HomeMy WebLinkAboutC2021-170 - 6/29/2021 - Approved NATURAL GAS
SUPPLY CONTRACT
SCANNED
INDEX
Article Page
I. Definitions 1
II. Quantity & Price 2
III. Points of Delivery and Pressure 4
IV. Measurement 4
V. Measuring Equipment & Testing Provisions 6
VI. Quality 7
VII. Invoicing, Payment and Audit. 8
VIII. Term 9
IX. Force Majeure 10
X. Successors and Assigns 10
XI. Warranty of Title 11
XII. Indemnity and Limitation of Liability 11
XIII. Transfer of Title to and Possession of Gas 12
XIV. Regulatory Bodies 12
XV. Contract Administrator 13
XVI. Independent Contractor 13
XVII. Insurance 13
XVIII. Certificate of Interested Parties 14
XIX. Conflict of Interest 14
XX. Subcontractors 14
XXI. Fiscal Year 14
XXII. Waiver 15
XXIII. Acknowledgement 15
XXIV. Compliance with Laws 15
XXV. Venue 15
XXVI. Amendments 15
XXVII. Termination 15
XXVIII. Notice 17
GAS SUPPLY CONTRACT BETWEEN THE CITY OF CORPUS CHRISTI, TEXAS
AND NEXTERA ENERGY MARKETING, LLC
GAS SUPPLY CONTRACT NO.
THIS CONTRACT is entered into by and between NextEra Energy Marketing, LLC,
hereinafter referred to as "Seller," and the CITY OF CORPUS CHRISTI, TEXAS, a
municipality, hereinafter referred to as "Buyer."
ARTICLE I
DEFINITIONS
Except as otherwise specified, the following terms as used in this Contract shall be
construed to have the following scopes and meanings:
1 . Day means the period from nine o'clock (9:00) a.m. CST to the next
nine o'clock (9:00) a.m. CST.
2. Month means a period of one (1) calendar month commencing at
nine o'clock (9:00) a.m. local time on the first day of any calendar
month and ending at nine o'clock (9:00) a.m. local time on the first
day of the next succeeding calendar month.
3. Year means a period of three hundred sixty-five (365) consecutive
days provided, however, that any such period which contains the
date of February 29 shall consist of three hundred sixty-six (366)
consecutive days.
4. Psia means pounds per square inch, absolute.
5. Gas means natural gas that meets the quality standards contained
in this Contract, including those under Article VI, "Quality."
6. Cubic Foot of Gas means the volume of dry gas contained in one (1)
cubic foot of space at a standard pressure base of fourteen and
seventy-three hundredths (14.73) psia and a standard temperature
base of sixty (60) degrees Fahrenheit, hereinafter referred to as "F."
7. MCF means one thousand (1,000) cubic feet.
8. British Thermal Unit or BTU means one (1) the measurement unit of the
quantity of heat required to raise the temperature of one (1)
avoirdupois pound of pure water from fifty-nine and five-tenths (59.5)
degrees F to sixty and five-tenths (60.5) degrees F at a constant
pressure of fourteen and seventy-three hundredths (14.73) psia.
9. MMBTU means one million (1,000,000) BTUs.
10. Gross Heating Value means the number of BTUs produced by the
complete combustion at constant pressure of one cubic foot of gas
saturated with water vapor, at a constant pressure of fourteen and
seventy-three hundredths (14.73) psia and under standard
gravitational force (acceleration 32.175 feet per second per second)
with air of the same temperature and pressure as the gas, when the
products of combustion are cooled to the initial temperature of the
gas and air and when the water formed by such combustion is
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condensed to the liquid state. The Gross Heating Value of gas
delivered under this Contract shall be corrected from the conditions
of testing to those of the actual conditions, expressed in BTU per
cubic foot and reported at a pressure base of fourteen and seventy-
three hundredths (14.73) psia; however, if the gas as delivered
contains seven (7) pounds of water or less per one million (1,000,000)
cubic feet, such gas shall be deemed to be dry.
11. MAOP means the maximum allowable operating pressure of the
City's system as shown in Exhibit "A."
12. Mineral interest gas means that royalty share of gas owned by Buyer
from wells producing, or will in the future produce, on City of Corpus
Christi property or on non-City property of which Buyer has a legal
right to take in kind, and which Buyer, in its sole discretion, receives
directly into Buyer's distribution system.
13. Effective Date means the first day of August, 2021 .
14. Points of Delivery means the delivery points described on Exhibit "A."
ARTICLE II
QUANTITY & PRICE
1 . Subject to the terms and conditions of this Contract, commencing with the
effective date and continuing throughout the Term of this Contract, Seller
agrees to deliver and sell and Buyer agrees to accept and purchase one
hundred (100) percent of Buyer's total daily gas requirement for resale
within the operation of Buyer's distribution system (the "Total Daily Gas
Requirement"), a list of delivery points is attached and incorporated with
this Contract as Exhibit "A; provided, however, that as Buyer, the City retains
the right:
a. to acquire secondary supplies for delivery in the North Beach and
Padre Island systems; and
b. to accept "mineral interest gas" or royalty gas, from production
facilities producing natural gas on City properties from wells in which the
City owns a mineral interest or royalty.
