HomeMy WebLinkAboutContract 26297 CITY SECRETARY
tiONTRACT NOTXU . �
Energy Services Natural Gas Sales Agreement#13781
BUYER: City of Fort Worth SELLER: TXU Energy Services
C/o Fort Worth Water Department 300 South St. Paul, Suite 260 EC
P.O. Box 870 Dallas, TX 75201-5598
Fort Worth,Texas 76101
Marketer Operations
Attn: Robert McMillon Attn: Bill Rankin Utility Operations -Dallas
Phone: (817)277-7591 Phone: (214) 875-5274 (214)875-5103
Fax: (817)548-5755 Fax: (214) 875-5180 (214) 875-5180
I September 1, 2000 through August 31,2001
TERM
II.
NOMINATION Seller's pool(s) on TXU Lone Star Pipeline
POINT(S)
III.
RECEIPT TXU Lone Star Pipeline
POINT S
IV The monthly price per MMBtu shall be an amount equal to the "index (large packages only)" for
PRICE "Houston Ship Channel/Beaumont, Texas" "Delivered Spot-Gas Prices" as published in Inside
F.E.R.C.'s Gas Market Report at the beginning of the month for such month("Index Price").
V INVOICE ADDRESS: PAYMENT ADDRESS/INSTRUCTIONS:
BILLINGS City of Fort Worth TXU Energy Services Chase Bank of Texas
AND Attn: Accounts Payable P O Box 910015 ABA#113000609
PAYMENTS 1000 Throckmorton Street Dallas,TX 75391 TXU Energy Services
Fort Worth,Texas 76102 Acct#08805169610
Buyer agrees to sign and return the attached Limited Agent letter as part of this Agreement.
Notwithstanding anything to the contrary contained herein, Buyer and Seller may mutually agree to
VI, negotiate a change to a fixed monetary price for any mutually agreeable period. If such mutually
SPECIAL agreed upon period does not extend through the primary term hereof, then the price payable
PROVISIONS hereunder after such period shall be the Index Price until renegotiated as provided herein. If the
parties cannot agree upon a new fixed price, then the price payable hereunder shall continue to be
the Index Price until renegotiated as provided herein.
THIS PURCHASE IS SUBJECT TO THE TERMS AND CONDITIONS SET ON THE REVERSE SIDE.
I acknowledge that this represents theagreement reached between the BUYER and SELLER.
BUYER: City of Fort Worth Mi &raomtr {rt, 13 aoao
Print: Date:
Title: Assi�}ank y ma"fr
SELLER: TXU Energy Services Print: NancyF.P rry Date- October 3,2000
APROVED AS Title: Vice President
All transacts ns are subjec 'CC iP val.
T'w ��
Assistant city Atl§crney OuCj�b ��o
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TERMS AND CONDITIONS
1.SUBJECT MATTER AND QUANTITY: Subject to the terms and conditions herein, Seller shall sell and deliver and Buyer shall purchase
and receive that portion of Buyer's plant's entire daily natural gas requirements that Buyer is not required to purchase from its primary natural
gas pipeline supplier plus any related transportation retention volumes(i.e.,quantities approximately equal to those set forth in the attached
Exhibit "A"). In the event Buyer takes quantities of gas in any month which are in excess of one hundred ten percent (110%) of the
quantities listed in Exhibit "A" hereof, such quantities may be priced by Seller at current market value, plus all reasonable costs, including
transportation. If Buyer, (provided such is not the result of a force majeure event),takes quantities of natural gas during any month of the
term hereof which are less than ninety percent (90%) of the quantities listed in Exhibit "A" hereof, Buyer agrees to reimburse Seller for all
reasonable costs which Seller incurs as a result of such reduced takes;provided,however,Seller shall use reasonable commercial efforts to
minimize such costs.
2. ACCEPTANCE,CREDIT TERMS AND_SECURITY:
2.1 If the terms of Seller's offer are acceptable to Buyer,Buyer shall confirm those terms by signing and returning to Seller the Natural Gas
Sales Agreement ("Agreement") to which these Terms and Conditions are attached and made a part thereof. Unless rejected in writing
within five(5) business days of receipt from Seller by Buyer, this Agreement shall be deemed to be conclusive evidence of the transaction
and the final expression of its terms.
