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R-01-11-05-3A2 - 11/5/2001RESOLUTION NO. R- 01- 11- 05 -3A2 WHEREAS, H -GAC Energy Purchasing Corporation (the "Corporation ") is a non - profit political subdivision corporation, as defined in Chapter 303 of the Texas Local Government Code (to be codified effective September 1, 2001 as Chapter 304); and WHEREAS, the Corporation is authorized to negotiate on behalf of its members for the purchase of electricity, make contracts for the purchase of electricity, purchase electricity, and take any other action necessary to purchase electricity for use in the public facilities of the political subdivisions represented by it; and WHEREAS, the City of Round Rock ( "City ") has adopted a resolution authorizing participation in the Corporation; and WHEREAS, the Corporation has negotiated and contracted with various Retail Electric Providers (each a "REP ") and has entered into a contract with TXU Energy Services ( "TXU ") as referenced in the Terms and Conditions for Supply of Electricity ( "Supply Agreement ") attached hereto as Exhibit "B "; and WHEREAS, the Corporation has received and distributed to its members the initial proposal pricing ( "Initial Pricing ") of TXU and the City has reviewed the Initial Pricing, which is attached hereto as Exhibit "A " and 0AN010RL0O % \os \wDOX \RESOLVrr \11lllosnz .WP" /ale WHEREAS, the City acknowledges that the Initial Pricing is not binding on TXU but will be updated during a subsequent time period to be announced by the Corporation, at which time final closing pricing (the "Final Pricing ") will be announced; and WHEREAS, the City has reviewed a Supply Agreement with TXU and wishes to enter into such agreement provided that the Final Pricing does not exceed the Initial Pricing; Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, 1. The Supply Agreement with the Initial Pricing made a part thereof is hereby approved. 2. The Mayor of the City is hereby designated as "Authorized Representative," with full power and authority to execute the Supply Agreement, so long as the Final Pricing is less than or equal to the Initial Pricing, exclusive of any regulated rates subject to change, which the City has elected, and take all other actions deemed necessary or appropriate to consummate the transaction authorized by this Resolution. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered 2 and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 5th day of November, 2001. ATTEST: CHRISTINE R. MARTINEZ, City Secre4ary 3 zit, e., ROB " STLUKA, JR Mayor City of Round Rock, Texas • TXU TXU Energy Services TERMS AND CONDITIONS FOR SUPPLY OF ELECTRICITY These Terms and Conditions for the Supply of Electricity ( "Terms "), together with any Offer for Supply of Electricity ( "Offer ") and any other attachments, exhibits or appendices (including, as appropriate, one or more Price Sheets) as may be hereafter agreed to by Buyer (the term Buyer includes its employees and/or agents as appropriate), and Seller (the term Seller includes its assignees and/or as appropriate its employees, agents and/or subcontractors), shall constitute the "Agreement" for the supply of electricity to the Premise(s) of Buyer set forth in Exhibit "A" attached hereto. Seller and Buyer may hereinafter be referred to individually as a "Party" and collectively as the "Parties ". " Premise(s)" herein shall mean the designated (in Exhibit "A ") property or facilities and associated metered account(s) identified by an Electric Service Identifier ( "ESI "), which is a unique and permanent identifier assigned to each Premise(s). A "Price Sheet(s)" is a document(s) containing a description of the method for determining charges payable by Buyer to Seller for electncity supplied pursuant to this Agreement, for specified Premises and shall contain the Offer Price A condition precedent for the effectiveness of the Agreement shall be the execution of a separate Offer, and agreement by the Parties on the terms contained in Exhibit "A" and the appropriate Price Sheet(s). I. SUBJECT MATTER AND QUANTITY. Seller shall sell and cause delivery, and Buyer shall purchase and receive at the Point of Delivery, for use only at the Premise(s), Buyer's non - residential electricity requirements set forth on Exhibit "A" attached hereto. "TDSP" herein shall mean a transmission and/or distribution provider under the jurisdiction of the Public Utility Commission of Texas ( "PUCT ") that owns and maintains a transmission or distribution system for the delivery of energy; including a Municipally owned utility or Rural Electnc Cooperative. "Point of Delivery" herein shall mean the point where TDSP's conductors are connected to Buyer's conductors at or near Buyer's Premises. II. [This Section has been deleted intentionally.] III. TERM. The "Agreement Term" shall be the time period, as referred to in the Offer, during which the prices contained in the Price Sheets are and shall remain in force. IV. AGREEMENT RENEWAL /PRICE RENEGOTIATION. If Buyer and Seller have not agreed to new pricing and terms prior to thirty calendar days before the expiration of the then current Offer, and Buyer has not arranged for electricity from another supplier prior to the expiration of such Offer, then, effective upon expiration of the Offer and until Buyer arranges for electricity with another supplier or under a new Offer with Seller, Seller agrees to sell and deliver and Buyer agrees to purchase and receive electricity under terms and prices of Seller's then current Standard List Price Offer applicable to businesses of same or similar nature as Buyer. "Standard List Price Offer" herein shall mean the Seller's price charged to customer's purchasing electricity without a valid Offer for the Supply of Electricity. The Standard List Pnce Offer may change from time to time at the discretion of Seller. V. CALCULATION AND PAYMENT OF CHARGES. 