HomeMy WebLinkAboutContract 29979 TXU
TXU Energy John Detzel
1601 Bryan Street
Suite 9-085 CITY SECRETARY
Dallas,TX 75201 CONTRACT NO .
Tel: 214 812 6790
Fax:214 812 8778
john.detzel @txu.com
Interim Letter Agreement
December 31, 2003
Mr. John Detzel Dale A. Fisseler, P.E.
TXU Energy City of Fort Worth Water Department
1601 Bryan Street, Suite 9-085 Administration Division
Dallas, Texas 75201 1000 Throckmorton
Fort Worth, Texas 76102
Re: Professional Energy Services for the Village Creek Gas Turbine Generation Plant (the
"Plant")
The undersigned (the"Parties", or individually, a"Party") presently disagree regarding the
termination of the"City of Fort Worth—Village Creek Project Professional Energy Services
Agreement by and between City of Fort Worth and Lone Star Energy Services, Inc. dated
December 20th, 2000," City Secretary Contract No. 26457 (the "2000 Agreement"). The Parties
wish to enter into this Interim Letter Agreement to provide for the continued operation of the
Plant pending resolution of the disagreement. Therefore, for the following good and valuable
consideration, the Parties agree as follows:
I. This Agreement is for interim settlement purposes, shall not constitute any admission
regarding, and shall not be used or asserted to prejudice either Parry's position in, any
disagreement over the termination of the 2000 Agreement, or any dispute regarding the
related agreement titled "Terms and Conditions for Supply of Landfill Gas," City
Secretary Contract No. 27281.
2. The payment terms of this Letter Agreement, pursuant to paragraph 4.d below, are not in
effect until the Agreement is approved by the Fort Worth City Council. The Director of
the Fort Worth Water Department agrees to use all best efforts to place this Letter
Agreement on the City Council's January 20, 2004 agenda for consideration by the
Council, and to recommend its approval. Any amounts paid in satisfaction of the charges
due under the terms of this Agreement shall be accounted for as if they also were paid in
satisfaction of the like charges, if any, that may be due for the same period pursuant to
the 2000 Agreement.
3. Except as provided in paragraph 2 above, all other terms of this e
effective at 12:01 a.m. on January 1, 2004 and shall extend throi igh.
Page 1 of 3 f�, : " 1� 1 �I .V.
Interim Letter Agreement
December 31, 2003
except that either Party may terminate this agreement, with or without cause and in their
sole discretion, by providing 30 days notice, in writing, to the other Party, and the
Provider may terminate this Agreement immediately, by providing written notice if the
Fort Worth City Council does not approve this Agreement before January 21, 2004.
4. The following numbered Articles of the 2000 Agreement are incorporated into this Letter
Agreement by reference, as if set forth fully herein:
a. Article 3. Professional Energy Services (excluding the final paragraph of the article
which begins "Upon completion of construction of the System . . .")
b. Article 4. Representations and Warranties of Customer(excluding paragraph 4.d.)
c. Article 5. System (excluding paragraph 5.f.)
d. Article 6. Professional Energy Services Charges (except that, with respect to
paragraph 6.a., to commence the schedule set forth therein, charges shall commence
on January 1, 2004 and the Fixed Component shall be first invoiced on or about
February 1, 2004)
e. Article 7. Personnel (excluding paragraph 7.b.)
£ Article 8 Termination(excluding paragraphs 8.a and 8.d.)
g. Article 9. Indemnification, Liability and Insurance
h. Article 10. Confidentiality
i. Article 11. Miscellaneous Provisions (excluding paragraphs l l.c. and I Lk)
j. The Definitions of Paragraph 1, and Attachments A (excluding Part I), B (excluding
the Consulting Component), C & D, to the extent they are applicable to the foregoing
paragraphs, and not inconsistent with this Letter Agreement.
5. To the extent that the terms of the 2000 Agreement incorporated pursuant to Paragraph 4
above conflict with the express terms of this Letter Agreement, then this Letter
Agreement shall control.
6. No changes, modifications, amendments or supplements to this Agreement will be valid
unless agreed to in writing by the Parties.
7. As soon as practical, Provider will send Customer a written, itemized list of all of the
equipment at the Plant site that is owned by Provider.