2.2 Seller's execution of this Agreement will constitute acceptance by Seller of Buyer's credit status. If during the term hereof, Seller, in its
sole good faith opinion,determines that there has been a material change in Buyer's credit status or financial condition,or if Buyer exceeds
its credit limit with Seller,Seller may require Buyer to secure each payment hereunder by obtaining an irrevocable standby letter of credit for
the benefit of Seller,in a form and issued by an institution acceptable to Seller and available no later than ten(10)business days prior to the
next scheduled delivery date. Notwithstanding anything to the contrary under this Agreement,the failure of Buyer to secure such a letter of
credit when required by Seller for any payment due hereunder shall obligate Buyer to prepay Seller by wire transfer,in immediately available
funds, no later than two (2) business days prior to the delivery date, book transfer date, or nomination date, whichever the case may be.
Buyer and Seller shall bear the costs of such wire transfer at their respective banks. If Buyer fails to prepay Seller in accordance with this
section,Seller may suspend deliveries of gas hereunder and/or may terminate this Agreement upon five(5)days prior notice to Buyer.
3. TERM: This Agreement shall be effective for the primary term as set forth in Article I on the front of this Agreement,and shall continue in
effect thereafter for successive periods of one(1)year each unless terminated by either party at the end of the primary term or at the end of
any one(1)year period thereafter by giving not less than thirty(30) days prior written notice to the other. This Agreement will supersede
and replace any and all prior agreements between Buyer and Seller serving the facilities covered hereby.
4.RECEIPT POINT(S)AND TRANSPORTATION:
4.1 The Nomination Point(s) and Receipt Point(s) are shown in Articles II and III, respectively, on the front of this Agreement. Seller is
hereby appointed and shall act on behalf of Buyer as Buyer's agent to arrange and pay for transportation of the gas from the Receipt
Point(s)to the Nomination Point(s),and to cause deliveries to be made at the Nomination Point(s). Buyer is responsible for communicating
to Seller all material changes in the quantities of natural gas it intends to purchase from Seller as soon as possible in order for Seller,acting
as agent for Buyer, to acquire necessary transportation capacity on Buyer's behalf and to make the appropriate nomination changes with
transporting pipelines and/or local distribution companies in a timely manner. Buyer shall reimburse Seller for all pooling penalties, "cash-
out"costs,and all other related transportation penalties,balancing fees or any other charges imposed on Seller as a result of Buyer's failure
to timely notify Seller of such changes or to take quantities of gas as required by this Agreement.
4.2 If Buyer or Seller receives an invoice for penalties, cashouts or other charges relating to an Operational Flow Order, Emergency
Flow Order, or similar order, both parties shall be obligated to determine the validity, as well as the cause and the party responsible, of
such penalty,cashout or charge. If any penalty,cashout or charge results from the action or inaction of a parry hereto(the"Responsible
Parry')then the Responsible Parry shall pay the penalty or charge. If the penalty, cashout or charge is billed to and paid by the party
who is not the Responsible Party, that Party may in its discretion set off all amounts so paid against any amounts it then owes to the
Responsible Parry or bill the Responsible Parry.
S.PRICE: Buyer agrees to pay and Seller agrees to accept the Price set forth in Article IV on the front of this Agreement for all gas actually
delivered at the Nomination Point(s)in accordance with this Agreement. Buyer also agrees to reimburse Seller,acting as agent on behalf of
Buyer,for all costs(including, but not limited to, pooling fees) incurred on Buyer's behalf associated with the transportation of the gas from
the Receipt Point(s)to the Nomination Point(s).
6. PRICE RENEGOTIATION: Notwithstanding anything contained herein to the contrary, thirty(30) days prior to the end of the primary
term and in all subsequent periods during the term hereof, either parry may request a price renegotiation for gas to be sold and purchased
during the succeeding one(1)year period. If the parties cannot agree on a renegotiated price during such thirty(30)day period,either party
may terminate this Agreement effective as of the end of such thirty(30)day period.
7.QUALITY AND MEASUREMENT: Measurement of heating value (MMBtu) of the natural gas purchased and sold hereunder will be
made at the Receipt Point(s)in accordance with the quality specifications of the transporting pipeline(s). Buyer is not obligated to purchase
any gas,which does not meet all specifications of the transporting pipeline(s).