5.1 Seller will invoice Buyer for electricity delivered to the Premise(s) during each monthly billing cycle of the Agreement Term, and for any other amounts due from Buyer to Seller hereunder, in accordance with the applicable Price Sheet, provided, however, in the event Buyer takes quantities of electricity in any month that are in excess of one hundred twenty percent (120.0 %) of the aggregated quantities listed in Exhibit "A ", Seller shall have the option to price such excess quantities at 105.0% of the then current retail market value. If Buyer, (provided such is not the result of a force majeure event), takes quantities of electricity in a month that are less than eighty percent (80.0 %) of the aggregated quantities listed in Exhibit "A ", in addition to paying for those quantities actually taken in accordance with the applicable Price Sheet, Buyer agrees to pay Seller the positive amount, if any, calculated as follows. (80.0% of the aggregated quantities on Exhibit "A" for the applicable month minus the aggregated quantities actually used by Buyer during the month, the "Shortfall Quantity") multiplied by (the contracted puce from the applicable Price Sheet minus 95.0% of the then current retail market price for the Shortfall Quantity).5.2 If Buyer has more than one Premise, the monthly billing cycle may vary for different Premises, and may not coincide with a calendar month. In the event that an interval demand recorder ( "IDR ") must be installed at any Premise, if such IDR has not been installed prior to the commencement of the Agreement Term, Seller reserves the right to calculate prices based upon the appropriate deemed load profile, as obtained by Seller from the PUCT, until such IDR can be installed. 5.3 Buyer shall pay the invoiced amount on or before the due date specified in the Offer, and/or notify Seller within ten business days of the invoice date if Buyer disputes any part of the invoice together with Buyer's reasons for disputing the invoice (however, Buyer's payment of an invoice and/or failure to dispute an invoice by the due date, in and of itself, shall not constitute a waiver by Buyer of Buyer's right to contest later the correctness of such invoice), but the undisputed part shall remain due and payable. In the event that Buyer gives notice of such dispute, the Parties shall, for a period of thirty calendar days following Seller's receipt of that notice, pursue diligent, good faith efforts to resolve the dispute. If the Parties are unable to resolve a disputed invoice during that thirty day period, Seller may require, in the event it is subsequently determined that Buyer should pay Seller all or part of the disputed amount, that Buyer pay interest on such amount , at a rate equal to (t) one H -GAC Energy Purchasing Corporation Page 1 of 11 O: \n dus\ corr \gnl \elec_agg \hgac\00015042.DOC percent (1 %) per month or (u) the highest rate allowed by law, whichever is the lesser, from the date such payment was onginally due until the same is paid. Following resolution of the dispute, any amount found payable (including interest) shall be paid within thirty calendar days. If Buyer fails to pay any amount due (including any disputed amount withheld which is subsequently found to have been payable), Seller may, at its option, pursue any or all of the following actions or remedies: (a) accrue Interest on the unpaid portion at a rate equal to that descnbed earlier in this paragraph, from the date such payment is due until the same is paid, or (b) transfer Buyer to the provider of last resort ( "POLR "). POLR shall be defined as a retail electric provider that has been designated by the PUCT to provide a basic, standard retail service package to requesting or defaulting customers. 5.4 If Buyer notifies Seller in wnting of ajustifiable concern regarding the accuracy of an invoice hereunder, Seller shall make available to Buyer dunng normal business hours the records in Seller's possession reasonably necessary for Buyer to verify the accuracy of its bill. Provided, however, neither Party may request any adjustment or correction of any statement or payment unless written notice of such request for adjustment or correction is furnished within twenty-four (24) months of the date of the statement or payment for which such adjustment or correction is requested. 5.5 If this Agreement is terminated for any reason (including where Buyer terminates in accordance with Section VII) and Buyer does not arrange for a new electricity supply agreement with Seller or another supplier, Seller, until Buyer arranges for a new electric supply agreement with Seller or another supplier, may (in addition to other remedies) charge Buyer for any electricity used at the Premise(s) after the effective date of the termination, and subject to these Terms, at Seller's then current Standard List Price Offer applicable to businesses of same or similar nature as Buyer. This sub - clause shall survive termination of this Agreement. 5.6 Payments may be made by check, wire transfer, direct debit or electronic data interchange (on terms reasonably acceptable to both Parties), and notwithstanding anything to the contrary contained herein, must be received by the receiving Party on or before the dates specified in Article II of the Offer. The address to which payments are to be made shall be as set forth in the Offer. For Buyer to pay Seller other than by check, Buyer needs to obtain required information / agreements with Seller. If Buyer fads to pay the invoiced amount to Seller by the Due Date, and such amount is not disputed as provided in Section 5.3 the undisputed invoiced amount will accrue interest at the rate of 12% per year, and, in addition, Seller may pursue, but rs not required to pursue, available legal remedies for collection of the unpaid invoice and late - payment interest charges, including termination of the Agreement in accordance with the procedures set forth in Article VII. 5.7 In the event Buyer ever takes electricity exceeding the Maximum kW for each Premise(s), each time It does to Buyer shall pay the Over Capacity Charges as stated in the applicable Price Sheet. "Maximum kW" for each Premise is set forth on Exhibit "A ", and shall be recorded at the TDSP Point of Delivery. 5.8 Buyer agrees that it shall abide and be bound by the Agreement through the end of the Agreement Tenn and shall not, dunng the Agreement Term, claim any right to pricing based upon the Price to Beat. "Price to Beat" shall mean a price for electricity, as determined pursuant to the Public Utility Regulatory Act, Section 39.202, charged by an affiliated retail electric provider to eligible customers. VI. METERING EQUIPMENT. 