HomeMy WebLinkAboutC2013-361 - 12/17/2013 - Approved AEP Texas
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November 5,2013
Mr. Dan Biles,P.E.
Director of Engineering Services
City of Corpus Christi
1201 Leopard Street
Corpus Christi,TX 78469
Re: Request to elevate AEP Texas Central Company's 69 KV Markham to Bay City Pump Tap
Transmission Line that crosses the Mary Rhodes Pipeline Phase 2 site located in
Matagorda County
Dear Mr. Biles:
This letter(the "Agreement") sets forth an agreement between the City of Corpus Christi
("Customer") and AEP Texas Central Company ("Texas Central") under the terms of which
Texas Central will proceed with the engineering, design, procurement and construction work
described in Section 2 of Exhibit A to this Agreement (the "Work"). The Customer has
requested that Texas Central elevate the Texas Central 69 KV Markham to Bay City Pump Tap
Transmission Line ("Transmission Line") in connection with the Customers Mary Rhodes
Pipeline Phase 2 River and Booster Pump Stations Project No. E10008 ("MRPP2 Project")
located near Bay City in Matagorda County, Texas. Customer has requested Texas Central to
provide this service pursuant to Texas Central's Tariff for Electric Delivery Service (the
"Tariff").1 This Agreement shall only become effective upon Customer's delivery of the properly
executed Agreement and required CIAC Payment to Texas Central (the "Effective Date") on or
before December 31,2013.
1. CIAC Payment. Customer agrees to compensate Texas Central as a contribution in aid
of construction for all costs that Texas Central actually incurs in its performance of the
Work, determined in accordance with Texas Central's standard accounting practices (the
"CIAC Payment"). Texas Central has indicated that the estimated cost2 of performing the
I All capitalized terms used in this Agreement, including the attached Exhibit A,but not defined have the meanings
given to them in the Tariff,unless the context in which such terms are used clearly indicates otherwise.
2 As used in this Agreement, the term "cost" means all of Texas Central's expenses in performing the Work
including,but not limited to, actual attorney's fees associated with providing the service under this Agreement and
all of Texas Central's fully embedded costs for labor,materials, and equipment(including all applicable overheads
and taxes associated with Customer's CIAC)as determined in accordance with Texas Central's standard accounting
practices and Tariff. CIACs are taxable and "cost" shall include an Income Tax Component of Contribution
("ITCC") at the current applicable rates, which are revised and published by AEP annually and are available upon
request.
2013-361
12/17/13
M2013-195
AEP Texas Central Company INDEXED
Mary Rhodes Pipeline Phase 2
Page 2 of 5
Work, as outlined in Exhibit A, is One Million Four Hundred Fifty Thousand Dollars
($1,450,000) which Customer acknowledges is reasonable. The CIAC Payment to be
initially made by Customer to Texas Central on the Effective Date of this Agreement is
One Million Four Hundred Fifty Thousand Dollars ($1,450,000) based on the estimated
cost of performing the Work as shown in the attached Exhibit A. Exhibit A reflects only
an estimate of the scope of the Work and the cost of performing the Work (including the
estimated ITCC amount). Customer understands that the actual scope and cost of
performing the Work may deviate from that shown in Exhibit A. Customer will retain the
right to approve in writing any deviation in the scope or cost of performing the Work
shown in Exhibit A if such deviation would result in a cost increase of twenty percent
(20%) or more, which approval will not be unreasonably withheld or delayed. In the
event that Customer withholds or delays its written approval for more than fifteen (15)
days after its receipt of written notification, Texas Central may suspend performance of
the Work pending receipt of such approval, and in the event such written approval is
withheld or delayed for more than thirty (30) days, Texas Central may cancel this
Agreement and recover from Customer all actual costs that Texas Central has incurred
(including costs that it has committed to expend and that cannot be cancelled ) through
the date of cancellation. Upon completion of the Work, Texas Central shall determine
the actual cost incurred in performing the Work. In the event the actual cost of the Work
is greater than the CIAC Payment initially made by Customer to Texas Central, Texas
Central will invoice Customer for the amount of the deficiency, and Customer will pay
such amount within thirty (30) days of receipt of that invoice. In the event the actual cost
of the Work,net of the customer allowance, is less than the CIAC Payment initially made
by Customer to Texas Central, Texas Central will refund to Customer the amount of the
excess within thirty(30) days of its determination of the actual cost of the Work.