8.BILLINGS AND PAYMENT: On approximately the 15th day of each month during the term(s) hereof, Seller will invoice Buyer for gas
delivered the previous month, for transportation charges incurred to deliver the gas to the Nomination Point(s), and for any other amounts
due from Buyer to Seller hereunder. Buyer shall pay Seller based upon the invoice within ten (10) days of receipt of Seller's invoice. If
Buyer fails to pay the entire amount of the invoice when due, at Seller's option, (1) Seller may suspend deliveries until Seller receives
payment in full; and/or(2) interest will accrue on the unpaid portion at a rate equal to nine percent (9%) above the prime rate charged by
Chase Bank of Texas, Dallas,from time to time, or the highest rate allowed by law,whichever is the lesser,from the date such payment is
due until the same is paid. No parry receiving proceeds under this Agreement may request any adjustment or correction of any statement or
Gas,Rev.001002 Page 2 of 6
TERMS AND CONDITIONS
payment unless written notice of such request for adjustment or correction is furnished within twelve(12)months of the date of the statement
or payment for which such adjustment or correction is requested.
9.FORCE MAJEURE: Except as specifically provided to the contrary herein, inability or failure of Seller to deliver or of Buyer to receive gas
or of either party to perform pursuant to this Agreement will not be the basis of claims for damages sustained by either party or for breach of
contract when due to causes or contingencies reasonably beyond the control of either party hereto, including but not limited to Acts of God
or governmental authority; the elements; labor disputes; fires, accidents, breakage, repair or change of or obstruction in pipelines,
equipment or machinery; lack of available firm transportation capacity; depletion or failure of gas supply; fluctuations in gas pressure, or
demands in excess of the capacity of transporter's equipment or pipelines; inability of transporter to accept deliveries of gas from Seller or
redeliver to Buyer,through no fault of Buyer; or cancellation by transporter of Buyer's transportation agreement with transporter through no
fault of Buyer. The party suffering the event of force majeure shall give notice of such event of force majeure in reasonably full particulars to
the other party,as soon as reasonably possible. Any such event of force majeure shall,so far as possible,be remedied with all reasonable
dispatch. It is understood and agreed that the settlement of strikes or lockouts will be entirely within the discretion of the party having the
difficulty, and that the above requirement of the use of diligence in restoring normal operating conditions will not require the settlement of
strikes or lockouts by acceding to the terms of the opposing party when such course is inadvisable in the discretion of the party having the
difficulty.
10. TITLE AND INDEMNIFICATION:Title to the natural gas sold hereunder will pass from Seller to Buyer at the Receipt Point(s). Seller will
pay or cause to be paid all royalties,taxes and other sums due on production and transportation of the natural gas prior to delivery. Seller
will be in full control and possession of the natural gas and shall be fully responsible for and shall indemnify Buyer for any damage or injuries
caused thereby until the natural gas is delivered to Buyer at the Receipt Point(s), except for injuries and damage which are caused by the
negligence of Buyer. Buyer will likewise pay all taxes or other sums due on,at or after the Nomination Point(s)and be fully responsible and
shall, to the extent permitted by law, indemnify Seller for damage or injury occurring after the natural gas is delivered to the Nomination
Point(s),except for injuries and damage caused by the negligence of Seller. Nothing contained herein shall be construed to require Buyer to
assess,levy or collect any tax to fund this indemnification provision. Buyer shall reimburse Seller for any and all applicable taxes,including,
but not limited to, gross receipt tax, imposed by any state or local government upon any transaction or occurrence done pursuant to the
terms of this Agreement.
11. WARRANTIES AND LIMITATIONS OF LIABILITIES:
11.1 Seller hereby warrants to Buyer that at the time of delivery of gas hereunder it will have good title and/or the right to sell such gas,
and that such gas will be free and clear of all liens and adverse claims.
11.2 The liability of a party breaching the provisions of this Agreement shall be limited to direct actual damages only. Such direct actual
damages shall be the sole and exclusive remedy hereunder and all other remedies or damages at law or in equity are waived. Neither party
shall be liable for consequential, incidental, punitive, exemplary or indirect damages, lost profits or other business interruption damages, in
tort,contract,under any indemnity provision or otherwise.
11.3 Seller warrants that it will not take any action nor commit any act of omission which will subject this transaction,the subject gas,the
facilities utilized for delivery of gas hereunder, or Buyers Transporters facilities to jurisdiction of the Federal Energy Regulatory Commission
under the terms of the Natural Gas Act of 1938 or the Natural Gas Policy Act of 1978.