6.1 The supply of electricity to Buyer at the TDSP Delivery Point(s) shall be measured by Metering Equipment. "Metering Equipment" herein shall mean any and all equipment required for the measurement of demand, energy, reactive demand or reactive energy and the times during which said demand or energy is consumed. Unless the accuracy of the Metering Equipment is disputed by notice given by either Party to the other the Metering Equipment shall be deemed to be accurate. If notice is given (unless otherwise agreed) the Metering Equipment shall be examined within a reasonable period by the TDSP in accordance with the applicable Substantive Rules of the PUCT. If such test finds that the inaccuracy of the registration of kWh or kW at normal loads exceeds that allowed by ANSI standard C.12, suitable adjustment shall be made in the accounts rendered by Seller, and, within a reasonable period following that determination, the Metering Equipment shall be re- calibrated or replaced by the entity that installs, validates, registers, and maintains the physical meter required on a Premise to measure customer usage. If such test fords the Metering Equipment to be accurate within the said limits, the Metering Equipment shall be deemed to be accurate and the cost of moving, testing, and replacing the Metering Equipment shall be paid by the Party who issued the notice. If it is discovered that any reading of the Metering Equipment or translation of the readings into charges have been incorrect then the amount of money due to and from Seller shall be paid forthwith. 6.2 If appropriate meter reading personnel cannot gain access to read the Metering Equipment, or the Metering Equipment fails to register correctly the amount of electricity supplied, or the readings are not communicated to Seller m time for whatever reason, Seller shall reasonably estimate the quantity of the electricity consumed and Buyer shall pay the charges for the estimated amounts subject to any adjustments which may be necessary following the reading. Buyer shall notify Seller of any dispute or query regarding the Metering Equipment made by the TDSP. Seller is not responsible for damage to the Metenng Equipment unless caused by Seller's negligence. VII . TERMINATION OF AGREEMENT. 7.1 A matenal breach of this Agreement includes: (a) the failure of either Party to make any payment due to the other Party pursuant to the terms hereof, provided, however, that notwithstanding the foregoing or anything else to the contrary in this Agreement, Supplier may not terminate this Agreement for non - payment by Buyer of an undisputed invoiced amount unless the undisputed invoiced amount remains unpaid for thirty (30) days after the due date; (b) the failure of a Party to comply with any other material term of this Agreement; (c) a Party H - GAC Energy Purchasing Corporation Page 2 of 11 O:\ wdox\ corr \gnl \elee \hgac \00015042.D OC becomes or declares that it is insolvent or bankrupt, or becomes or declares that it is the subject of any proceedings, or is taking any action whatsoever, relating to its bankruptcy, liquidation or insolvency, or is not generally paying its debts as they become due, (d) a Party fails to comply with any federal, state or local law, regulation, rule or order that causes a material adverse affect upon this Agreement, either Party or either Party's performance of its obligations described in this Agreement; (e) if Buyer enters into another electricity supply agreement for any Premise(s) with another retail energy provider that covers any period dunng the Agreement Term; or (1) if Buyer, except as provided in paragraphs 7.2 and 14.3 below, sells, leases, closes or otherwise conveys or assigns any Premise(s) in which the electricity sold hereunder is utilized. If either Party commits a material breach of this Agreement, the non- breaching Party shall give written notice to the breaching Party that describes the breach in reasonable detail ( "Original Notice "). The non - breaching Party may, in its sole discretion, and without prejudice to any other right under this Agreement, at law, or in equity, terminate this Agreement (i) by providing an additional notice if the breaching Party does not pay all amounts due and owing set forth in the Original Notice within ten calendar days of the date of the Original Notice, or (ii) effective immediately in the Original Notice in the event the breach pertains to (c), (e), or (f) in this paragraph above, or (iii) by providing an additional notice if the breaching Party fails to cure any breach other than one related to (a), (c), (e), or (f) in this paragraph above within thirty calendar days of the date of the Ongmal Nonce. 7.2 (a) In the event Buyer sells, closes, or leases a particular Premise, without selling, closing, or leasing all of the Premises, Buyer shall have the right to delete that particular Premise and the quantities of electricity attributable to that Premise through the end of the Agreement Term (the "Liquidated Quantities ") from this Agreement without terminating the Agreement (a "Premise Buyout Option "). If Buyer desires to exercise a Premise Buyout Option with regard to a Premise, Buyer shall notify Seller in writing at least thirty calendar days prior to the effective date. Upon the exercise of a Premise Buyout Option, in the event a new owner of the applicable Premise (i) is willing to sign a new contract with Seller upon the same terms and conditions as Buyer's contract, (ii) is deemed creditworthy by Seller, and (iii) the new owner and Seller can legally enter into such a contract in accordance with the rules and regulations of the PUCT, then the Premise will be deleted from this Agreement and neither Party will owe any compensation to the other. In the event that the new owner (i) is unwilling to sign a contract with Seller upon the same terms and conditions, (ii) is not reasonably deemed creditworthy by Seller, or (iii) the new owner and Seller cannot legally enter into the contract, then Buyer agrees to pay Seller the positive amount, if any, calculated as follows. the Liquidated Quantities multiplied by (the price that Buyer would have paid for the Liquidated Quantifies through the end of the Agreement Term according to the applicable Price Sheet, minus 95.0% of the then current retail market price). Buyer shall pay such amount, if any, to Seller within twenty days of the date of liquidation. Exhibit "A" shall be modified to reflect the deletion of such Premise and its Liquidated Quantities, and all other terms and conditions of this Agreement shall remain in full force and effect with respect to the remaining Premises. (b) In the event Buyer reduces its operations at a Premise, Buyer shall have the right to delete the quantities of electricity attributable to the