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HomeMy WebLinkAbout028603 RES - 05/11/2010Page 1 of 3 RESOLUTION AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND EXECUTE A BLENDED WATER SUPPLY AGREEMENT WITH LAS BRISAS ENERGY CENTER, LLC WHEREAS, Las Brisas Energy Center, LLC ("Las Brisas") has applied for the necessary permits to construct a petroleum coke -fueled power generation facility ("facility") on property owned by the Port of Corpus Christi along the northern shoreline of the Inner Harbor in Nueces County, Texas; WHEREAS, The facility will consist of two approximately 600 MW steam turbines fed by four boilers (each turbine and its two associated boilers are referred to as a "Unit"), for a net output of approximately 1200 MW; WHEREAS, Las Brisas needs a firm, long-term supply of between 15,344 and 21,000 acre-feet of water per year for the operation of both units; WHEREAS, the facility will be located within the City's Industrial District No. 1; WHEREAS, the facility will be located within the boundaries of the City's Certificate of Convenience and Necessity for potable water service; WHEREAS, Las Brisas has requested that in lieu of providing potable water, the City supply it with a new type of water "Blended Water," which is a blend of the City's various raw waters, and which has been partially treated to settle out some of the sediments; WHEREAS, the City's currently available water supplies are adequate to meet the needs of Las Brisas; WHEREAS, Las Brisas will pay for the construction of the pumping station and distribution pipeline need to transport the water from the City's O. N. Stevens Water Treatment Plant to its facility; WHEREAS, in order to encourage the economic development along the Joe Fulton Corridor and north side of the inner harbor, the distribution pipeline will be oversized to provide future blended water service to future customers; and WHEREAS, it is in the best interest of the City to encourage the development of additional power generation for the region; and WHEREAS, it is in the best interest of the City to encourage substantial capital investment and the creation of high wage jobs within its industrial districts; 028603 Las Brisas IDA - Blended Water Resolution 05062010.DOC INDEXED Page 2of3 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. Once Las Brisas has received the necessary permits from the Texas Commission on Environmental Quality, the City Manager is authorized to negotiate and execute a blended water supply agreement based generally upon the principles set out in Exhibit A and the published blended water rates based upon the principles set out in Exhibit B, which are attached to and incorporated into this resolution. ATTEST: Armando Chapa City Secretary APPROVED: //lay of May, 2010. R.Jing First Assistant C Attorney For City Attor - ey Las Brisas IDA - Blended Water Resolution 05062010.DOC THE CITY OF CORPUS CHRISTI Joe Ad974,°--a4P-0#2 Mayor Page 3of3 Corpus Christi, Texas 11th day of May, 2010 The above resolution was passed by the following vote: Joe Adame U Chris N. Adler /4111 Brent Chesney Larry R. Elizondo, Sr. Kevin Kieschnick Priscilla Leal 14C11 -Co to( -- John E. Marez Nelda Martinez Mark Scott Alf Las Brisas IDA - Blended Water Resolution 05062010.DOC EXHIBIT A Blended Water Supply Agreement 1. The City will not waive sovereign immunity. 2. Blended water supply agreement will recognize existing water resources, natural variations in supply, and existing contracts. 3. City will supply up to 21,000 acre feet of blended water per year. 4. No City liability if City cannot provide water, Las Brisas will have right to terminate contract. 5. Sale of blended water will be a published water rates. Council retains current discretion to set rates and factors considered in rates. 6. Las Brisas will be responsible for constructing distribution pipeline and pumping facility. 7 City is not guaranteeing quality of blended water. Water quality is subject to variation based upon source, contamination of source water, chemicals that may be used in sedimentation processes, and chemical residues in wash/backwash waters. 8. Require "Equity Buy -In" fee. 9. Impose capacity restoration surcharge and open agreement to renegotiation if Las Brisas takes more water than specified in agreement. 10. Normal City billing, metering, and interest charges will apply. 11. City will own and operate pump station and pipeline. City will be responsible for maintenance and repairs. 12. No obligation to provide service beyond maximum amount of blended water specified for peak days in agreement. 13. Require Las Brisas to provide 5 -year water demand forecast. 14. Contract term limited to 30 years. 15. Subject to normal water conservation and drought contingency measures. 16. Other provisions the staff deems necessary to protect the City. EXHIBIT B Blended Water Rate Principles 1. New published rate class — blended water. 2. Will have minimum monthly service charge with minimum volume. 3. Subject to Raw Water Cost Adjustment ("RWCA.") 4. RWCA will be adjusted to add new reserve for future water supplies. 5. Blended water volume charge will reflect diversion cost and operating and maintenance costs of blended water pump station and distribution charge. 6. Diversion costs will consider pumping costs from Nueces River to ONSWTP and costs of pre -sedimentation basis and wash -water recycle basin. Costs will be proportioned with treated water customers. 7 Consider peaking charge. 8. Rate will be "fair," "equitable," "non-discriminatory," and comply with generally accepted water rate principles. 9. Existing water customers will not pay for oversizing blended water distribution pipeline. 10. Impose "equity buy -in" fees for all new "large" customers. Currently customers who use 10,000,000 gallons per month are considered Targe customers. 11. Impose new capacity restoration subcharges for any customers taking more water than specified in contracts.