2. Cancellation Costs. If Customer cancels this Agreement prior to completion of the Work
or if Texas Central cancels this Agreement in accordance with either of the following two
paragraphs, Customer shall pay Texas Central for all of Texas Central's actual costs
related to the Work (including the costs associated with commitments for purchases not
yet delivered and/or re-stocking fees or order cancellation fees, and the cost associated
with the removal of facilities already installed but rendered idled as a result of the
cancellation of the Agreement) through the date this Agreement is canceled
("Cancellation Costs"). Texas Central shall make use of the CIAC Payment to pay that
obligation and bill Customer for any deficiency, or pay Customer for any excess.
3. Target Completion Date. Texas Central shall use commercially reasonable efforts to
complete the Work on or before March 1, 2014 (Temporary Solution) and November 30,
2014 (Permanent Solution) ("Target Completion Date"). However, Texas Central does
not promise to complete the Work by the Target Completion Date; and in no event shall
Texas Central have any liability to Customer or any third party in the event that Texas
Central is unable to complete the Work by the Target Completion Date. If Customer
requests Texas Central to delay performance of the Work, and Texas Central agrees to
such a delay, the Target Completion Date shall be extended to account for the effects of
the requested delay. Customer will also pay Texas Central an additional CIAC Payment
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Mary Rhodes Pipeline Phase 2
Page 3 of 5
for any increase in estimated cost of performing the Work resulting from such delay,
including demobilization and remobilization costs and suspension, termination or
cancellation costs payable to third parties. If, after initiation of a requested delay,
Customer does not authorize Texas Central to recommence the Work on or before May 1,
2015,then Texas Central may, at its option,cancel this Agreement. Customer recognizes
that events beyond the reasonable control of Texas Central may make it necessary to
extend the Target Completion Date. If Texas Central reasonably determines that it will
not be able to complete the Work by the Target Completion Date, Texas Central will
notify Customer, and the Target Completion Date will be adjusted to reflect the earliest
date that Texas Central reasonably determines that it can complete the Work.
4. Easements. Customer agrees to assist Texas Central in obtaining, at no cost to Texas
Central, easements and rights-of-way (the "Easements") to the extent required for Texas
Central's performance of the Work, on terms reasonably acceptable to Texas Central. All
costs incurred by either Customer or Texas Central related to obtaining the Easements
(including the actual ITCC amount resulting from Customer's reimbursement of Texas
Central for these costs) shall be borne by Customer and paid as part of the CIAC
Payment. Texas Central and Customer recognize that an estimate of the cost of acquiring
the Easements (including the estimated ITCC amount)has been included in the estimated
cost of performing the Work. Texas Central agrees to commence commercially
reasonable efforts to acquire the Easements upon the Effective Date. However, if the
Easements have not been acquired within sixty (60) days after the Effective Date on
terms reasonably acceptable to Texas Central, Texas Central may suspend performance
of the Work until the Easements have been acquired. If after the expiration of the sixty-
day period, Texas Central reasonably determines that it cannot obtain the Easements on
reasonably acceptable terms, notwithstanding its commercially reasonable efforts to do
so, and that such inability to obtain the Easements will prevent Texas Central from timely
performing the Work,then Texas Central may,at its option,cancel this Agreement.
5. Cooperation. Customer agrees to meet with Texas Central and to provide Texas Central
with information that is reasonably necessary to perform the Work.
6. Ownership/Use of Work. All of the facilities installed by Texas Central in performing
the Work shall be owned, maintained and controlled solely by Texas Central. Customer
understands that it receives no ownership or control of those facilities by virtue of the
payment of the CIAC. Texas Central expressly retains the right to use those facilities for
any purpose that Texas Central deems appropriate under good utility practices, including
the distribution of electric service to other customers.