reduction in operations at such Premise from the effective date of the reduction through the end of the Agreement Term (the "Reduced Operations Liquidated Quantities ") from this Agreement without terminating the Agreement. If Buyer desires to exercise such nght with regard to a Premise, Buyer shall notify Seller in writing at least thirty calendar days prior to the effective date. Upon the exercise of such right, Buyer agrees to pay Seller the positive amount, if any, calculated as follows: the Reduced Operations Liquidated Quantities multiplied by (the price that Buyer would have paid for the Reduced Operations Liquidated Quantities through the end of the Agreement Term according to the applicable Price Sheet, minus 95.0% of the then current retail market price for the liquidated quantities). Buyer shall pay such amount, if any, to Seller within twenty days of the date of liquidation Exhibit "A" shall be modified to reflect the deletion of the liquidated quantities, and all other terms and conditions of this Agreement shall remain in full force and effect. (c) Both Parties will work in good faith during the Agreement Term to reasonably accommodate and assist Buyer with the management of its electricity needs at the Premises. Since it is not possible to foresee the evolution of the deregulated power industry in Texas, various reasonable options for Buyer to achieve this are evolving and under development by Seller. For example, if Buyer desires to contract for additional electricity, both Parties will work in good faith to mutually agree upon the terms and conditions that are economically viable to both Parties. However, notwithstanding the previous language, nothing contained herein shall be construed as to deny or diminish the economic benefit of this Agreement to either Party, and neither Party shall be under any obligation whatsoever to agree to a modification that would have such result. 7.3 (a) In the event that this Agreement is terminated by Seller pursuant to Section 7.1,the Parties agree, that in addition to all amounts Buyer may owe Seller prior to the termination, Seller's damages shall be the positive amount, if any, calculated as follows: (all remaining unpurchased quantities of electricity reflected on Exhibit "A" through the end of the Agreement Term) multiplied by (the price that Buyer would have paid for the unpurchased quantities through the end of the Agreement Term according to the applicable Pnce Sheet, minus the current retail market pnce for the unpurchased quantities at the time of termination) plus (all reasonable costs and expenses incurred by Seller) Such amount shall be immediately due and payable within thirty calendar days following such termination. The current retail market price in this instance shall mean the price that Seller would reasonably be able to obtain from a bona -fide third party if entering into a contract with another customer for the unpurchased quantities, and for the remaining term after the Early Termination Date through the end of the Agreement Term. Seller shall have a duty to use commercially reasonable efforts to mitigate its damages. (b) In the event that this Agreement is terminated by Buyer pursuant to Section 7.1,the Parties agree, that in addition to all amounts Seller may owe Buyer prior to the termination, Buyer's damages shall be the positive amount, if any, calculated as follows: (all remaining unpurchased quantities of electricity reflected on Exhibit "A" through the end of the Agreement Term) multiplied by (the current retail market pnce for the unpurchased quantities at the time of termination, minus the puce that Buyer would have paid for the unpurchased quantities through the end of the Agreement Term according to the applicable Price Sheet) plus (all reasonable costs and expenses incurred by Buyer) H -GAC Energy Purchasing Corporation O:\ wdoxlcorr \gnnclec_agglhgac \00015042.DOC Page 3 of 11 Such amount shall be immediately due and payable within thirty calendar days following such termination. The current retail market price in this instance shall mean the price Buyer would have to pay if entering into a contract with another Retail Electric Provider ( "REP ") for the same quantities, and for the remaining term after the Early Termination Date through the end of the Agreement Term. The price offered by the POLR, or any REP's Standard List Price Offer, shall not be used to calculate Buyer's damages. Buyer shall have a duty to use commercially reasonable efforts to mitigate its damages. 7.4 Buyer may terminate this Agreement, on a prospective basis, in the event of non - appropriation of funding for this Agreement by Buyer's Governing Body. Buyer agrees, to the full extent allowed by Texas law, that if any funds are appropriated for electricity costs, such funds shall be applied first to the cost of electricity provided pursuant to this Agreement. Buyer agrees to notify the REP in writing of such non- appropriation at the earliest practicable time subsequent to the failure to appropriate, and as of Buyer's termination date, Seller shall have no further duty to supply Electricity to Buyer and shall move service for the Accounts to the POLR as established by the PUCT on the date of termination for non - appropriation. VIII . FORCE MAJEURE. If either Party is unable to perform its obligations in whole or in part due to an event of force majeure as defined herein, then the obligations of the affected Party shall be suspended to the extent made necessary by such event. The term "force majeure" means any cause not within the control of the Party claiming relief, including, but not limited to, Acts of God, including magnetic disturbances but not including extremes of temperature alone; arrests, orders, directives, restraints and requirements of the government and governmental agencies, either federal or state (excluding Buyer), civil or military; civil disorder; stnkes or labor disputes; failure, repair or change of or obstruction in electnc power lines, equipment or machinery; the failure of the TDSP to receive, transport, or deliver, or otherwise perform, unless due to the failure of the Party claiming force majeure to perform such Party's obligations hereunder; an event of force majeure of Seller's supplier(s) or with Buyer's electrical equipment at Buyer's Premises; or any other cause which by the exercise of reasonable diligence such Party could not have prevented or is unable to overcome. 