HomeMy WebLinkAboutResolution - 1555 - Agreement - Hooly Venture - Gas Purchase, Holly Ave Generation Plant - 01/12/1984JRM:nb
RESOLUTION
RESOLUTION 1555 - 1/12/84
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized
and directed to execute for and on behalf of the City of Lubbock a Gas
Purchase Agreement between the City of Lubbock and Holly Venture, a
Joint Venture, for gas for the Holly Avenue generation plant, 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 12th day of January 1984.
4'-111 9L
WAN-'FiF:NRY,-, MAYOV
ATTEST:
Evelyn a ga, City Sbc1V
ry- reasurer
APPROVED AS TO FORM:
. rcooert massenga ie, assistant pity
anager for Financial Services
RESOLUTION 1555 - 1/12/84 _
C%Tv f Cn r r n r
GAS PURCHASE AGREEMENT
BETWEEN
HOLLY VENTURE, A JOINT VENTURE
SELLER
AND
CITY OF LUBBOCK
BUYER
DATED: JAN 121984 , 1984
t
r
TABLE OF CONTENTS
ARTICLE
TITLE
PAGE
IDEFINITIONS
......................................
2
II
PRELIMINARY ACTS OF PARTIES ......................
3
IIIVOLUMES......
........... ** ... o..* ....... o ........
5
IVQUALITY
..........................................
7
V
POINT OF DELIVERY AND PRESSURE ...................
7
VIMEASUREMENT
......................................
8
VIIPRICE
AND BILLING ................................
12
VIIITAXES
............................................
15
IXREGULATORY
BODIES .............. a..... ....... .....
15
XFORCE
MAJEURE....................................
15
XI
REPRESENTATIONS AND INDEMNIFICATIONS.............
17
XIITERM.*.....*
..... s ... e..* .......... e..* ..........
17
XIIIMISCELLANEOUS
.....................................18
SIGNATUREPAGE ...................................
20
ACKNOWLEDGMENTS..................................
21
r r
GAS PURCHASE AGREEMENT
This Agreement made and entered into this day of
1984 by and between Holly Venture, a Joint
Venture consisting of Power Line, Inc. and Esperanza Gas Company,
hereinafter called Seller and the City of Lubbock hereinafter
called Buyer:
W I T N E S S E T H:
WHEREAS, Power Line, Inc. and Esperanza Gas company have
agreed, and by these presents do agree, to form and enter into a
Joint Venture pursuant to the Texas Uniform Partnership Act; and,
WHEREAS, the Joint Venture formed by the above named
companies represents that it has or will have available for the
sale to the City of Lubbock adequate supplies of natural gas;
and,
WHEREAS, the City of Lubbock desires to enter into this
Agreement to purchase natural gas from the Seller, said gas to be
used by the Buyer for the purpose of providing fuel for the
generation of electricity at its Holly Avenue electric generation
plant, and
WHEREAS, the Joint Venture has made a firm offer as to the
quantity of gas to be made available and the price to be charged
for said gas; and,
WHEREAS, the City of Lubbock deems it to be in its best
interest to accept said offer providing for firm pricing and
quantities of natural gas.
t
NOW THEREFORE, for and in consideration of the foregoing
and in further consideration of the mutual Agreements herein
contained the parties hereto agree as follows:
I. DEFINITIONS
For the purposes of this Contract, unless the context of
the instrument requires otherwise, the following definitions
shall be applicable:
1.01 "Gas" shall mean natural gas produced from gas wells, and
gas produced in association with oil.
1.02 "Day" shall mean the 24-hour period commencing at 7:00 a.m.
local time on one calendar day and ending at 7:00 a.m. local time
on the next succeeding calendar day.
1.03 "month" shall mean the period beginning at 7:00 a.m. local
time on the first day of a calendar month and ending at 7:00 a.m.
local time on the first day of the succeeding calendar month.