2. The "Contract Price" for gas delivered into the Buyer's gas distribution
system for the Term shall be comprised of four components:
a. For all gas not priced at a Fixed Price, gas shall be priced on a daily
index price, which price shall be comprised of the daily Houston Ship
Channel/Daily Midpoint price as published in Platts Gas Daily Report
in the table titled "Daily Price Survey ($/MMBTU)," section "East
Texas," row "Houston Ship Channel" and column "Midpoint," and
referred to as the "Daily HSC Index," plus a fixed adder (the "Adder")
of $0.41 per MMBtu, inclusive of fuel and L&U, for each day of the
Term (the "Index Price").
b. Seller shall give Buyer the right to fix the price for a mutually
agreeable quantity not to exceed 60,000 MMBtu per day (the
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"Monthly Fixed Quantity") for a month or months (up to 12 months
but not to span more than one fiscal year as described in Article XXI)
during the Term starting on the date of contract execution. If Buyer
desires to fix the price for more than one month, the fixed quantity
may differ for each corresponding month. Buyer shall nominate the
Monthly Fixed Quantity no later than 9:00 a.m. (CCT) on the tenth
(10th) day of the month prior to the first day of the applicable month
of delivery. Buyer shall nominate the agreed upon Monthly Fixed
Quantities no later than 9:00 a.m. (CCT) on the tenth (10th) day of
the month prior to the first day of the first month of the applicable
months of delivery of the Fixed Quantities, if the price and quantities
are fixed for more than one month. The fixed price for the Monthly
Fixed Quantity will be established based on the options described in
Exhibit "C" using the then-current price of Henry Hub natural gas
futures contracts and adding a basis differential to reflect the
difference in price between Henry Hub and Houston Ship Channel
prices and adding any additional costs required consistent with
Seller's pricing methodology for transactions with similar risk
parameters (the "Monthly Fixed Price").
Buyer shall also have the right to request to fix the price for a mutually
agreeable quantity not to exceed 60,000 MMBtu per day inclusive of
the Monthly Fixed Quantity (the "Intra-Month Fixed Quantity") on an
intra-month basis during the Term and for a mutually agreeable price
based on the options described in Exhibit "C" (the "Intra-Month Fixed
Price"). The parties shall agree to such Monthly Fixed Price or Infra-
Month Fixed Price and Monthly Fixed Quantity and Intra-Month Fixed
Price, as applicable, in a separately negotiated, mutually agreed
upon and executed confirmation in a form substantially similar to
Exhibit "D," which shall be considered a firm obligation for both
parties. In compliance with Exhibit "C," in the event that the Total
Daily Gas Requirement is less than the agreed Monthly Fixed Quantity
or Intra-Month Fixed Quantity, Seller will use commercially reasonable
efforts to dispose into the market the difference in volume between
the Total Daily Gas Requirement and the applicable Fixed Quantity
with the proceeds from these sales credited or debited to Buyer as
applicable.
c. A reservation fee of $0.0275 per MMBtu based on a capacity
reservation of 60,000 MMBtu per day (or $1,650 per day) (the "Daily
Reservation Fee").
3. If at any time the HSC Index should cease to be published or otherwise
becomes unavailable or not calculable, Buyer and Seller shall meet as soon
as practicable not to exceed three (3) calendar days to determine and
agree upon a comparable "Substitute Index." The Substitute Index shall be
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implemented retroactively as of the first day in which the HSC Index
became unavailable.
4. Buyer and Seller agree to consider alternative pricing options, and the
pricing method may be changed by mutual agreement, as evidenced by
a written amendment executed by both parties to this Contract.
ARTICLE III
POINTS OF DELIVERY AND PRESSURE
1. The Points of Delivery for all gas to be sold and purchased under this
Contract shall be at the outlet of Seller's (or Seller's designee's) existing
metering and pressure regulating facilities identified in Exhibit "A," which is
attached to and made a part of this Contract and which may be
amended from time to time as Points of Delivery are added or deleted.
2. The gas delivered under Points of Delivery (Exhibit "A") of this Contract shall
be measured through facilities which will be maintained by Seller (or Seller's
designee).
ARTICLE IV
MEASUREMENT
The measurement provisions for Points of Delivery shall be as follows:
a. Unit of Volume --The unit of volume for measurement of gas sold and
purchased shall be one (1) cubic foot of gas as provided by Sections
91 .051 through 91.062 of the Texas Natural Resources Code.
b. Basis -- All measurement facilities under this Contract shall be
operated under the standards approved by the American National
Standards Institute of June 28, 1977 and prescribed in the Gas
Measurement Committee of the American Gas Association, referred
to in this Contract as AGA, Report Number 3/American Petroleum
Institute Manual of Petroleum Measurement Standards, Chapter 14.3
(AGA Report No. 3/API 14.3), as it is now and from time to time may
be revised, amended, or supplemented. Where measurement is by
other than orifice meters, determination of the necessary factors for
proper volume shall be as mutually agreed in writing by the parties.
c. Atmospheric pressure -- The atmospheric pressure applicable at all
points of delivery shall be determined in accordance with AGA
Report No. 3/API 14.3 as it is now and from time to time may be
revised, amended, or supplemented.
d. Ideal Gas Laws -- Measurement under this Contract shall be
corrected for deviation from Ideal Gas Laws, and corrections shall be
determined in accordance with AGA Report No. 3/API 14.3 as it is
now and from time to time may be revised, amended, or
supplemented.
e. Where a displacement meter is used, the square of the orifice meter
super compressibility factor shall be applied, except as may
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otherwise be agreed in writing by the parties.
f. Determination of Flowing Temperature -- The temperature of gas
flowing through the measuring facilities under this Contract shall be
determined by means of the continuous use of a recording
thermometer or by such other method as the parties hereto may
agree in writing. The arithmetic average temperature of the gas
recorded each day, during periods of flow only, shall be used in
computing the quantity of gas delivered for that day.
g. Determination of Specific Gravity--The specific gravity of gas flowing
through the measuring facilities under this Contract shall be
determined by use of a continuously recording gravitometer. The
arithmetic average specific gravity recorded each day, during
periods of flow only, shall be used in computing the gas volume for
that day. In the event a recording gravitometer is not installed, the
specific gravity of the gas under this Contract shall be determined at
approximately 30-day intervals or at such other intervals as may be
mutually agreed upon in writing by the parties hereto, by means
which are approved by the AGA as set forth in its Gas Measurement
Manual or by fractional analysis by the use of a spot or continuous
sample taken at the Point of Delivery.
h. Fractional analysis will be on a real gas basis in accordance with
ANSI/ASTM D3588-79, as it is now and from time to time may be
revised, amended, or supplemented. Specific gravities so
determined will be used in calculating gas volumes under this
Contract for the month in which the test is made and all succeeding
months until that month in which a new sample is taken.
