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HomeMy WebLinkAboutRES 01.12.1976 - Power Agmt41 RESOLUTION WHEREAS, the City Council of the City of Georgetown has carefully considered two letters dated November 21, 1975 from Charles Herring, General Manager of Lower Colorado River Authority, the first with reference to the under -recovery of fuel costs through operation of the Fuel and Purchased Power Clause of Rate Schedule WP -1 as included in the Whole- sale Power Agreement dated as of June 25, 1974, a copy of which letter is attached hereto as Exhibit A, and the second with reference to the individual recalculation of this City's share thereof, a copy of which letter is attached as Exhibit B, and WHEREAS, said letters contemplate the institution of a temporary surcharge as an addition to Exhibit C-1 of said contract, and WHEREAS, said letters also contemplate a change in the procedure for determining the estimated current cost of all fuel used by the Authority in its.generating plants for immediate application to each wholesale customer's invoice for the month for which the fuel cost was incurred with a final adjustment when the final cost is known, and WHEREAS, the Advisory Committee of the wholesale customers of Lower Colorado River Authority has also carefully considered the above mentioned matters and has expressed approval thereof by unanimous action of the Committee subject to certain action by the authority, no therefore BE IT RESOLVED by this Council that Exhibit C-1 of the Wholesale Power Agreement dated as of June 25, 1974 be amended to include the following: 3. For all energy delivered on and after November 25, 1975, until the total amount .— assessed under this provision is equal to $41,199.42(as shown in Exhibit B). CO 1.7 Mi I Is per Kwh tY: Gi If the foregoing assessment does not equal the total assessed amount by June 25, 1976, the balance remaining shall be due and payable in a lump sum on June 25, 1976. BE IT FURTHER RESOLVED that this Council endorse and approve the change in the time of the determination of the final fuel cost adjustment as set forth in Exhibit A. BE IT FURTHER RESOLVED that said amendment, endorsement and approval be subject to the following conditions which are precedent to this resolution: 1. That the effectiveness of said amendment, endorsement and approval is contingent upon adoption of a like resolution by a majority of all other wholesale power customers of the Authority, both cities and cooperatives, and further that the Lower Colorado River Authority Board will take such action as necessary to collect any like due amounts from any and all of the remaining wholesale customers who, for one reason or another, refuse to furnish the Authority with a like resolution. 2. That the provisions of Wholesale Power Rate Schedule WP -1 appearing as the first paragraph on page 5 of 5 of Exhibit C will apply to any and all costs billed to and paid by this City as a result of the modification of Exhibit C-1 and the modification in the method of determining the current cost of fuel. This provision reads as follows: "Any costs which are billed to and paid by Authority's customers under this Fuel and Purchased Power Clause and which are subsequently recovered by the Auth- ority from others will be credited to the Authority's customers on a pro -rata basis." 3. That the Authority agree to allow a suitable discount to those wholesale customers who choose to prepay the assessment provided for by paragraph 3 of Exhibit C-1. Such applicable discounts to be at a uniform rate and to be separately negotiated with any of said wholesale customers so desiring to make prepayments of all or portion of the individual wholesale customer's total assessment. 4. That the Authority agrees to undergo a management analysis and operational review to be conducted by an independent consultant. The analysis and review shall commence on or before February 1, 1976, or such later date as may be agreed upon by the Authority and the Advisory Committee of wholesale power customers of the Authority (the "Advisory Committee"). The cost of the analysis and review is to be borne by the Authority. A copy of the consultant's report shall be delivered to the Advisory Committee and to each Distri- butor requesting a copy. The Authority shall report to the Advisory Committee in writing what action the Authority plans to take in response to any recommendations made in the consultant's report. The Advisory Committee shall participate in and have equal voice with the Authority in the selection of an independent consultant to conduct the review and analysis. In the event of failure to agree on a consultant, the Authority shall select a 42 consultant from a list of three established management consulting firms selected by the Advisory Committee. The Advisory Committee shall participate and have equal voice in defining the scope, extent, and nature of the review and analysis to be conducted. 5. That the Authority agree to obtain and deliver to each wholesale power customer a special report to be prepared by its financial consultant, First Southwest Company, eval- uating the effect and present status of the financial plan adopted concurrently with the execution of the Wholesale Power Agreements. Said report is to be completed and delivered on or before July 1, 1976. 6. That the Authority agree to deliver on or before February 1, 1976, to each wholesale power customer a copy of the Indenture Report dated September 1, 1975 as prepared by Commonwealth Associates, Inc., which contains details concerning the phy- sical inspection and condition of the Authority's properties, the results and costs of operation and maintenance for the three years ended June 30, 1975, and a forecast of estimated results and costs of operation and maintenance for the three year ended June 30, 1978. 7. That the Authority agree to obtain and deliver on or before February 1, 1976, to each wholesale power customer, a special report to be prepared by the independent accounting firm of Arthur Young & Co., wherein the Authority's compliance with its various trust indentures and bond resolution and the terms of the act under which it was created, including all amendments thereto, are discussed on the basis of all information said firm of accountants has obtained or confirmed independently of the records of the Authority through and in connection with its fiscal year ended June 30, 1975. 8. That the Authority agree to fully cooperate in and provide any and all additional information required for an independently conducted fiscal review and analysis of the Authority. This fiscal review and analysis of the Authority is to be conducted by an independent consultant to be employed by the wholesale power customers. Its purpose is to review and analyse the information provided by the Authority under paragraphs 5, 6 $ 7 above, to update such information to December 31, 1975, to inquire into the basis and source of such information, and to develop such additional information deemed necessary by the consultant to evaluate the performance of the Authority with a view to the interests of the wholesale power customers of the Authority. The Advisory Committee is hereby authorized to employ an independent consultant to conduct the review and analysis. Upon completion of the independent review and analysis, the Authority Shall cause its staff to meet with members of the Advisory Committee to discuss any and all matters covered by the consultant's report. The consultant shall report to and be paid by the wholesale power customers. 9. Acceptance by the Authority of payment calculated in accordance with this resolution shall constitute acceptance by the Authority of all terms and conditions hereof. CERTIFICATE I, the undersigned, the duly elected, qualified and acting Mayor of the City of Georgetown do hereby certify that I have compared the above copy of resolution with the original of such resolution on file in my office and that the same is a true and correct copy of such resolution which was regularly adopted at a meeting of the City Council, duly held on the 12th day of January, 1976, and said resolution is in full force and effect. Dated this 12 th day of January 1976. ATTEST: City Secretary D. W. Scott, Mayor