12. NOTICES: All notices required or permitted under this Agreement shall be in writing and shall be deemed to be delivered when
delivered personally, by courier, by telefax or telecopier if received during normal business hours, or by mail if properly addressed and
deposited in the United States mail,first class postage prepaid,to the applicable address shown in Article V on the front of this Agreement,
or to such address as either party may from time to time designate as the address for such purpose by like notice addressed to the other
party.
13. NON-WAIVER: Waiver by Buyer or Seller of a particular right or default hereunder will not be deemed a waiver of other rights or
defaults whether similar or dissimilar.
14. CHOICE OF LAW: This Agreement shall be governed according to the laws of the State of Texas. Venue on any action brought
hereunder shall be in Fort Worth,Tarrant County,Texas.
15. APPLICABLE LAW AND REGULATIONS: Buyer and Seller agree that this Agreement will be subject to all applicable laws,
regulations, rules and orders. In the event a regulatory or judicial decision or rate change shall have a detrimental economic impact upon
either party with respect to its performance under this Agreement,or in the event that compliance with such change by Seller shall result in a
material change in the method by which prices are calculated under this Agreement or a material change in the level of the components of
the pricing under this Agreement,then the party that suffers such detrimental economic impact or that is negatively affected by such material
change shall have the right to notify the other party, within thirty (30) days after becoming aware of such detrimental economic impact or
material change,in order to negotiate a modification to the terms of this Agreement so as to mitigate the impact of the event. If,after twenty
(20)days beyond the date of notice,the parties have been unable to negotiate a mutually satisfactory modification to the terms under this
Agreement, either party shall have the right to terminate this Agreement upon ten (10) days prior written notice to the other party. If such
right to terminate is not exercised within forty-five (45) days after the original date of notice hereunder, then the right to terminate this
Agreement shall be deemed to have been waived with respect to the particular event.
16. ASSIGNMENT: This Agreement may not be assigned by either party without the prior written consent of the other party,which consent
shall not be unreasonably withheld. This Agreement shall inure to and be binding upon s hereto and upon their respective
successors, heirs and assigns. In the event Buyer sells, leases or otherwise conveys the
faro,, as sold hereunder is
utilized,Buyer shall require its successor to assume the obligations of this Agreement.
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CIN SN"M ky
Gas,Rev.001002 �, ,iv,r7�r(�� ge 3 of 6
TERMS AND CONDITIONS
17. ENTIRE AGREEMENT: This Agreement, including the front page and any exhibits, constitutes the entire agreement between the
parties and there are no other representations, warranties, understandings or other agreements except as set forth herein. There will be no
modification of this Agreement except by written consent of all parties.
18. CONFIDENTIALITY: Seller and Buyer agree to keep all terms and provisions of this Agreement confidential and not to disclose the
terms of the same to any third parties; provided, however, each party shall have the right to make such disclosures, if any, to
governmental agencies and to its own attorneys, auditors, accountants and shareholders as may be reasonably necessary. If
disclosure is requested of Buyer by a Public Information Request, Buyer shall notify Seller of such request. Seller may take such action
as it deems necessary at its sole cost and expense, to attempt to protect the confidentiality. Buyer will not request any opinion from the
Office of the Attorney General.
Gas,Rev.001002 Page 4 of 6
EXHIBIT A
Attached to and made a part of the
Natural Gas Sales Agreement# 13781 between
TXU Energy Services(Seller)
and
City of Fort Worth
September 1, 2000 through August 31, 2001
Estimated Natural Gas Consumption for Buyer's Village Creek wastewater treatment plant
located at 4500 Wilma Lane in Fort Worth, Texas:
MMBTU/month MMBTU/month
Sep 2000 2481 Mar 2001 2412
Oct 2000 2500 Apr 2001 3500
Nov 2000 2500 May 2001 2326
Dec 2000 3157 Jun 2001 2740
Jan 2001 3510 Jul 2001 3750
Feb 2001 2662 Aug 2001 2700
Total Estimated Natural Gas Consumption for this Agreement is: 34,238 MMBtu
(' IRDS R0mccut k"'Kbob
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Date p
City of Fortp TXU Energy Services
Signature: Si nat
Date: Date: io 10
APROVBD AS TO CORM AND LECALITY: ATTESTED BY
Assistant ity Attorney A- AJ,/7,1"#) zz/,-7/L-11A
Gas,Rev.001002 Page 5 of 6
TXU Lone Star Pipeline TXU Gas Distribution
Attn: Transportation Contract Administration Attn: Gas Marketing & Transportation Sales
301 South Harwood 301 South Harwood
Dallas, Texas 75201 Dallas, Texas 75201
Gentlemen:
Please be advised that City of Fort Worth hereby appoints TXU Energy Services as its limited agent with authority to act on
its behalf in regards to the following functions:
1. TXU Energy Services is hereby authorized to obtain any information which either TXU Lone Star Pipeline (LSP)
and/or TXU Gas Distribution (TXU Gas) would otherwise release to Customer, which includes, but is not necessarily limited
to, all transportation rates available or potentially available to Customer, prices for natural gas available to Customer
pursuant to all existing TXU Gas tariffs, all information concerning historic transportation for and TXU Gas sales of natural
gas to Customer, all available tax rate information with respect to the sale and/or transportation of natural gas to or for
Customer, and any other information or document copies in the possession of LSP or TXU Gas which pertain to Customer's
transportation or purchase of natural gas via LSP or TXU Gas. Said authorization expressly excludes pricing-related
information of any other third party supplier of Customer.