Determination of Gross Heating Value -- The Gross Heating Value of
the gas shall be determined by means of a recording calorimeter,
employing the Thomas principle of calorimetry, proportional to flow
continuous sample, or such other method mutually agreed upon in
writing by the parties hereto. The arithmetic average of the hourly
Gross Heating Value recorded each day, during periods of flow only,
shall be considered as the heat content of the gas during such day.
If a recording calorimeter is not available, the Gross Heating Value
shall be determined at 30-day intervals or at such other intervals as
may be mutually agreed upon in writing by the parties hereto, by the
use of spot or continuous samples taken at the points of delivery.
Gross Heating Value of a sample to be obtained either by
calorimeter or chromatographic analysis using values of physical
constants for the gas compounds, and the procedure for
determining the Gross Heating Value of the gas shall be on a real gas
basis in accordance with ANSI/ASTM 03588-79, as it is now and from
time to time may be revised, amended, or supplemented. The Gross
Heating Value of gas so determined shall be considered for all
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purposes to be the Gross Heating Value of the gas for the month in
which the sample is taken and all succeeding months until that
month in which a new sample is taken.
ARTICLE V
MEASURING EQUIPMENT AND TESTING PROVISIONS
1. The measuring equipment and testing provisions for points of delivery shall
be as follows:
a. Access --The parties hereto shall at all reasonable times have access
to the premises of each other insofar as such premises are connected
with any matter or thing covered hereby, for inspection, operation,
installation, removal, repair and testing of equipment, but the
operation of measuring equipment and changing of charts shall be
done only by the employees or agents of the owner of such
equipment.
b. Testing and Repair of Equipment -- Seller (or Seller's designee) and
Buyer shall keep their respective measuring equipment, pressure
regulators and overpressure protective equipment, including
chromatographs, accurate and in repair. Monthly tests will be
required on measuring equipment. Buyer and Seller (or Seller's
designee) agree to provide each other sufficient advance notice of
the time of such tests so that Buyer or Seller (or Seller's designee) may
conveniently have its representative present. In the event measuring
equipment is found to be inaccurate, it will be adjusted to register
accurately. In the event either party or Seller's designee desires a
special test of any measuring equipment, the parties shall cooperate
to secure prompt verification of the accuracy of such equipment. If
upon any test, the percentage of inaccuracy of the measuring
equipment is found to be in excess of one (1) percent, registrations
thereof shall be corrected for a period extending back to the time
such inaccuracy occurred if such time is ascertainable, and if not
ascertainable, then back one-half (1/2) of the time elapsed since the
last date of calibration not to exceed fifteen (15) days.
c. Correction for Inaccurate Measurement -- If for any reason any
measuring equipment is out of service or out of repair so that the
quantity of gas delivered through such equipment cannot be
ascertained or computed from the readings thereof, the quantity of
gas so delivered during the period such equipment is out of service
or out of repair shall be estimated and agreed upon by the parties
hereto based upon the best available data, using the first of the
following methods which is feasible:
(1) By using the registration of any check measuring equipment
registering accurately;
(2) By correcting the error if the percentage of error is
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ascertainable by calibration, test or mathematical calculation;
or
(3) By estimating the quantity of gas delivered under this Contract
based on quantities delivered during preceding periods under
similar conditions when the respective measuring equipment
was registering accurately.
d. Inspection of Charts and Records -- The charts and records from the
measuring equipment shall remain the property of the owner thereof
and same shall be retained for a period of not less than five (5) years.
At any time within such period, upon request, each party or Seller's
designee will submit records and charts from the measuring
equipment, together with calculations therefrom, for inspection and
verification by the other party or Seller's designee. Such records and
charts shall be returned to the party providing same within thirty (30)
days after receipt.
e. Installation of Check Meters -- Buyer may, at its option, install a check
meter for checking the metering equipment at the Points of Delivery;
same shall be so installed as not to interfere with the operation of
metering facilities of Seller or Seller's designee.
2. Seller must provide filters, chromatographs and moisture detectors for the
Corpus Christi System and the Annaville/Calallen System.
ARTICLE VI
QUALITY
1. The quality provisions for Points of Delivery shall conform to the following
specifications:
a. Oxygen -- The oxygen content must not exceed two tenths (0.2%)
percent by volume.
b. Hydrogen Sulfide/Mercaptan -- Neither the hydrogen sulfide nor the
mercaptan content shall exceed one-half (1/2) grain per one
hundred (100) cubic feet.
c. Sulfur -- The total sulfur content must not exceed five (5) grains per
one hundred (100) cubic feet.
d. Carbon Dioxide -- The carbon dioxide content must not exceed two
(2) percent by volume.
e. Total Inerts - Not more than four (4) percent by volume including
carbon dioxide and nitrogen.
f. Liquids -- The gas shall be free of water and hydrocarbons in liquid
form at the temperature and pressure at which the gas is delivered
and shall have been dehydrated prior to being delivered by any
method other than the use of calcium chloride as a desiccant for
removal of water present therein in a vapor state and shall in no
event contain water vapor in excess of seven (7) pounds per one
million (1,000,000) cubic feet. Seller shall be responsible for
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collection and disposal of any liquids that may accumulate.
g. Dust, Gums, and Solid Matter -- The gas shall be free of dust, gums,
and other solid matter.
h. Gross Heating Value -- The gas delivered shall have a Gross Heating
Value of not less than nine hundred fifty (950) BTUs per cubic foot.