1.04 "Accounting Period" shall mean any twelve (12) month period
beginning each January 1 during the term of this Contract, except
the first Accounting Period, which shall be from the date of
initial delivery through December 31, 1984, and the last
Accounting Period, which shall end on the date this Contract
terminates.
1.05 "mcf" shall mean one thousand (1,000) cubic feet of gas and
"mmcf" shall mean one million (1,000,000) cubic feet of gas.
1.06 "Btu" shall mean British thermal units measured at 14.65
psia, sixty degrees Fahrenheit (60 deg. F), and water vapor
2
measured as delivered.
1.07 "MMBtu" shall mean one million (1,000,000) Btu.
1.08 "Psia" shall mean pounds per square inch, absolute.
1.09 "Psig" shall mean pounds per square inch, gauge.
II. PRELIMINARY ACTS OF PARTIES
2.01 Seller does hereby agree to construct, own, operate and
maintain a certain natural gas transmission line to be known as
the Holly Gas Transmission Line. The Seller agrees to construct
this line from a mutually agreeable point situated outside the
incorporated limits of the City of Lubbock, Texas, as close as
practical to Buyer's Holly Avenue electric plant in Lubbock
County to a point that said line ties into and intersects a
pipeline operated by Northern Natural Gas Company, a distance of
approximately 18 miles, all as more fully shown on Exhibit "A"
attached hereto and made a part hereof for all purposes.
2.02 The Buyer does agree to negotiate and obtain an Agreement
upon terms mutually agreeable to Buyer and Seller to transport
gas purchased from Seller through the pipeline operated by
Northern Natural Gas Company to the new pipeline know as Holly
Gas Transmission Line to be constructed by Seller. It is further
agreed between the parties hereto that obtaining this Agreement
from Northern Natural Gas Company by the Buyer shall be a
condition precedent to the obligation of the parties hereto and
that in the event the Buyer is unable to secure an Agreement
mutually satisfactory to Buyer and Seller for the transportation
3
of natural gas purchased from Seller through the pipeline
operated by Northern Natural Gas Company, then this Agreement
shall terminate and be of no effect between the parties.
2.03 Buyer agrees upon execution of this Agreement by Seller to
immediately open negotiation with Northern Natural Gas Company
and reasonably pursue said negotiations to secure a contract
whereby gas purchased by Buyer from Seller can be transported
through the pipeline operated by Northern Natural Gas Company to
the point of intersection with the Holly Transmission Line to be
constructed by Seller. The Buyer shall have a period of 180 days
to secure the Agreement between the Buyer and Northern Natural
Gas Company from the date Seller executes this Agreement which
date shall be communicated to Buyer in a letter addressed to
Buyer and signed by Seller.
2.04 Buyer agrees that if it is unable to obtain a Contract from
Northern Natural Gas Company within 180 days to notify Seller in
writing to such effect and such notification shall be sufficient
to notify Seller that Buyer has been unable to comply with the
condition precedent to the Agreement of the parties hereto and
under the terms of Article 2.02, this Agreement shall be of no
further force nor effect.
2.05 Seller agrees and warrants that it has, or will have
sufficient quantities of natural gas available to it and the
capability of transporting said gas through the pipeline operated
by Northern Natural Gas Company subject to the Agreement to be
4
A
obtained by the Buyer heretofore mentioned.
2.06 It is further agreed between the parties hereto that the
primary purpose of this Agreement is to provide a sufficient and
adequate supply of natural gas to Buyer for use by it in the
generation of electricity at its Holly Avenue electric generation
plant. It is further agreed by the parties hereto that Seller
shall have the right to transport and sell through the facilities
constructed by it additional natural gas over that required to
supply the Buyer upon terms and conditions satisfactory to the
Seller.
2.07 Seller agrees that time is of the essence in the
construction of the pipeline to be built by Seller under this
Agreement and such construction shall be completed within 180
days after Buyer has notified Seller in writing that it has
obtained an Agreement with Northern Natural Gas Company as set
forth in Article 2.02 hereof.
