HomeMy WebLinkAboutContract 29980 r*1'1 Y SECRETARY
FORT WORTH ` (�NTP4�'T NO. �Q�
Interim Letter Agreement
March 31, 2004
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") entered into a Letter Agreement on
December 31, 2003 ("2003 Letter Agreement'). The 2003 Letter Agreement was approved by
the City Council of the City of Fort Worth pursuant to M&C C-19945. The term of the 2003
Letter Agreement expires at midnight on March 31, 2004. The stated purpose of the 2003
Letter Agreement, among other things, was "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."
The Parties continue to work toward resolution of the Parties' disagreement regarding the
termination of the 2000 Agreement, and other related matters. Accordingly, for good and
valuable consideration, the Parties hereby agree to extend the expiration date of the 2003 Letter
Agreement to June 30, 2004. All other terms of the 2003 Letter Agreement shall remain in full
force and effect. This amendment to the 2003 Letter Agreement was approved by the City
Council of the City of Fort Worth on March 30, 2004 pursuant to M&C C-20017.
No changes, modifications, amendments or supplements to this 2004 Letter Agreement will be
valid unless agreed to in writing by the Parties.
PROVIDER CUSTOMER
LONE STAR ENERGY SERVICES, INC., CITY 9� FO
/RT WORT
A subsidiary of TXU Gas Company
By: By: 4 -
Name: Marc A. Ott
Title: Assis ant City Manager
ATTESTED BY APPROVED AS TO FORM AND
LEGALITY:
Assistant City Attorney
Page I of I ;,; �• �, �/►/��
-,ntract Authoriaetioa � �v�Hl� �6dVRF1
ITY MANAGER'S OFFICE
Tate THE CITY OF FORT WORTH * 1000 THROCKMORTI)N STREET * FORT WORTH, TEXAS 76102
817-392-6111 * FAx 817-392-61:34 _
f« Printed on recycled paper
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 313012004 - Ordinance No. 15939
DATE: Tuesday, March 30, 2004
LOG NAME: 60LONE REFERENCE NO.: **C-20017
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, for a total cost of
$231,384.
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 appropriated funds only 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 were unable to negotiate a transfer of the operation and maintenance of the
turbine system prior to expiration of the contract on December 31, 2003.
On January 20, 2004 (M&C C-19945), the City Council confirmed the execution of an interim letter
agreement that allowed for the operation, maintenance and other related services under terms virtually
identical to the original agreement until March 31, 2004.
The parties are continuing to negotiate a transfer of responsibilities under the agreement to another
provider that is agreeable to both parties. While progress has been made, an agreement will not be in
place before March 31, 2004, the end date of the current letter agreement. The parties have agreed,
subject to City Council approval, to a new letter agreement that allows for the operation, maintenance and
other related services as stated in the original agreement until June 30, 2004.
Logname: 60LONE Page 1 of 2
The new 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 same operation and
maintenance terms of the original agreement 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 toward an amicable
resolution of outstanding issues related to the continued operation and maintenance of the turbines.
FISCAL INFORMATION/CERTIFICATION:
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 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 3)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: 60LONE Page 2 of 2