Temperature --The gas shall have a temperature of not less than forty
(40) degrees F and not more than one hundred twenty (120) degrees
F.
2. Any gas delivered by Seller to Buyer under this Contract which is accepted
by Buyer without protest within five (5) days of delivery, shall be deemed to
have met all of the quality specifications under the Contract. If at any time
gas tendered under this Contract fails to conform to any of the quality
specifications set forth above, Buyer shall notify Seller and Buyer may, at its
sole option, and in addition to pursuing any other legal or equitable
remedies available, refuse to accept delivery pending correction of the
deficiency by Seller. If Seller has not corrected any failure to meet quality
specifications within fifteen (15) days after receiving notice from Buyer of
such failure, then Buyer has the right to terminate this Contract after said
fifteen (15) day period and Seller shall be obligated to pay Buyer for any
reasonable damages and expenses incurred by the Buyer. It is expressly
agreed that such damages may include direct damages and expenses
incurred by the Buyer as well as any direct damage to Buyer's gas
distribution system pipelines or facilities incurred by the City resulting from
Seller's failure to comply with the Contract's quality specifications.
3. Buyer will not accept delivery of gas under this Contract at a Gross Heating
Value of less than nine hundred fifty (950) BTU per cubic foot.
4. Seller agrees that the gas delivered to Buyer during the Term may not
contain any odorant which is not first approved in writing by Buyer. After
the odorant to be used is approved by Buyer, it may not be changed by
Seller without the written consent of Buyer. Such consent may not be
withheld unreasonably.
ARTICLE VII
INVOICING, PAYMENT, AND AUDIT
1. Invoice -- On or before the tenth (10th) day of each month, Seller shall send
to Buyer via email(s) as designated by Buyer, an invoice reflecting the
quantity of gas delivered to and purchased by Buyer during the preceding
calendar month, which shall not be less than the Fixed Quantity, if
applicable.
2. Payment - Thirty (30) days after receipt of invoice, Buyer shall pay to
Seller the amount due pursuant to this Contract for deliveries during the
preceding calendar month. Payment shall be the sum of the daily
Index Price multiplied by the difference between the Total Daily Gas
Requirement and the Fixed Quantity; plus the sum of the daily Fixed
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Quantity Payment as defined in and based on the payment structure
in Exhibit "C"; plus the sum of the Daily Reservation Fees for the month;
provided, however, if the Buyer pays to Seller the amount due by the
fifteenth (15) day after receipt of invoice, then Buyer shall receive a
credit in the next month's invoice equal to $0.01 multiplied by the
MMBtus reflected in the corresponding delivery month's invoice.
The remittance shall be via ACH transfer:
Pay: Bank of America, N.A.
For the Account of: NextEra Energy Marketing, LLC
Account No.: 3751 227650
Fed. ABA No.: 1 1 10-0001-2.
If Buyer in good faith disagrees with the amount of any invoice, Buyer shall
notify Seller of such disagreement so that it may be resolved before the
date for payment of such invoice. If Buyer fails to give such notice of
disagreement, or if Buyer and Seller do not resolve such disagreement
before the due date, the amount of the invoice not in dispute shall be paid
by Buyer on the due date. Such payment shall be subject to adjustment
without penalties upon final resolution of the disagreement.
3. Adjustment of Errors -- In the event an error is discovered in any invoice or
payment hereunder, such error shall be adjusted within ninety (90) days of
the determination thereof; provided, however, that claim therefore shall
have been made within two (2) years from the date of such invoice or
payment.
4. Audit -- Each party hereto shall have, at its expense, the right at all
reasonable times to examine the books and records of the other party
pertaining to the performance of the Contract to the extent necessary to
verify accuracy of any invoice, charge, computation, or demand made
under or pursuant to this Contract. Each party agrees to keep records and
books of account in accordance with generally accepted accounting
principles and practices in the industry. Any invoice shall be final as to both
parties unless questioned within two (2) years after payment of such
invoice.
ARTICLE VIII
TERM
Subject to the provisions of this Contract, this contract shall be effective and
continue in full force from the date of the termination of the Gas Supply Purchase
Contract entered into as of August 1, 2016 between Seller and Buyer until 9:00
a.m., CST, on August 1, 2026 (the "Term").
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ARTICLE IX
FORCE MAJEURE
1. Definition of Force Majeure --The term "force majeure" as employed herein
shall mean acts of God, strikes, lock outs, or other industrial disturbances,
acts of public enemy, sabotage, wars, blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, storms, floods, high
water, washouts, or other natural disasters, threat of physical harm or
damage resulting in the evacuation or shutdown of facilities necessary for
the production, delivery, receipt or storage of gas, arrests and restraints of
governments and people, civil disturbances, explosions, breakage or
accident to machinery or lines of pipe, the necessity for testing or for
making repairs or alterations to machinery or lines of pipe, partial or entire
failure of wells, processing, storage or transportation facilities, or gasification
and gas manufacturing facilities, the orders of any court, regulatory body
or government authority or agency having jurisdiction, or the refusal or
withdrawal of any necessary order, certificate or permit by any court,
regulatory body or governmental authority or agency having jurisdiction,
operational flow orders or implementation of system management plans or
any other acts or omissions (including failure to take or deliver gas) of a
transporter of Gas for either Buyer or Seller not caused by any acts or
omissions of Buyer or Seller, and any other causes, whether of the kind
herein enumerated or otherwise, not within the control of the party claiming
suspension of Contract obligations and which, by the exercise of due
diligence, such party or its subcontractor is unable to overcome. Nothing
contained herein, however, shall be construed to require either party to
settle a strike against its will.