III. VOLUMES
3.01 Commencing on the date of initial delivery, Buyer agrees to
receive and purchase, or pay for if available for delivery and
not taken, and Seller agrees to deliver and sell, subject to the
limitations and conditions herein elsewhere provided, during each
Accounting Period, the following minimum quantities:
a) During the Accounting Period ending December 31,
1964 - three billion cubic feet of natural gas (3.0
Bcf).
5
Y
r.
b) During the Accounting Period ending December 31,
1985, and during each Accounting Period thereafter -
four and one quarter billion cubic feet of natural gas
(4.25 Bcf).
c) In addition, Buyer shall have the option during
the entire term hereof, which option shall be executed
in writing 60 days prior to the purchase date, to take
up to an additional four and one quarter billion cubic
feet (4.25 Bcf) of natural gas for each accounting
period thereafter provided Seller has such gas
available for sale. In the event that Seller does not
have such additional available for sale, Buyer shall
have the right to purchase such additional quantities
of gas from other suppliers and Seller agrees to
transport said gas to Buyer through the pipeline owned
by Seller for a reasonable transportation fee.
3.02 If at the end of any Accounting Period the Buyer, shall
have failed to take during such period the quantity required of
it hereunder, Seller shall invoice Buyer for the quantity not
taken and Buyer shall pay Seller in full for the amount of such
invoice within fifteen (15) days from receipt thereof. If Buyer
shall have paid for any gas not actually received by it during
any accounting period, it shall, subject to first satisfying the
minimum requirements set forth in 3.01 hereof, be entitled to
receive, without further payment, such quantity in installments
Rt
as it may from time to time designate during the remaining term
of this Agreement. In making up such gas deficiencies, if there
has been an increase in price between that upon which payments
were made and that applicable at the time of making up
deficiencies, Buyer shall pay Seller in cash for the amount of
the difference.
IV. QUALITY
All gas delivered by Seller to Buyer under this Contract
shall be of such quality that it conforms to the specifications
required by third -party transporting pipelines, with such
specifications being subject to mutual agreement between Buyer
and Seller in accordance with Article II hereof.
V. POINT OF DELIVERY AND PRESSURE
5.01 The Point of Delivery for all gas purchased and sold
pursuant hereto shall be at a mutually agreeable point situated
outside the incorporated limits of the City of Lubbock, Texas as
close as possible to Buyer's Holly Avenue Electric Plant.
5.02 Seller shall construct, equip, maintain and operate all
facilities necessary to deliver Seller's gas to Buyer at the
Point of Delivery.
5.03 All gas delivered by Seller to Buyer at the aforementioned
Point of Delivery shall be at pressures sufficient to enter
Buyer's facilities not to exceed five hundred pounds per square
inch, gauge (500 psig), and not less than one hundred fifty
pounds per square inch, gauge (150 psig).
7
ir
5.04 Anything contained herein to the contrary notwithstanding,
it is explicitly agreed and understood by the parties hereto that
Seller shall have no obligation to provide compression services
of any nature in performance hereunder.
5.05 Seller shall be in control and possession of the gas sold
and purchased hereunder and responsible for any damage or injury
caused thereby until the same shall have been delivered to Buyer
at the Point of Delivery.
5.06 Buyer shall be in control and possession of the gas sold
and purchased hereunder and responsible for any damage or injury
caused thereby after the same shall have been delivered at the
Point of Delivery.
VI. MEASUREMENT
6.01 The Unit of Volume for measurement of gas delivered
hereunder shall be one (1) cubic foot of gas at a base
temperature of sixty degrees Fahrenheit (60 deg. F) and at an
absolute pressure of fourteen and sixty-five hundredths pounds
per square inch (14.65 psi), and otherwise as provided by the
Standard Gas Measurement Law of the State of Texas (Article 6066b
of Vernon's Texas Civil Statutes). Except as provided by that
law, all fundamental constants, observations, records, and
procedures involved in determining and/or verifying the quantity
and other characteristics of gas delivered hereunder shall,
unless otherwise specified herein, be in accordance with the
standards prescribed in Report No. 3 of the American Gas
3
• y.