7. Performance Standards/Disclaimer of Warranties. Texas Central will perform the
Work in accordance with applicable laws, rules and regulations, including ERCOT
requirements and Public Utility Commission of Texas ("PUCT") rules and orders, and
subject to required regulatory consents and approvals. Except for the foregoing, TEXAS
CENTRAL HEREBY DISCLAIMS ALL EXPRESS OR IMPLIED
WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY,
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Mary Rhodes Pipeline Phase 2
Page 4 of 5
FITNESS FOR A PARTICULAR PURPOSE, OR GOOD AND WORKMANLIKE
PERFORMANCE.
8. Limitation of Liability. TEXAS CENTRAL (AND ITS OFFICERS, EMPLOYEES
AND CONTRACTORS) SHALL NOT BE LIABLE FOR ANY ECONOMIC OR
COMMERCIAL LOSSES OR OTHER SPECIAL, INDIRECT, INCIDENTAL,
CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING
LOSS OF PROFIT OR REVENUE, LOSS OF USE OF EQUIPMENT, COST OF
CAPITAL, OR DAMAGE TO REPUTATION OR RELATIONS) RESULTING
FROM TILE PERFORMANCE OR FAILURE TO PERFORM THE WORK
DESCRIBED HEREIN, WHETHER BASED IN CONTRACT, TORT, STRICT
LIABILITY, STATUTORY LIABILITY OR ANY OTHER THEORY OF
LIABILITY.
9. Nature of Work. In performing the Work, Texas Central is making modifications and
additions solely to its own electric system, in accordance with the Tariff, in response to
Customer's request for electric Delivery Service.Texas Central is not performing any work
on any facilities or equipment owned, or to be owned, by Customer. No provision
contained in this Agreement and no action on the part of any of the parties hereto shall be
construed as creating an employer/employee relationship, joint venture or any other
relationship other than that of regulated electric utility and Delivery Service customer.
Nothing contained herein shall be construed as a waiver or relinquishment by Texas Central
of any right it has or may hereafter have to discontinue Delivery Service for default in the
payment of any bill owing or to become owing hereunder or for any reason or cause allowed
by law.
10. Amendments/Modifications. No amendment or modification of this Agreement shall be
valid and binding unless made in writing and signed by the respective authorized
representatives of Texas Central and Customer.
11. Entire Agreement. This Agreement,together with all applicable provisions of the Tariff,
constitutes the entire understanding and commitment of the parties hereto and shall
supersede all prior offers, negotiations and agreements relative to the subject matter
hereof.
If the foregoing meets with your approval,please have the appropriate authorized officer
or agent of your company sign the attached two (2) copies of this letter and return them both to
me. I will have one copy with original signatures returned once this Agreement has been fully
executed by Texas Central.
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Mary Rhodes Pipeline Phase 2
Page 5 of 5
We are looking forward to working with you on this project.
Very truly yours,
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Customer Services Manager
cc: David Hawk-AEP
Agreed and accepted: Agreed and accepted:
City of Corpus Christi AEP Texas Central Company
By: Gam _ - By: / /7/-/
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Name: �.raa.; r�C Name: 4, .W WI ew
Title: A5�57.0._j tcr.7�./, serwee5- Title: YLl 55 ✓. "2-/c 5
Date: ,zA 7/�,3 Date: /ZT/?/Zd/
ATTEST.
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Doc 817121
Exhibit A to City of Corpus Christi/Texas Central Letter Agreement
Dated November 5, 2013
I. Assumptions for elevating a portion of the Transmission Line near Bay City in
Matagora County:
• Texas Central does not expect the Work to require the issuance of a Certificate of
Convenience and Necessity (CCN) by the Public Utility Commission of Texas. The Cost
estimates and Target Completion Date estimates are based on this expectation. If a CCN
is determined to be necessary, the Cost estimates and the estimated Target Completion
Date will require adjustment. Customer will be responsible for reimbursing Texas Central
for all its costs in obtaining such a CCN.