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 restonng 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. Neither financial distress nor the inability of either Party to make a profit or avoid a financial loss shall be deemed a force majeure event, nor shall (i) changes in the market prices of fuel, energy, or electricity, or (ii) a Party's financial inability to perform its obligations under this Agreement, constitute an event of Force Majeure hereunder. IX. WARRANTIES AND LIMITATIONS OF LIABILITIES. 9.1 Seller hereby warrants to Buyer that at the time of delivery of electricity hereunder it will have good title and/or the right to sell such electricity, and that such electricity will be free and clear of all liens and adverse claims. Title will pass to Buyer at the TDSP Point of Delivery. EXCEPT AS PROVIDED FOR IN THE FIRST SENTENCE OF THIS PARAGRAPH, SELLER EXPRESSLY DISCLAIMS AND MAKES NO WARRANTIES, WHETHER WRITTEN OR VERBAL, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS, IMPLIED, OR STATUTORY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 9.2 Unless otherwise expressly provided herein, any liability under this Agreement will be limited to direct actual damages as the sole and exclusive remedy, and all other remedies or damages at law or in equity are waived. Neither Party will be liable for consequential, incidental, punitive, exemplary or indirect damages, including lost profits or other business interruption damages, whether in tort or contract, under any indemnity provisions or otherwise in connection with this Agreement. The limitations imposed on remedies and damage measurement will be without regard to cause, including negligence of any Party, whether sole, joint, concurrent, active or passive; provided no such limitation shall apply to damages resulting from the willful misconduct or gross negligence of any Party. X . NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be deemed to be delivered when deposited in the United States mail (first class, registered or certified), postage prepaid, when deposited with an overnight delivery service, prepaid to the applicable Buyer's address shown in the attached Exhibit "A ", and Seller's address as shown in the Offer, or to such address as either Party may from time to time designate as the address, or in the case of hand delivery, when delivered to a representative of either Party by a representative of the other Party; provided, however, except for payments of amounts due hereunder, either Party may provide such items hereunder by electronic mail or facsimile to the other Party at the applicable telephone number shown on the current Offer, and further provided, the original copy of such item shall be sent to the other Party within three business days thereafter. XI . APPLICABLE LAW AND REGULATIONS. 11.1 This Agreement is subject to all applicable laws, regulations, rules and orders. 11.2 In the event a judicial decision, order, new law or regulation, or a change in any law or regulation, requires a change in the method by which prices are calculated under this Agreement, or materially and directly affects a Party's ability to perform its obligations hereunder, then the Party that is negatively affected shall have the right to notify the other Party, within thirty calendar days after becoming aware of such demmental change. The Parties shall attempt to negotiate a modification to the terms of this Agreement so as to mitigate the impact of the event. If, after twenty calendar days beyond the date of notice, the Parties have been unable to negotiate a mutually satisfactory modification to the terms of this Agreement, either Party shall have the right to terminate this Agreement upon ten calendar days prior written notice to the H - GAC Energy Purchasing Corporation 0: \wdox 1co r •\gnnelec_agg\hgac \00015042.DOC Page 4 of 11 other Party. If such right to terminate Is not exercised within forty -five calendar days after the date of the original notice hereunder, then the right to terminate this Agreement shall be waived with respect to the particular event. 11.3 Seller agrees to maintain all necessary certifications and comply with all necessary PUCT and/or ERCOT requirements in order to perform its obligations under this Agreement. 11.4 Notwithstanding anything contained in this Agreement, Buyer shall not attempt to utilize, under the provisions of this Section XI or Section VIII, or in any other manner, its inherent powers as a political subdivision of the State of Texas in order to circumvent in any way the terms and provisions of this Agreement or the intent of this Agreement. XII . FAILURE OR TEMPORARY DISCONTINUANCE OF SUPPLY. 12.1 The supply of electricity may be disconnected in the event of Force Majeure in respect of this Agreement; or if at TDSP's discretion it is necessary to do so for any of the following reasons: (a) to avoid danger; or because failure to disconnect the supply of electricity would or might involve TDSP being in breach of applicable regulations or laws; or to avoid interference with the supply of electricity to another person which TDSP reasonably believes may be caused or result from Buyer's equipment or device used at the Premise(s); or to enable TDSP or TDSP's representatives to inspect, maintain or repair any part of the equipment or the Distribution System; or in case of accident or other emergency affecting or likely to affect the Distribution System or any other system through which (directly or indirectly) Seller or TDSP receives or supplies electricity; or (b) because Buyer's electric connections or systems are deemed by TDSP to present a hazard. 12.2 In the event that the supply of electricity to Buyer's Premises is interrupted due to the matenal breach by Seller of its contractual obligations under this Agreement and not due to (t) a force majeure event, (ii) as provided in paragraph 12.1 above, or (iii) the failure of Buyer to comply with its obligations under this Agreement, then, in the event Buyer is required to purchase replacement electricity from a third party during such interruption, Seller shall be liable for the positive amount, if any, calculated as follows: the quantities so interrupted by Seller multiplied by [the then current retail market price (or the POLR price if Buyer was unable to purchase electricity from another retail electricity provider) minus the contracted price from the applicable Price Sheet]. XIII. RESPONSIBILITY. 