2. Effect of Force Majeure -- In the event either Seller or Buyer is rendered
unable by force majeure to itself or a necessary third party to wholly or in
part carry out its obligations under the provisions of this Contract, it is
agreed that the party so affected shall give notice within seventy-two (72)
hours to the other party, and the obligations of the party affected by such
force majeure, other than the obligation to make payments hereunder,
shall be suspended during the continuance of any inability so caused but
for no longer period, and such cause shall so far as possible be remedied
with all reasonable dispatch.
ARTICLE X
SUCCESSORS AND ASSIGNS
No assignment of this Contract or any of the rights or obligations under this
Contract, whether by purchase, merger, consolidation, or otherwise, shall be
made unless there first shall have been obtained the written consent to the
assignment of the non-assigning party. Such consent may not be withheld
unreasonably. Seller or Buyer may pledge or assign its respective right, title, and
interest in, to and under this Contract to a trustee or trustees, individual, or
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corporate, as security for bonds or other obligations or securities without the
necessity of such trustee(s) becoming in any respect obligated to perform the
obligations of the assignor under this Contract. This Contract i s for the sole benefit
of the parties hereto and their respective successors and permitted assigns, and
shall not inure to the benefit of any other person or entity whomsoever, it being
the intention of the parties hereto that no third person shall be deemed a third
party beneficiary of this Contract or otherwise have any rights hereunder.
ARTICLE XI
WARRANTY OF TITLE
SELLER WARRANTS THE TITLE TO ALL GAS DELIVERED UNDER THIS CONTRACT. THE
FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER
WARRANTIES WHETHER WRITTEN, ORAL, IMPLIED OR STATUTORY. EXCEPT AS
SPECIFICALLY PROVIDED HEREIN, SELLER HEREBY DISCLAIMS ALL WARRANTIES OF
ANY KIND, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE XII
INDEMNITY AND LIMITATION OF LIABILITY
TO THE EXTENT ALLOWED BY TEXAS LAW, SELLER, ITS OFFICERS, MEMBERS, PARTNERS,
EMPLOYEES, AGENTS, AND LICENSEES (FOR THE PURPOSES OF THIS ARTICLE CALLED
"SELLER") HEREBY FULLY INDEMNIFIES, SAVES AND HOLDS HARMLESS THE CITY OF
CORPUS CHRISTI, ITS OFFICERS, EMPLOYEES, AGENTS, LICENSEES, AND INVITEES
("INDEMNITEES") AGAINST ANY AND ALL LIABILITY, DAMAGE, LOSS ,CLAIMS,
DEMANDS, AND ACTIONS OF ANY NATURE WHATSOEVER ON ACCOUNT OF
PERSONAL INJURY (INCLUDING, WITHOUT LIMITATION ON THE FOREGOING,
WORKERS' COMPENSATION AND DEATH CLAIMS), OR PROPERTY LOSS OR
DAMAGE OF ANY KIND WHATSOEVER, WHICH ARISES OUT OF OR IS IN ANY
MANNER CONNECTED WITH, OR IS CLAIMED TO ARISE OUT OF OR BE IN ANY
MANNER CONNECTED WITH SELLER'S INTENTIONAL OR NEGLIGENT ACTS IN ITS
RESPECTIVE CONTROL WITH REGARD TO THE DELIVERY OF GAS. SELLER MUST, AT ITS
OWN EXPENSE, INVESTIGATE ALL THOSE CLAIMS AND DEMANDS, ATTEND TO THEIR
SETTLEMENT OR OTHER DISPOSITION, DEFEND ALL ACTIONS BASED THEREON WITH
COUNSEL SATISFACTORY TO INDEMNITEES AND PAY ALL CHARGES OF ATTORNEYS
AND ALL OTHER COST AND EXPENSES OF ANY KIND ARISING FROM ANY OF SAID
LIABILITY, DAMAGE, LOSS, CLAIMS, DEMANDS, OR ACTIONS.
TO THE EXTENT ALLOWED BY TEXAS LAW AND SUBJECT TO COMPLIANCE WITH
APPLICABLE TEXAS CONSTITUTIONAL REQUIREMENTS, THE CITY HEREBY FULLY
INDEMNIFIES, SAVES AND HOLDS HARMLESS SELLER, ITS OFFICERS, EMPLOYEES,
AGENTS, LICENSEES, AND INVITEES ("SELLER GROUP") AGAINST ANY AND ALL
CLAIMS, FOR PERSONAL INJURY (INCLUDING WORKERS' COMPENSATION AND
DEATH CLAIMS) OR PROPERTY LOSS OR DAMAGE OF ANY KIND WHATSOEVER,
WHICH ARISE OUT OF OR ARE IN ANY MANNER CONNECTED WITH, OR ARE
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CLAIMED TO ARISE OUT OF OR BE IN ANY MANNER CONNECTED WITH, THE CITY'S
INTENTIONAL OR NEGLIGENT ACTS IN ITS RESPECTIVE CONTROL WITH REGARD TO
THE RECEIPT OF GAS BY THE CITY. THE CITY MUST, AT ITS OWN EXPENSE, INVESTIGATE
ALL SUCH CLAIMS, ATTEND TO THEIR SETTLEMENT OR OTHER DISPOSITION, DEFEND
ALL ACTIONS BASED THEREON WITH COUNSEL SATISFACTORY TO SELLER, AND PAY
ALL CHARGES FOR ATTORNEYS AND ALL OTHER COSTS AND EXPENSES OF ANY KIND
ARISING FROM ANY OF SAID CLAIMS.
THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURE OF DAMAGES
PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR
BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF
DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL
BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR'S LIABILITY SHALL BE LIMITED
AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW
OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY
HEREIN PROVIDED, THE OBLIGOR'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL
DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND
EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY
ARE WAIVED. UNLESS OTHERWISE EXPRESSLY PROVIDED HEREIN, IN NO EVENT,
WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING
NEGLIGENCE), STRICT LIABILITY OR OTHER WISE, SHALL EITHER PARTY BE LIABLE TO
THE OTHER PARTY FOR LOSS OF PROFIT OR REVENUES, OR FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL INDIRECT, PUNITIVE OR EXEMPLARY DAMAGES.
ARTICLE XIII
TRANSFER OF TITLE TO AND POSSESSION OF GAS
1 . As between Buyer and Seller, Seller shall be deemed in control and
possession of the gas sold and purchased under this Contract and
responsible for any damage or injury caused thereby until the same shall
have been delivered to Buyer at the Points of Delivery in accordance with
terms of this Contract.
2. As between Buyer and Seller, Buyer shall be in control and possession of the
gas sold and purchased under this Contract and responsible for any
damage or injury caused thereby after the same shall have been delivered
to Buyer at the Points of Delivery in accordance with terms of this Contract.
ARTICLE XIV
REGULATORY BODIES
1. This Contract is subject to all valid orders, rules and regulations of any State,
federal or other regulatory body having jurisdiction over the purchase, sale
or use of the gas sold, and the parties agree to comply with such orders,
rules, and regulations. Should either of the parties, by law or regulation, be
ordered or required to do any act inconsistent with the provisions of this
Contract, this Contract shall be deemed to be modified to conform with
Page 12 of 26
such law or regulation.
2. Each of the parties understands that, should the Texas Railroad
Commission, or other governmental regulatory body, require approval for
the sale and purchase of gas under this Contract, then, each of the parties
will make any necessary applications or filings and will submit any records
or data to the regulatory body so that requisite regulatory authorization
may be granted.
3. If any order, rule or regulation of any State, federal or other regulatory body
significantly alters the relative benefits and burdens of the parties under this
Contract, Buyer and Seller shall revise this Contract to restore the balance
of risks, rewards, and costs originally set forth i n this Contract; provided,
however, if the parties cannot mutually agree to revise the Contract, the
matter may be submitted to either a dispute resolution process in
accordance with the provisions herein or as otherwise agreed to by the
parties.
ARTICLE XV
CONTRACT ADMINISTRATOR
The Contract Administrator designated by the City is responsible for approval of
all phases of performance and operations under this Contract including
deductions for non-performance and authorizations for payment. All of Seller's
notices or communications regarding this Contract must be directed to Bill
Mahaffey, Director of Gas Operations, 2726 Holly Road, Corpus Christi, TX 78415.
ARTICLE XVI
INDEPENDENT CONTRACTOR
Seller will perform the services hereunder as an independent contractor and will
furnish services in its own manner and method, and under no circumstances or
conditions may any agent, servant, or employee of Seller be considered as an
employee of the City.
ARTICLE XVII
INSURANCE
1. Insurance requirements are attached to and incorporated with this
Contract as Exhibit "B" and may be revised annually by the Contract
Administrator upon 30 days written notice to Seller. Notwithstanding the
aforementioned, any such revision shall be subject to the following: (i)
Seller's prior written consent, not to be unreasonably withheld, delayed or
conditioned; (ii) that the requested insurance is both reasonably and
commercially available; and (iii) that any incremental insurance-related
costs resulting from the City's request would be assumed and paid by the
City.
2. Before activities can begin under this Contract, Seller's insurance company
must deliver a Certificate of Insurance as proof of the required insurance
Page 13 of 26
coverage to the Contract Administrator.
3. Additionally, the Certificate must state that the City will be given at least 30
days' notice of cancellation or intent not to renew any of the policies.
4. The City must be named as an additional insured in each applicable policy
identified in Exhibit "B", Section II(D). The City Attorney must be given copies
of all certificates of insurance within 15 days of the Contract Administrator's
written request to Seller.
ARTICLE XVIII
CERTIFICATE OF INTERESTED PARTIES
Seller agrees to comply with Texas Government Code section 2252.908 and
complete Form 1295 Certificate of Interested Parties as part of this contract, if
required. For more information, please review the information on the Texas Ethics
Commission website at https://www.ethics.state.tx.us.
ARTICLE XIX
CONFLICT OF INTEREST
Seller agrees to comply with Chapter 176 of the Texas Local Government Code
and file Form CIQ with the City Secretary's Office, if required. For more information
and to determine if you need to file a Form CIQ, please review the information on
the City Secretary's website at htto://www.cctexas.com/government/city-
secretary/conflict-disclosure/index.
ARTICLE XX
SUBCONTRACTORS
Seller may use subcontractors and affiliates of Seller in connection with the work
performed under this Contract. When using subcontractors and affiliates of Seller,
however, Seller must obtain prior written approval from the Contract
Administrator, which shall not be unreasonably withheld. In using subcontractors,
Seller is responsible for all their acts and omissions to the same extent as if the
subcontractor or affiliate and its employees were employees of Seller. All
requirements set forth as part of this Contract are applicable to all subcontractors
and affiliates and their employees to the same extent as if the Seller and its
employees had performed the services.
ARTICLE XXI
FISCAL YEAR
All parties recognize that the continuation of any Contract after the close of any
fiscal year of the City, which fiscal year ends on September 30 annually, is subject
to appropriations and budget approval providing for such Contract item as an
expenditure in that budget. The City does not represent that the budget item will
be actually adopted, that determination being within the sole discretion of the
City Council at the time of adoption of each budget.
Page 14 of 26
ARTICLE XXII
WAIVER
No waiver of any breach of any term or condition of this Contract waives any
subsequent breach of this Contract.