2. TXU Energy Services is authorized to make nominations of natural gas volumes on Customer's behalf in
accordance with Customer's transportation agreement(s) with LSP and/or TXU Gas. Such nominations will be based upon
Customer's historical usage and/or written or verbal instructions received by TXU Energy Services directly from Customer.
3. TXU Energy Services shall have timely access to the most timely information possible with respect to Customer's
daily and monthly usage and/or transportation volumes.
This Limited Agency Authorization shall become effective from the date written above and shall remain in full force and effect
until terminated by Customer or TXU Energy Services upon ten (10) days prior written notice. Notice information for said
parties is set forth below:
TXU Energy Services City of Fort Worth, c/o Fort Worth Water Department
300 South St. Paul, Suite 260 EC P.O. Box 870
Dallas, Texas 75201-5598 Fort Worth, Texas 76101
Attn: Bill Rankin Attn: Robert McMillon
Phone: (214) 875-5274 ZFax: (81
-7591
Fax: (214) 875-5180 -5755
Si c el
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APROVED AS TO FORM AND LEGALITY: kc �redr„e,r
(Print Name)
ssisfar,+
Assistant City Attorney
P► L►'' �ana��r
](Title)
ATTESTED BY (Date) ���pp�d RECORD
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A)_ i4-M Page 6 of 6
Gas,Rev.0010 g
City of Fort Worth, Texas
"noor coati Council Communication
DATE REFERENCE NUMBER LOG NAME PAGE
9/26/00 **C-18253 1 60GAS 1 of 1
SUBJECT NATURAL GAS SALE CONTRACT WITH TXU ENERGY SERVICES
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute a contract with TXU
Energy Services for transportation and purchase of natural gas for the Village Creek Wastewater
Treatment Plant.
DISCUSSION:
On June 10, 1997 (M&C C-16094), the City Council authorized the execution of an annual contract with
two one-year options to renew with Lone Star Gas Company and Enserch Gas Company for the
purchase and transportation of natural gas. On May 14, 1999, Enserch Energy Services, Inc. changed
its name to TXU Energy Services. The last contract expired on June 1, 2000.
Natural gas is used to supplement gas produced by the Village Creek Wastewater Treatment Plant's
digesters. The gas is utilized by the plant's engines that produce electricity and treatment process air.
During FY1998-99, the Water Department purchased 19,698 million standard cubic feet of natural gas.
The Water Department estimates an expenditure of$180,000 during the contract period.
Due to the recent high natural gas prices, since June 1, 2000, the Water Department has opted to
purchase gas based on the Market Index Price on a month-to-month basis. TXU Energy Services has
since agreed to a one-year contract to provide the gas based on the Market Index Price that is fixed at
the beginning of each month. The Water Department also retains the right to lock into a favorable fixed
price for the remainder of the contract.
Contracting with TXU Energy Services will allow the gas supply for critical wastewater treatment
processes to remain stable. The Law Department has determined that this procurement is not required
to be competitively bid.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that funds are available in the current operating budget, as appropriated,
of the Water and Sewer Fund.
MG:k
Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY
Office by: (to)
Mike Groomer 6140 APPROVED
Originating Department Head: CITY COUNCIL
Dale Fisseler 8207 (from)
PE45 535010 0705002 $180,000.00 SEP 26 2000
Additional Information Contact: h�
Dale Fisseler 8207 s , acretary of the