13.1 Buyer Responsibility. Buyer assumes full responsibility for electric energy fumished to Buyer at and on Buyer's side of the Point of Delivery, and agrees, to the full extent allowed by law, to hold harmless Seller, its parent company and all of its affiliates, and all of their respective officers, directors, shareholders, associates, employees, servants, and agents (hereinafter collectively referred to as "Seller Group "), from and against all claims, losses, expenses, damages, demands, judgments, causes of action, and suits of any kind (hereinafter collectively referred to "Claims "), including Claims for personal injury, death, or damages to property occurring on Buyer's side of the Point of Delivery and upon the Premise(s), arising out of or related to the electric power and energy and/or Buyer's performance under the Agreement. 13.2 Seller Responsibility. Buyer acknowledges and understands that (i) Seller never obtains physical possession or control of the electricity, (ii) Seller does not own nor have control of the electric transmission wires and equipment, and that they are owned and/or controlled by the TDSP, (iii) all meter reading, and repair services will be provided by employees or agents of the TDSP, (iv) all responsibilities and liabilities of the TDSP are set forth in the tariff regulations as approved by the PUCT, and (v) the employees and agents of the TDSP are not employees or agents of Seller. Seller shall not have any obligation whatsoever to indemnify, defend, nor hold harmless Buyer, its parent company and all of its affiliates, and all of their respective officers, directors, shareholders, associates, employees, servants, and agents (hereinafter collectively referred to as "Buyer Group "), against any Claims, on either side of the Point of Delivery, arising out of or in any way related to the electricity and/or the delivery thereof, including, without limitation, the actions of the TDSP and its employees and agents, except in the event, and only in the event, that such Claims are the direct result of the sole negligence and/or intentionally wrongful act of an employee, or agent under the exclusive control, of Seller. XIV. NIISCELLANEOUS. 14.1 TDSPs. Buyer and Seller agree to all terms and conditions (adopted pursuant to statutes, regulations or other lawful authority) of the TDSPs that provide electricity delivery services to the Premise(s) or other Buyer facilities, which may from time to time be amended, are made part of this Agreement. 14.2 Choice of Law; Venue. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW PRINCIPLES WHICH OTHERWISE MIGHT BE APPLICABLE. 14 3 Assignment. In the event that Buyer conveys legal title to all of the Premises to the same entity, Buyer may request from Seller the right to assign its rights and obligations under the Agreement to the new owner of the Premises, and in such event, Seller shall not unreasonably withhold its consent. Any purported assignment without Seller's prior written consent shall be null and void. Buyer shall not have any right whatsoever to assign this Agreement to any party that is not the owner of all of the Premises, and any purported assignment shall be null and void. Seller may assign this Agreement to another party, with the prior written consent of Buyer, which consent shall not be unreasonably withheld. Any purported assignment without Buyer's prior written consent shall be null and void. This Agreement shall inure to and be binding upon the Parties hereto, and their respective successors and assigns. H -GAC Energy Purchasing Corporation O:\wdoz \corr\gnl\elec agg \hgad00015042.DOC Page 5 of 11 14.4 Entirety of Agreement. It is the intention of the Parties that the Agreement shall contain all terms, conditions, and protections in any way related to, or arising out of, the sale and purchase of the electricity, and supersedes all prior agreements, whether written or oral. It is also the intention of the Parties to agree to terms of service different than those that would otherwise apply under the Substantive Rules of the Public Utility Commission of Texas "Customer Protection Rules for Retail Electric Service, Sections 25.471 - 25.485, and 25.491 - 25.492. The Parties expressly acknowledge that certain terms, conditions, and protections addressed in such sections 25.472 - 25.485, and 25.491 - 25.492 may not be provided for or referred to in this Agreement, and, in such event, it is the intent of the Parties that such terms, conditions, and protections are not applicable to the Parties. Neither Party may assert any claim that any term, condition, and/or protection contained in Sections 25.472 - 25.485 and 25.491 - 25.492 of the Rules is inconsistent with any term, condition, and/or protection contained in the Agreement and, therefore, applies to the Parties. This Agreement may not be modified or amended except in writing, duly executed by the Parties hereto. Buyer warrants that the information supplied by it pursuant to this Agreement is true and shall remain so throughout the term of the Agreement unless varied by agreement. 14.5 Waiver of Rights. A waiver by either Party of any breach of this Agreement, or the failure of either Party to enforce any of the terms and provisions of this Agreement, will not in any way affect, limit or waive that Party's nght to enforce and compel strict compliance with the same or other terms or provisions of this Agreement. 14.6 Third Party Rights. Nothing in this Agreement shall create, or be construed as creating, any express or implied rights in any person or entity other than the Parties. 14.7 Survival. No termination or cancellation of this Agreement will relieve either Party of any obligations under this Agreement that by their nature survive such termination or cancellation, including, but not limited to, all warranties and obligations of indemnity. 14.8 Further Assurances. Buyer and Seller agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, in order to give full effect to this Agreement and to carry out the intent of this Agreement. 