Association, as now and from time to time amended or supplement-
ed. All measurements of gas shall be determined by calculation
into terms of such unit. All quantities given herein, unless
expressly stated, are in terms of such unit.
6.02 Seller or its designee shall at its own expense install,
maintain and operate, or cause to be installed, maintained and
operated, the necessary measuring station at the Point of
Delivery. Said measuring station shall be so equipped with
orifice meters, recording gauges, or other types of meters of
standard make and design commonly acceptable in the industry, as
to accomplish the accurate measurement of gas delivered here-
under. The changing of charts and calibrating and adjusting of
meters shall be done by Seller or its designee.
6.03 Buyer may at its option install check meters downstream of
Seller's measuring station for checking Seller's metering
equipment; and same shall be so installed as not to interfere
with the operation of Seller's or its designee's facilities.
6.04 The temperature of the gas shall be determined by the
continuous use of a recording thermometer installed by Seller or
its designee so that it will properly record the temperature of
the gas flowing through the meter. The temperature recorded each
day during the time that gas was actually flowing through the
meter shall be used in computing measurement for that day.
6.05 The specific gravity of the gas shall be determined by
Seller or Seller's designee at quarterly intervals, or more
0
t
often, at Seller's election, by means elected by Seller which are
approved by the American Gas Association as set forth in its Gas
Measurement manual. Specific gravities so determined will be
used in calculating gas deliveries for the day on which the test
is made, and for all following days until the next specific
gravity test is made.
6.06 The heat content of the gas shall be determined by Seller
or its designee by taking samples of gas at Seller's meter; the
samples may be run on a calorimeter or a chromatograph at another
location. The result shall be applied to gas deliveries for the
day when the sample is taken and for all following days until the
next sample is taken. Such samples shall be taken at quarterly
intervals, or more often, at Seller's election. The Btu content
per cubic foot shall be determined in accordance with Article
1.06 hereof.
6.07 Each party shall.have the right to be present at the time
of any installing, reading, cleaning, changing, repairing,
inspecting, testing, calibrating, or adjusting done in connection
with the other's measuring equipment used for measuring deliver-
ies hereunder. The records from such measuring equipment shall
remain the property of their owner, but upon request, each will
submit to the other its records and charts, together with
calculations therefrom, subject to return within fifteen (15)
days after receipt thereof, after which the charts shall be kept
on file for a period of two (2) years.
10
At least once each quarter, Seller or its designee shall
calibrate the meter(s) and instruments or cause the same to be
calibrated. Seller shall give Buyer sufficient notice in advance
of such tests so that Buyer may, at its election, be present in
person or by its representative to observe adjustments, if any,
which are made. For the purpose of measurement and meter
calibration, the atmospheric pressure shall be assumed to be
fourteen and seven -tenths pounds per square inch (14.7 psi),
irrespective of variations in natural atmospheric pressure from
time to time.
6.08 If upon any test the metering equipment in the aggregate is
found to be inaccurate by two percent (2%) or more, registration
thereof and any payment based upon such registrations shall be
corrected at the rate of such inaccuracy for any period of
inaccuracy which is definitely known or agreed upon, or if not
known or agreed upon, then for a period extending back one-half
(1/2) of the time elapsed since the last day of the calibration,
not exceeding, however, forty-five (45) days. Following any
test, any metering equipment found to be inaccurate to any degree
shall be adjusted immediately to measure accurately. If for any
reason any meter is out of service or out of repair so that the
quantity of gas delivered through such meter cannot be
ascertained or computed from the readings thereof, the quantity
of gas so delivered during such period shall be estimated and
agreed upon by the parties hereto upon the basis of the best
11
available data, using the first of the following methods which is
feasible:
a) By using the registration of any check measuring
equipment of Buyer, if installed and registering accurately;
b) By correcting the error if the percentage of error is
ascertainable by calibration, test, or mathematical calculation;
or,
c) By estimating the quantity of deliveries by deliveries
during preceding periods under similar conditions when the meter
was registering accurately.