ARTICLE XXIII
ACKNOWLEDGEMENT
Upon the effective date of this Contract, this Contract replaces and supersedes
the August 1, 2016 Natural Gas Supply Contract between the parties. By entering
into this Contract, each party acknowledges that Seller's February 2021 invoice
and Buyer's payment of such invoice are authorized by, and conform to, the
above-referenced Contract. Except in the event of a legislative or court-ordered
repricing of the Houston Ship Channel index or Henry Hub index or a court order
upheld on appeal finding that prices charged thereunder were illegal that, in any
such case, are directly applicable to the 2016 Contract and, in the case of
litigation, arises out of or relates to litigation initiated by third parties, the parties
acknowledge that all payment obligations under the 2016 Contract have been
satisfied and release each other from claims relating to Gas purchased by Buyer
and delivered by Seller during February 2021 .
ARTICLE XXIV
COMPLIANCE WITH LAWS
This Contract is subject to all applicable federal and State laws. All duties of the
parties will be performed in Nueces County, Texas. The applicable law for any
legal disputes arising out of this Contract is the law of the State of Texas.
ARTICLE XXV
VENUE
The venue for any disputes under this Contract is the United States District Court
for the Southern District of Texas - Corpus Christi Division Located in Nueces
County, Texas, and if such court refuses jurisdiction, then the appropriate district,
county, or justice court in and for Nueces County, Texas.
ARTICLE XXVI
AMENDMENTS
This Contract may be amended only by written agreement signed by duly
authorized representatives of both parties to this Contract.
ARTICLE XXVII
TERMINATION
1. Either party may terminate this Contract for the other parties' failure to
perform the services specified in this Contract. Failure to keep all insurance
policies in force for the entire term of this Contract is grounds for termination
Page 15 of 26
by City.
2. The terminating party must give the other party twenty (20) business days
written notice of the breach and set out a reasonable opportunity to cure.
3. If the breaching party has not cured within the cure period, the other party
may terminate this Contract immediately after the cure period. Such date
is an "Early Termination Date".
As of the Early Termination Date, the non-defaulting party shall determine, i n
good faith and in a commercially reasonable manner, the amount owed
(whether or not then due) with respect to, the "Net Settlement Amount," which is
the sum of (i) the quantity of gas which was not part of the Fixed Quantity
delivered and received between the parties on and before the Early Termination
Date for which payment has not yet been made by the City under this Contract
multiplied by the Index Price, plus all other applicable charges; plus (ii) the
Replacement Value; plus (iii) the Fixed Price Termination Value. Neither party shall
be liable for any delivery or receipt obligations after the Early Termination Date,
except for the Fixed Price Termination Value.
The "Replacement Value" shall be the Non-Delivered Gas Quantity
multiplied by the Adder, plus the Daily Reservation Fee times the days
remaining in the Term.
The "Non-Delivered .Gas Quantity" is the total estimated daily gas
requirement for resale within the operation of City's distribution system for
the remainder of the Term, minus the Fixed Quantity.
The "Fixed Price Termination Value" means the difference (if any) between
the Fixed Price and the Market Price multiplied by the Fixed Quantity for the
remainder of the Term, plus all of Seller's out of pocket costs to market and
sell the Fixed Quantity.
"Market Price" means the price for gas in a similar transaction at the
Delivery Point determined by the non-defaulting party in a commercially
reasonable manner.
Notice shall be given by the non-defaulting party to the defaulting party of
the Net Settlement Amount due to Seller from Buyer (the "Notice"). The
Notice shall include a written statement explaining in reasonable detail the
calculation of the Net Settlement Amount. The Net Settlement Amount as
well as any applicable set-offs between the parties as allowed by law, shall
be paid by the close of business on the second Business Day following such
Notice, which date shall not be earlier than the Early Termination Date.
Interest on any unpaid portion of the Net Settlement Amount as adjusted
by setoffs, shall accrue from the date due until the date of payment at a
Page 16 of 26
rate equal to the lower of (i) the then-effective prime rate of interest
published under"Money Rates" by The Wall Street Journal, plus two percent
per annum; or (ii) the Texas maximum applicable lawful interest rate for
municipalities.
Notwithstanding any other provision of this Contract, i f Buyer fails to pay
Seller any amounts due under the Contract on a timely basis, Seller shall
have the right to (a) suspend performance under the Contract until such
delinquent amounts plus accrued interest calculated at a rate equal to the
lower of (i) the then-effective prime rate of interest published under "Money
Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the
Texas maximum applicable lawful interest rate for municipalities, have
been paid or (b) exercise any remedy available at law or in equity to
enforce payment of such amount plus interest, provided, however, that i f
the City, in good faith, disputes the amount of any such billing or part
thereof and pays such amounts as it concedes to be correct, no suspension
shall be permitted.
ARTICLE XXVIII
NOTICE
Notice must be given by fax, hand delivery, or certified mail, postage prepaid,
and is deemed received on the day faxed or hand delivered or on the third day
after deposit if sent certified mail. Notice shall be sent as follows:
If to Buyer: If to Seller:
City of Corpus Christi NextEra Energy Marketing, LLC
Attn: Bill Mahaffey Attn: Martin Gajewski
Director of Gas Operations Senior Trader
2726 Holly Road 700 Universe Blvd.
Corpus Christi, TX 78415 Juno Beach, FL 33408
Telephone: (361) 826-1801 (561) 694-3204
Facsimile: (361) 826-1889 n/a
Email: BillM@cctexas.com martin.Qajewski@nexteraenergv.com
Page 17 of 26
AGREED TO BY:
BUYER: CITY OF CORPUS CHRISTI SELLER: NEXT ? •- NERGY
MARKETI► , C
°.. ..11114°1411111111°. Olt
City anage CREDIT
Mark Palanchian
Vice President&Managing Director 111111.