14.9 Distribution System. Distribution System herein shall mean any system for the distribution of electricity through which the electricity to be provided by Seller to Buyer is provided or passed to the Premise(s). Seller's obligations under this Agreement are subject to the maximum capacity and any other design feature of Buyer's Premise or Connection. Buyer shall contact Seller in accordance with all applicable legal requirements, and otherwise reasonably in advance, if Buyer proposes to make any significant change to Buyer's connection, electric Imes or electrical equipment, install or operate generating equipment or do anything else that could affect the Distribution System or require alterations to Buyer's Connection. Each of the Parties undertakes to comply with Buyer's TDSP's Tariff for Distribution Service, 14.10 Delivery of Electricity. Seller does not guarantee against irregularities or interruptions, it being understood that occasional irregularities and interruptions by the TDSP may occur. Buyer is responsible for installing and maintaining protective devices as recommended or required by the then current edition of the National Electric Code and other such devices as are necessary to protect equipment or process during irregular or interrupted service including, but not limited to voltage and wave form irregularities. 14.11 Confidentiality. Seller acknowledges that Buyer is a governmental body that is subject to public information laws, including Chapter 552 of the Texas Govemment Code, which requires Buyer to release any information that is defined as or deemed to be public (the "Public Information Statutes "). Subject to any Public Information Statute or related order, rule or regulation requiring disclosure, 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 agents, attorneys, auditors, accountants and shareholders as may be reasonably necessary. If disclosure is sought through process of a court, or a state or federal regulatory agency, the Party from whom the disclosure is sought shall resist disclosure through all reasonable means and shall immediately notify the other Party to allow it the opportunity to participate in such proceedings. 14.12 Resale of Seller's Electric Service. Buyer may not use supply of electricity provided by Seller except for the purpose specified in the Price Sheet under which Buyer receives supply of electricity. Buyer may not resell or otherwise dispose of supply of electricity unless as provided by statute or as specifically provided for in the Price Sheet. 14.13 Authorization. At such time as executed Offer and Price Sheet(s) are attached hereto, Buyer authorizes Seller to become Buyer's new retail electric provider in place of Buyer's current retail electric provider for the duration of the Agreement Term set forth in the Offer. Buyer authorizes Seller to act as Buyer's agent to effect the change, and Buyer directs its current retail electric provider to work with Seller to make this change happen. Buyer represents to Seller that Buyer is legally authorized to change the retail electric provider for all of the Premises. 14.14 Severability. If any portion of this Agreement, or application thereof to any person or circumstance, shall be held legally invalid, the remainder shall not be affected and shall be valid and enforced to the fullest extent permitted by law or equity. 14 15 Aggregator Fees. Seller shall bill and collect from Buyer for HGAC Energy Purchasing Corporation ( "HGAC ") Aggregation Fees with H -GAC Energy Purchasing Corporation Or \wdox\ Corr \gn1 \elec_ngg \hgac\00015042.DOC Page 6 of 11 respect to the purchase of Electricity under these Terms and Conditions ( "Aggregation Fees "). Seller shall remit all Aggregation Fee collections received during each calendar month to HGAC on or before the twentieth (20 Business Day of the following calendar month. Payments received from Buyer shall be deemed to be payments of Seller and TDSP charges then due, then of the Aggregation Fee. 14.16 Aggregator Review. Buyer understands and acknowledges that any deviations from the standard Terms and Conditions for Supply of Electricity negotiated by HGAC on behalf of Buyer shall be subject to the prior review and consent of the HGAC. 14.17 Buyer is a Member of the HGAC Energy Purchasing Corporation. Seller is basing the indicative price on the attached price sheet upon assumptions as to the aggregated load and associated load factor of all Members of the Corporation. A condition precedent to the effectiveness of this Agreement is satisfaction of certain load and load factor critena as agreed to between Seller and the HGAC Energy Purchasing Corporation. In the event that such criteria, as established in Section 1.6 of the Agreement between H -GAC Energy Purchasing Corporation and TXU Energy Services, are not satisfied, then Seller shall not sign this Agreement and it shall be null and void ab initio. 14.18 Buyer shall notify seller of any ESIs that have any significant load shifting capabilities so Seller may offer multipart pncing for that Premise. The Parties have signed this Terms and Conditions for Supply of Electricity document, acknowledging their agreement to its provisions as of 200_. By: By: Name: Name: Title: Title: Date: Date: "Buyer" "Seller" H -GAC Energy Purchasing Corporation O:\ wdox\ corr \gnnelec_agg\hgac \00015042.DOC TXU ENERGY SERVICES COMPANY Page 7 of 11 Exhibit A List of Member Buyers' Accounts H -GAC Energy Purchasing Corporation Page 8 of 11 O: \n do:\ corr \gnl \elec_agg \hgac\00015042.DOC Charge Amount Monthly Standing Charge $ 10 per service point All kWh $0. per kWh TDSP Delivery Charges $0. per kWh for delivery, excluding reactive power, based upon current estimate *; Monthly price will be based upon actual charges. Tariffs, rates, nders, fees, and charges other than those included in TDSP delivery charges above To be determined, varies by service point All applicable taxes To be determined, varies by jurisdiction Over Capacity Charge $ -0- per kW Terms and Conditions for Supply of Electricity # Exhibit 13 Pricing Sheet TXU Energy Services Price Sheet This Price Sheet is only valid in association with and shall remain subject to the Terms and Conditions for Supply of Electncity ("Terms") and Offer for Supply of Electricity referenced above and is contingent upon Customer's acceptance of the Offer pnor to the Offer Expiration Date. This Price Sheet is applicable to the Customer ESI number(s) identified on Exhibit A of the Terms. Monthly Prices shall equal the sum of (i) the Monthly Standing Charge set forth below; plus (ii) the applicable per kWh charges set forth below for the electricity; plus (iii) all costs and expenses of any nature whatsoever that are charged by the Transmission and Distribution Service Provider (` TDSP ") for the transmission and/or distribution of the electricity, as well as any other charges of the TDSP