6.09 The measurement hereunder shall be corrected for deviation
from Boyle's Law at the pressure and temperature under which gas
is delivered hereunder.
VII. PRICE AND BILLING
7.01 Buyer hereby agrees to pay to Seller and Seller agrees to
accept as full consideration for all gas purchased by Buyer under
this contract, together with all gas for which Buyer is required
to pay pursuant to Article III hereof, the following:
7.02 Commencing with initial deliveries of gas and continuing
through December 31, 1965, the total base price payable by Buyer
to Seller monthly for each MMBtu (One million British Thermal
Units) of natural gas delivered or paid for if not taken in
accordance with the terms of this Agreement shall be THREE
DOLLARS AND THIRTY-FIVE CENTS ($3.35) and no more.
7.03 On January 1, 1986, and on the first day of each calendar
12
rt
quarter thereafter during the term hereof, the base price set
forth in Article 7.02 above shall be adjusted by an amount which
is ratably equal to the incremental aggregate percentage increase
or decrease in the posted price of low sulphur No.2 fuel oil as
published in Platt's Oilgram (adjusted for west Texas deliveries)
for the three (3) months period immediately preceding.
7.04 Notwithstanding any of the provisions set forth in Article
7.03 above, the parties hereto understand and agree that the
price to be paid by Buyer to Seller shall not be less that the
base price as set forth in 7.02 above.
7.05 After delivery of gas has commenced, or payments are due
under the terms of this Contract, Seller shall, on or before the
fifteenth (15th) day of each month, render to Buyer a statement
showing the quantity of gas delivered during the preceding
calendar month, and Buyer shall, on or before the 25th day of
such month, pay Seller the amount due for all such gas.
7.06 Each party hereto shall have the right at all reasonable
times to examine the books and records of the other party to the
extent necessary to verify the accuracy of any statement, charge,
computation, or demand made under or pursuant to this Contract.
Any statement shall be final as to both parties unless questioned
within two (2) years after payment thereof has been made.
7.07 The Buyer and Seller do hereby agree, that notwithstanding
anything contained in this Agreement to the contrary, that at a
point in time when Seller shall have received net income from the
13
operation equal to one hundred fifty percent (150%) of the total
project capital costs (pipeline construction) including overhead
during construction of said pipeline, the Buyer shall thereafter
receive a gas price adjustment equal to twenty five percent (25%)
of Seller's net income from Joint Venture operations.
7.08 The said gas price adjustment shall be made in the form of
an aggregate dollar credit directly applied by Seller to its
monthly invoices rendered to Buyer. The adjustment to be shown
on each monthly invoice shall reflect twenty five percent (25%)
of Seller's net income for the third month immediately preceding.
7.09 The parties hereto do hereby agree that net income for the
purposes of this Article VII shall be determined by subtracting
from gross operating revenues (gas sales through the pipeline to
be constructed by Seller) the sum of the following:
a) Gas Purchase Costs
b) Third Party Transportation Costs
c) Direct Operating and maintenance expenses
d) Reasonable General and Administrative expenses
e) Taxes (excluding F.I.T.)
f) Seller's imputed interest expense calculated on total
project costs.
7.10 Seller agrees that all net income received by Seller from
the sale of all gas throughout the pipeline to be constructed by
Seller shall be applied to the reimbursement of capital cost and
when such reimbursement reaches the percentages expressed in
14
Article 7.08 hereof, to notify Buyer of such fact in writing.
7.11 The parties hereto agree that the Buyer shall have the
right to audit the books of Joint Venture for the purposes of
determining compliance with Article VII of this Agreement.