8. The intent of this Agreement is to provide for the continued operation of the Plant, under
operations and payment terms that are virtually identical to the terms of the 2000
Agreement,to the mutual benefit of both Parties, without prejudice to the interests of
either, and pending resolution of the Parties' disagreement regarding the termination of
the 2000 Agreement. Accordingly, wherever possible, this Letter Agreement shall be
implemented and interpreted in good faith to effectuate that intent.
9. This Agreement may not be assigned by either Party.
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Interim Letter Agreement
December 31, 2003
PROVIDER
LONE STAR ENERGY SERVICES, INC.,
A subsidiary of TXU Gas Company
By: W— off/
(Print N e• JG.v.) L�
Title: >'e*e"-"54
CUSTOMER
CIT OF FORT WORT
�'Assistan-rCity Manager
APPROVED AS TO FORM AND LEGALITY:
9 f
4K��
ATTESTED BY
Contract Authoriaatioa
Date
T�'
Page 3 of 3 f ' _
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 1/20/2004 - Ordinance No. 15838
DATE: Tuesday, January 20, 2004
LOG NAME: 60LONESTAR REFERENCE NO.: C-19945
SUBJECT:
Appropriation Ordinance and Confirmation of Letter of Agreement with Lone Star Energy Services,
Inc. for Professional Energy Services for the Village Creek Gas Turbine Generation Plant
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the transfer of$231,384 from the Water and Sewer Fund to the Sewer Capital Project Fund;
and
2. Adopt the attached appropriation ordinance increasing the estimated receipts and appropriations in the
Sewer Capital Project Fund in the amount of$231,384, from available funds; and
3. Confirm the execution of an Interim Letter Agreement with Lone Star Energy Services, Inc. for
professional energy services for the Village Creek Gas Turbine Generation Plant.
DISCUSSION:
On December 19, 2000 (M&C C-18397), the City Council authorized the execution of an agreement with
Lone Star Energy Services, Inc., a subsidiary of TXU Energy, for the operations and maintenance of the
Village Creek Wastewater Treatment Plant gas turbine power generation system. Under the terms of the
agreement, the City agreed to outsource operation of the system to Lone Star Energy Services, Inc. for an
accelerating monthly fee over a 20-year period. The agreement was structured to provide the City with the
benefit of reducing overall energy costs for the system, and the ability to potentially sell any excess power
generated at the Village Creek Wastewater Treatment Plant back to the energy grid.
The City Council only appropriated funds to cover the contract for the period October 1, 2003, to December
31, 2003, after staff determined that Lone Star Energy Services, Inc. planned to assign the contract to an
unknown provider. The parties attempted to negotiate a transfer of the operation and maintenance of the
turbine system prior to expiration of the contract on December 31, 2003, and agreed on December 29,
2003, subject to City Council approval, to the terms of a letter agreement that allows for the operation,
maintenance and other related services under terms virtually identical to the original agreement until March
31, 2004.
The letter agreement provides for the City to pay the monthly fee of $77,128, the same fee that would have
been paid under the December 2000 agreement for this time period. The operation and maintenance terms
of the original agreement also are adopted, as set forth in the letter agreement. During the term of the letter
agreement, the parties agree to continue to negotiate in good faith towards a amicable resolution of
outstanding issues related to the continued operation and maintenance of the turbines.
FISCAL INFORMATION/CERTIFICATION:
Logname: 60LONESTAR Page 1 of 2
The Finance Director certifies that upon approval and completion of recommendation No. 1 and adoption of
the attached appropriation ordinance, funds will be available in the current capital budget, as appropriated,
of the Sewer Capital Project Fund.
TO Fund/Account/Centers FROM Fund/Account/Centers
1&2)PS58 472045 070580300120 $231.384.00 1)PE45 538070 0709020 $231,384.00
2)PS58 539120 070580300120 $231,384.00 PS58 539120 070580300120 $231,384.00
Submitted for City Manager's Office by: Marc Ott (8476)
Originating Department Head: Dale Fisseler (8207)
Additional Information Contact: Dale Fisseler (8207)
Logname: 60LONESTAR Page 2 of 2