that are attributable to the Customer Account numbers, including, without limitation, charges for reactive power; plus (iv) all other tariffs, rates, riders, fees, and charges, charged by the TDSP or another party, that are mandated, levied, assessed, allowed, or approved by the Texas Public Utility Commission and all other governmental or regulatory authorities, on or with respect to the acquisition, sale, delivery, and purchase of the electricity; plus (v) all federal, state, and local taxes, of any nature whatsoever, imposed by all governmental and regulatory authorities, on or with respect to the acquisition, sale, delivery, and purchase of the electricity, including Seller's Texas Gross Receipts Tax on the sale of electricity to Buyer; plus (vi) the Over Capacity Charge set forth below, if applicable; plus (vii) an aggregation fee of $0.00045 per kWh actually consumed by Buyer collected by Seller on behalf of and paid to HGAC Energy Purchasing Corporation. Buyer shall notify seller of any ESIs that have any significant load shifting capabilities so Seller may offer multipart pricing for that Premise. The costs and expenses charged by the TDSP for delivery services may fluctuate during the Agreement Term, as will other applicable taxes, tariffs, riders, fees, and charges. * For reference purposes only. This is the current estimate of the average TDSP standard delivery costs, excluding charges for reactive power, special metering, or other miscellaneous TDSP charges. H -GAC Energy Purchasing Corporation O:\ wdox\ corr \gnl \elec_agg \hgac \00015042.DOC Page 9 of 11 BUYER: Phone: Fax: SELLER: TXU Energy Services Company 1601 Bryan Street, 7 Floor Dallas, Texas 75201 Phone: (214) 875 -1000 Fax: (214) 875-1001 1. CONTRACT TERM The Primary commence respective Premise practicable, of the respective Term for each Premise, identified in Exhibit A, shall upon the date of the first reading of the meter(s) on each by the TDSP after , or as soon thereafter as and shall end for each Premise upon the date of the first reading Premise meter(s) by the TDSP after . IL PAYMENT TERMS Net 30 days. IIL DEPOSIT AMOUNT No initial deposit required. IV. BILL PRESENTMENT METHOD V. PAYMENT METHOD VI. STANDARD SERVICES Toll free number (800)725 -7920 for 24 hour emergency outage and customer service, available 7 a.m. to 7 p.m. on normal business days; Assigned customer service representative, billing analyst, and assigned professional account manager. VII. CUSTOM SERVICES Not Applicable VIIL SPECIAL PROVISIONS Not Applicable IX. AVERAGE COST PER XIVH* $ per kWh X. TERMS AND CONDITIONS THIS OFFER FOR THE SUPPLY OF ELECTRICITY INCLUDES THE TERMS AND CONDITIONS FOR THE SUPPLY OF ELECTRICITY, WHICH SHALL BE SEPARATELY EXECUTED BY BUYER AND SELLER AND WILL BE PART OF THIS CONTRACT. BY SIGNING BELOW, BOTH PARTIES HEREBY ACKNOWLEDGE ACCEPTANCE OF THIS OFFER FOT THE SUPPLY OF ELECTRICITY. Buyer Signature: Seller Signature: Name (Please print): Name (Please print): Kevin Bohn Position: Position: Vice President Date: Date: Contract/Plan #: Estimated. Actual cost will vary with actual delivery charges from your transmission and distribution provider and actual consumption patterns. This cost does not include applicable taxes. H -GAC Energy Purchasing Corporation O:\wdor \corr \gal \elec_agg\hgac \00015042.DOC Exhibit C OFFER FOR THE SUPPLY OF ELECTRICITY Page 10 of 11 [Date] TXU Energy Services Company 1601 Bryan Street Dallas, Texas 75201 Very truly yours, [Member Buyer Representative Signature] [Title of Member Buyer's Representative] H -GAC Energy Purchasing Corporation O: \wdoa \co rr\gnl\elec_agg\hgac100015042.D OC Exhibit D FORM LETTER - AUTHORIZATION FOR RELEASE OF ELECTRIC UTILITY DATA TO BE SIGNED BY MEMBER BUYER ON ITS LETTER HEAD Re: Account Data for Accounts listed in Attachment [Attach relevant portion of Exhibit A for description of Accounts] This letter is to serve as authorization to release to , or H -GAC Energy Purchasing Corporation all information relative to our account(s) listed in the attachment, including but not limited to service, load history, load profiles, rates, payment history, billing data and billing determinants. This request for release is valid for one (2) years from the date of this letter with respect to and five (5) years from the date of this letter with respect to H -GAC. Page II all H -GAC Pricing: Fixed Energy Charges Per kWH Fixed kWh for all Usage Term 12 Month 24 Month TXU Indicative Energy Price $0.0415706 $0.0415950 Transmission & Distribution Charges * $0.0094038 $0.0094038 Aggregation Fee $0.0004500 $0.0004500 Total $0.0514244 $0.0514488 INDICATIVE PRICING ' EXHIBIT 1 II II Below is a table that shows the prices and terms available through TXU Energy Services. One and two year contract terms will be offered. These are only indicative prices. In addition, there is a $10.00 monthly standing fee per account. The final pricing will be released on November 13, 2001, at 1:00 p.m. This information will be released to the contact representative named by your local government on Resolution II. For high demand accounts (or those with 1DR meters), specialized time -of -day pricing is be available. O: \wdox\CORR 1gnl\elec_agg\hgac \OOOI5068 DOC DATE: November 2, 2001 SUBJECT: Special Called City Council Meeting — November 5, 2001 ITEM: 3.A.2. Consider a resolution authorizing the Mayor to execute an electricity supply agreement with TXUEnergy Services. Resource: Bob Bennett, City Manager David Kautz, Finance D History: The H -GAC Energy Purchasing Corporation has negotiated favorable terms and pricing for the purchase of electricity on behalf of its members. Approval of this resolution approves an electric power Supply Agreement and initial proposal pricing. The resolution also commits the City to purchasing electricity through TXU Energy Services if the final pricing made available on November 13 is less than or equal to the initial proposal pricing. (Indicative Pricing). Funding: Funding is provided by the operating budget Cost: Source of Funds: General Fund Water / Wastewater Utility Fund Outside Resources: N/A Impact/Benefit: Public Comment: N/A Sponsor: N/A Varies according to electric power usage; Annual cost is estimated at $1.3 million (for accounts served by TXU Electric, excluding street lighting) Aggregating the City's electric power requirements is expected to produce annual cost savings ranging from $150,000 to $400,000 depending upon final market pricing.