost Rate in lieu of the Scheduled Rate. In the event that the Credit has not been paid by the start of the two hundred forty-first (241st) month following the Commencement Date, the City shall have the right to pay only seventy-five percent (75a) of the Avoided Cost Rate to the Service Provider for energy purchased, and an amount equal to fifteen percent (150) of the Avoided Cost Rate shall be applied to reduce the Credit, until such time as the City shall have recovered the amount of the Credit in full. 7 The rate for electric energy delivered to the City by the Service Provider during any period beyond the foregoing initial two hundred forty (240) month period will be ninety percent (900) of the lesser of (a) the City's cost of generating electric energy, or (b) the lowest cost to the City of purchasing firm electric energy from any other supplier. Said rate shall be determined on a monthly basis and the rate applicable as of the first day of each month shall be applicable for the entire month. 288608.036(10)gb