VIII. TAXES
Buyer shall not be obligated nor responsible to pay any
existing excise, severance, production, sales, occupation, and
other taxes of like nature levied in respect to the gas and
handling thereof prior to delivery to Buyer, provided however,
Buyer shall reimburse Seller for one hundred percent of any new,
additional or increased taxes levied on Seller in respect to the
gas and the handling thereof prior to delivery to Buyer.
IX. REGULATORY BODIES
This Contract is subject to all present and future valid
laws and lawful orders of all regulatory bodies now or hereafter
having jurisdiction of the parties or either of them; and should
either of the parties, by force of any such law or regulation
imposed at any time during the term of this Contract, be rendered
unable, wholly or in part, to carry out its obligations under
this Contract, other than to make payments due hereunder, the
Contract shall continue nevertheless and shall then be deemed
modified to conform with the requirements of such law or
regulation.
X. FORCE MAJEURE
In the event of either party hereto being rendered unable,
15
1 ••
wholly or in part, by force majeure to carry out its obligations
under this Contract, other than to make payments for gas
delivered and received hereunder, it is agreed that on such
party's giving notice and full particulars of such force majeure
in writing or by telegraph to the other party as soon as possible
after the occurrence of the cause relied on, then the obligations
of the party giving such notice, so far as they are affected by
such force majeure, shall be suspended during the continuance of
any inability so caused but for no longer period, and such cause
shall as far as possible be remedied with all reasonable
dispatch.
The term "force majeure'' as employed herein shall mean acts
of God, strikes, lockouts, or other industrial disturbances, acts
of the public enemy, wars, blockades, insurrection, riots,
epidemics, landslides, lightning, earthquakes, fires, storms,
floods, washouts, arrest and restraints of governments and
people, civil disturbances, explosions, breakage, accidents
and/or maintenance to machinery, lines of pipe, freezing of wells
or lines of pipe, partial or entire failure of wells, or refusal
by transporting pipeline to accept delivery of gas purchased
hereunder. It is understood and agreed that the settlement of
strikes or lockouts shall be entirely within the discretion of
the party having the difficulty, and that the above requirement
that any force majeure shall be remedied with all reasonable
dispatch shall not require the settlement of strikes or lockouts
16
Ri f
by acceding to the demands of opposing party when such course is
inadvisable in the discretion of the party having the difficulty.
XI. REPRESENTATIONS AND INDEMNIFICATIONS
Seller hereby represents that it has authority to commit to
this Contract the gas to be sold and delivered hereunder. Seller
agrees to indemnify Buyer and save it harmless from all suits,
actions, debts, accounts, damages, costs, losses and expenses
arising from or out of adverse claims of any and all persons,
firms, or corporations to said gas or to royalties, overriding
royalties, taxes, license fees, or charges thereon, which are
applicable before title to the gas passes to Buyer. In addition,
Seller does hereby agree to save and hold Buyer harmless from all
claims, causes of action, or lawsuits in any way arising from the
construction, ownership, operation or maintenance of the Holly
gas transmission pipeline. In this regard, Joint Venture shall
purchase and maintain all necessary insurance customary to
industry standards for businesses engaged in the pipeline
business.
XII. TERM
12.01 The primary term hereof shall be for a period of five (5)
years commencing on the date of initial deliveries hereunder.
12.02 This agreement shall continue in full force and effect
from year-to-year thereafter until canceled by either party
hereto on one hundred eighty (180) days' prior written notice to
the other.
17
i ", 1
XIII. MISCELLANEOUS
13.01 No waiver by either Seller or Buyer of any default of the
other under this Contract shall operate as a waiver of future
default, whether of like or different character or nature.
13.02 This Contract shall be binding upon and inure to the
benefit of the successors and assigns, or the heirs, admin-
istrators, or executors of the parties hereto. Any party hereto
may assign his or its right, title and interest in, to and under
this Contract, including, without limitation, any and all
renewals, extensions, amendments, and/or supplements hereto to
any individual, bank, trustee, company or corporation as security
for any note, notes, bonds or other obligations or securities of
such assignor; provided, however, that no such assignment shall
be made without the prior written consent of the other party,
which consent shall not be unreasonably witheld. Any such
assignment shall in no way operate to enlarge, alter or change
any obligation of the other party or parties hereto.