2. Scope and Estimated Cost of Work:
Scope of Work Customer's Share of
Estimated Cost of Work
• Permanent Solution: Texas Central will install two $989,090.16
deadend structures and two tangent structures to
increase the height of the Transmission Line
between structures 2/8 and 3/1
• Temporary Solution: Install two direct embed $364,440
tangent structures to increase line height to allow
City of Corpus Christi to start construction
• Federal Income Tax Component of Contribution $132,069.84
(ITCC)
• Texas Central will remove 4 H-Frame Structures $14,400
• Preliminary Engineering Agreement ($50,000)
Total Estimated Cost of Work to be Paid by Customer $1,450,000
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•
lila SUPPLIER NUMBER
TO BE ASSIGNED►Il'CITY
PURCHASING DIVISION
City of CITY OF CORPUS CHRISTI
Corpus DISCLOSURE OF INTEREST
Christi
City of Corpus Christi Ordinance 17112, as amended, requires all persons or firms seeking to do business
with the City to provide the following information. Every question must be answered. If the question is
not applicable, answer with "NA". See reverse side for Filing Requirements. Certifications and
definitions.
COMPANY NAME: AEP Texas Central Company
P.O. BOX: 2121
STREET ADDRESS: CITY: Corpus Christi ZIP: 78403
FIRM IS: I. Corporation } '_ Partnership 3. Sole Owner ❑
4. Association LJ 5 Other
DISCLOSURE QUESTIONS
If additional space is necessary, please use the reverse side of this page or attach separate sheet.
I. State the names of each "employee" of the City of Corpus Christi having an "ownership interest"
constituting 3%or more of the ownership in the above named"firm."
Name Job Title and City Department (if known)
NA
2. State the names of each "official" of the City of Corpus Christi having an "ownership interest"
constituting 3%or more of the ownership in the above named"firm."
Name Title
N/A
3. State the names of each"board member" of the City of Corpus Christi having an "ownership interest"
constituting 3%or more of the ownership in the above named"firm."
Name Board,Commission or Committee
N/A
4. State the names of each employee or officer of a "consultant" for the City of Corpus Christi who
worked on any matter related to the subject of this contract and has an "ownership interest"
constituting 3%or more of the ownership in the above named"firm."
Name Consultant
N/A
•
FILING REQUIREMENTS
If a person who requests official action on a matter knows that the requested action will confer an
economic benefit on any City official or employee that is distinguishable from the effect that the action
will have on members of the public in general or a substantial segment thereof.you shall disclose that fact
in a signed writing to the City official, employee or body that has been requested to act in the matter,
unless the interest of the City official or employee in the matter is apparent. The disclosure shall also be
made in a signed writing filed with the City Secretary. [Ethics Ordinance Section 2-349(d)]
CERTIFICATION
I certify that all information provided is true and correct as of the date of this statement, that I have not
knowingly withheld disclosure of any information requested: and that supplemental statements will be
promptly submitted to the City of Corpus Christi,Texas as changes occur.
Certifying Person: David A. hawk 'Title: Manager Rates
IT)peor Prim►
Signature of Certifying / L Date: h,//qq ZL)/
Person: ` ! (
DEFINITIONS
a. "Board member." A member of any board, commission, or committee appointed by the City
Council of the City of Corpus Christi.Texas.
b. "Economic benefit". An action that is likely to affect an economic interest if it is likely to have an
effect on that interest that is distinguishable from its effect on members of the public in general or a
substantial segment thereof.
c. "Employee." Any person employed by the City of Corpus Christi, Texas either on a full or part-
time basis,but not as an independent contractor.
d. "Firm." Any entity operated lirr economic gain, whether professional. industrial or commercial, and
whether established to produce or deal with a product or service, including but not limited to, entities
operated in the form of sole proprietorship, as self-employed person. partnership. corporation, joint
stock company. joint venture, receivership or trust, and entities which for purposes of taxation are
treated as non-profit organizations.
e. "Official." The Mayor, members of the City Council, City Manager, Deputy City Manager,
Assistant City Managers, Department and Division I leads,and Municipal Court Judges of the City of
Corpus Christi,Texas.
f. "Ownership Interest." Legal or equitable interest, whether actually or constructively held, in a
firm, including when such interest is held through an agent. trust, estate, or holding entity.
"Constructively held" refers to holdings or control established through voting trusts, proxies. or
special terms of venture or partnership agreements."
g. "Consultant."Any person or firm, such as engineers and architects, hired by the City of Corpus
Christi for the purpose of professional consultation and recommendation.