13.03 Seller expressly does not by the terms of this Contract
sell, transfer, or assign unto Buyer any title or interest
whatsoever, in Seller's pipe, meters, lines or other equipment of
any nature owned or used by Seller in the operation of its
system.
13.04 All notices, presentments and other correspondence pro-
vided for herein, or arising herefrom shall be in writing, and
shall be deemed to have been delivered when deposited in the
18
3
r, '%
United States mail, postage prepaid, and addressed to the
appropriate party as indicated:
Seller: Holly Venture, a Joint Venture
P. 0. Box 2447
Corpus Christi, Texas 78403
Buyer: The City of Lubbock
P. 0. Box 2000
Lubbock, Texas 79457
or to such other single name and address as either party may, by
written notice, designate to the other.
13.05 The parties hereto agree and confirm that in the
consideration and interpretation of this Contract same shall be
construed under the laws of the State of Texas, and this Contract
was prepared by all parties hereto and not by any party to the
exclusion of the other or others.
13.06 No modification of the terms and provisions of this
Agreement shall be or become effective except pursuant to and
upon the due and mutual execution of an appropriate supplemental
written Contract by the parties hereto.
13.07 Seller does hereby agree that it will not sell or divest
itself of ownership of the pipeline to be constructed by Seller
in accordance with the terms of this agreement unless and until
it has first offered to sell said pipeline to Buyer for the
reasonable market value thereof.
19
r
13.08 market Value shall be determined in the following manner:
a) One appraiser shall be.appointed by Buyer
b) One appraiser shall be appointed by Seller
c) The two appraisers so appointed shall appoint a third
appraiser.
The three appraisers shall thereafter determine the market value
of the pipeline which determination shall be binding on the
Parties hereto.
13.09 In the event Buyer does not desire to purchase said
pipeline it shall notify Seller in writing within 30 days after
receipt of the offer of sale from Seller.
IN WITNESS WHEREOF, the parties have executed this Agreement
to be effective as of the day and date first hereinabove written
in multiple originals, each of which shall constitute and be an
original Contract.
JOINT VENTURE -SELLER
POWER E, IN
BY
J E NOL S
RESIDENT
CITY OF L BBOCK-BUYER
BY:
A N HENRY, MAY0
ATTEST:
E elyn Ga fga, City S c tary
ESPERANZA GAS COMPANY APPROVED AS TO FORM:
B Y : C-
ohn C. Ross, Jr.
City Attorney
P411
q, i1 r
r
THE STATE OF TEXAS )
COUNTY OF NUECES )
BEFORE ME, the undersigned authority, on this day personally
appeared STEVENS G. HERBST, President of ESPERANZA GAS COMPANY, a
corporation, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me
that he executed the same for the purposes and consideration
therein expressed, in the capacity therein stated, and as the act
and deed of said corporation.
GIVEN UNDER DIY HAND AND.SEAL OF OFFICE this 31st day of
J,a.nuary 1984
fly Commission Expires:&A&&oJ,
6&w)
7-29-87 Notary ublic In and For
THE STATE OF TEXAS
THE STATE OF TEXAS )
COUNTY OF
BEFORE 2�the tndersigned auth ity, on this day personally
appeared _ for the
CITY OF LUBBOCK, known/O me to be th person whose name is
subscribed to the for going instrumen , and acknowledged to me
that he executed the same for the purposes and consideration
therein expressed, in the capacity therein stated, and as the act
and deed of said city.
Q=—,
R mY HAND AND SEAL OF OFFICE this day of
1984.
My Commis ion Expires:
� 66�0 '0"
Notary Public In and For
THE STATE OF TEXAS
21
x
e.
THE STATE OF TEXAS )
}
COUNTY OF )
8EFE �, the ndersign au rity, on this day personally
appeared of POWER LINE,
INC., a ccfrporlation,nown to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me
that he executed the same for the purposes and consideration
therein expressed, in the capacity therein stated, and as the act
and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of
-, , 1984.
My Commission Expires:
-� Not ry Public In and F r
THE STATE OF TEXAS
22
Following the responses, the motion was made by Council-
man Aderton, seconded by Councilman Brown that due to
the 30 MW requirement as proposed., the City would not be
able to consider this offer at this time. Councilman Brown
_--_ indicated that this is the type of innovativeness that
-. is needed -in the industry, but the time was not rio_ht
for the -City. Motion carried: 5 Yeas; 0 Nays.
(28.) Consider a resolution -authorizing the Board of Directors
of the
an
appoin ing wo erectors o -t a oar o erectors to
represent the :it D—f5 Fo-c W.
RESOLUTION 1554
Pursuant to the bond attorneys' instruction, the
creation of the Board of Directors is the next step, the
appointees from each West Texas City to be determined
prior to the organizational meeting on January 24.
Representing the City on this Board will be:
Councilwoman Joan Baker
Leona Maxwell, Asst. Dir. Elec. Utilities
The motion was made by Councilwoman Baker, seconded by
Mayor Pro Tem Carpenter to approve RESOLUTION 1554
creating the Board of Directors, and appointing the
above referenced directors to represent the City.
Motion carried: 5 Yeas; 0 Nays.
(29•) Consider a resolution authorizing Mayor to sign
agreement for purchase o qas.
RESOLUTION 1555
The contract to purchase gas for fuel for Holly Plant is
with Holly Venture, a Joint Venture, with Power Line,
Inc. (Joe Jack Reynolds and Joe Barkley) and Esparanza
Gas Co. of Corpus Christi.
The price of the fuel is $3.35 mcf, for a period of five
years with a price adjustment to begin in January, 1986.
The contract also provides that when the Joint Venture
has recovered its capital costs, the City will share in
the net profits to the extent of 25%. The contract is
subject to acquiring transportation :m Northern
Pipeline Company.
ACM Robert Massengale apprised the Council of two
amendments to the contract:
-8-
(30.)
Paragraph III, Sec. 3.01(c) --page 6 of the contract
". . . of natural gas for each accounting
period thereafter, provi3ea_5"el er. ."
Paragraph XI, --page 17 of the contract:
(Add an.additional paragraph)
"In addition, Seller does hereby agree to save and
hold harmless froma claims, causes OT action or
lawsuits -arising from the construction, ownership,
operation or maintenance of the Holly gas
transmission line. In this regard, .oint Venture
shall purchase and maintain all necessary insurance
guarantees to industry standards for businesses
engaged in t e 4as pipelinebusiness."
The motion was made by Councilwoman Baker, seconded by
Councilman Brown to approve RESOLUTIONS 1555, as
amended, authorizing the referenced contract with Joint
Venture. Motion carried: 5 Yeas; 0 Nays.
Consider write off of uncollectable accounts.
The amounts submitted to be removed from the books, but
not forgotten are as follows:
General Fund
Sewer Fund (Pro -rata)
Airport Fund
Electric Fund (Prop.Damage)
Water, Garbage, sewer fund
(utility charge-offs)
Electric Fund
(utility charge-offs)
Total
$ 22,920.32
79.56
66,909.65
1,486.39
214.479.29
553,809.17
$859,684.38
One of the major accounts is lease rentals due from
Braniff Airline ($66,909.65). Also, these figures do
not include the deposits or late charges implemented
last year.
The motion was made by Councilwoman Baker, seconded by
Mayor Pro Tem Carpenter to approve writing -off these
accounts considered uncollectable. Motion carried:
5 -Yeas; 0 Nays.
la
MAP IloT FILE
SEE
RESOLUTION