AA.. NextEra Energy Marketing, LLC
Date: aV I)) 'r Date: June 24, 2021
Attest: 5 1?�AtmORILt►
tia.)2.(-e— t ttiOZ/tra-- if COUNCIL...11:21,2,1,
Rebecca Huerta _.� : �
City Secretary SECRETARY
Approved as to form: This 30 day of , 2021
Miles Risley
City Attorney
By: k,,c,/2
Lisa Aguil
Assistant City Attorney
EXHIBITS:
Exhibit A List of Points of Delivery
Exhibit B Insurance Requirements
Exhibit C Fixed Price Addendum
Exhibit D Fixed Price Confirmation
Page 18 of 26
EXHIBIT"A"
POINTS OF DELIVERY( EXISTING )
NORMAL MAXIMUM MAXIMUM
STATION NAME OPERATING ANTICIPATED ANTICIPATED LOCATION
PRESSURE PRESSURE FLOW RATE
CORPUS CHRISTI SYSTEM
OLD BROWNSVILLE RD 145 150 1350 MCF/HR OLD BROWNSVILLE RD/SARATOGA
STATI O N
BEAR LANE STATION 145 150 1350 MCF/HR BEAR LN/JOE MIREUR RD
ANNAVILLE/CALALLEN
SYSTEM
RHEW STATION 165 200 200 MCF/HR RHEW RD/LEOPARD ST
VIOLET STATION 145 150 150 MCF/HR VIOLET RD/MALLARD DR
Page 19 of 26
Exhibit B
INSURANCE REQUIREMENTS
CONTRACTOR'S LIABILITY INSURANCE
A. Contractor must not commence work under this contract until all insurance
required has been obtained and such insurance has been approved by
the City, such approval not to be unreasonably withheld. Contractor must
not allow any subcontractor to commence work until all similar insurance
required of any subcontractor has been obtained.
B. Contractor must furnish to the City's Risk Manager and Director of Gas
Department, one (1) copy of Certificates of Insurance with applicable
policy endorsements showing the following minimum coverage by an
insurance company(s) acceptable to the City's Risk Manager. The City
must be listed as an additional insured on the General liability and Auto
Liability policies and a waiver of subrogation is required on all applicable
policies. Endorsements must be provided with Certificate of Insurance.
Project name and/or number must be listed in Description Box of Certificate
of Insurance. Contractor may satisfy the additional insured and waiver of
subrogation endorsement requirements by using blanket endorsements.
TYPE OF INSURANCE MINIMUM INSURANCE COVERAGE
30-day advance written notice of Bodily Injury and Property Damage
cancellation, non-renewal, or Per occurrence - aggregate
termination required on all
certificates and policies.
Commercial General Liability $5,000,000 Per Occurrence (Satisfied with any
including: combination of primary and excess insurance)
1. Commercial Broad Form
2. Premises-Operations
3. Products/Completed Operations
4. Contractual Liability
5. Independent Contractors
6. Underground Hazards
7. Explosion & Collapse
AUTO LIABILITY (including) $500,000 Combined Single Limit
1. Owned
2. Hired and Non-Owned
3. Rented/Leased
WORKERS' COMPENSATION Statutory and complies with Part II of this
(All States Endorsement if Company is Exhibit.
not domiciled in Texas)
Employer's Liability $500,000/$500,000/$500,000
Page 20 of 26
In the event of accidents of any kind related to this contract, Contractor must
furnish the Risk Manager with copies of all non-privileged accident reports by
the later of either (i) 10 days after Contractor's receipt of such report, or (ii) 10
days after the City's request for such report.
II. ADDITIONAL REQUIREMENTS
A. Applicable for paid employees, Contractor must obtain workers'
compensation coverage through a licensed insurance company. The
coverage must be written on a policy and endorsements approved by the
Texas Department of Insurance. The workers' compensation coverage
provided must be in an amount sufficient to assure that all workers'
compensation obligations incurred by the Contractor will be promptly met.
An All States Endorsement shall be required if Contractor is not domiciled in
the State of Texas.
B. Contractor shall obtain and maintain in full force and effect for the duration
of this Contract, and any extension hereof, at Contractor's sole expense,
insurance coverage written on an occurrence basis by companies
authorized and admitted to do business in the State of Texas and with an
A.M. Best's rating of no less than A- VII.
C. Contractor shall be required to submit a copy of the replacement
Certificate of Insurance to City upon reasonable request at the address
provided below within 10 days as requested by the City. Contractor shall
pay any costs incurred resulting from providing a copy of any replacement
Certificate of Insurance. All notices under this Exhibit shall be given to City
at the following address:
City of Corpus Christi
Attn: Risk Manager
P.O. Box 9277
Corpus Christi, TX 78469-9277
D. Contractor agrees that, with respect to the above required insurance, all
insurance policies are to contain or be endorsed to contain the following
required provisions:
• List the City and its officers, officials, employees, and volunteers, as
additional insureds by endorsement with regard to operations, completed
operations, and activities of or on behalf of the named insured performed
under contract with the City, with the exception of the workers'
compensation policy and employer's liability policy.
f
Page 21 o26
• Provide for an endorsement that the "other insurance" clause shall not
apply to the City of Corpus Christi where the City is an additional insured
shown on the policy;
• Workers' compensation and employers' liability policies will provide a waiver
of subrogation in favor of the City; and
• Provide thirty (30) calendar days advance written notice directly to City of
any, cancellation, non-renewal, or termination in coverage and not less
than ten (10) calendar days advance written notice for nonpayment of
premium.
E. Within thirty (30) calendar days of a cancellation, non-renewal, or
termination of coverage, Contractor shall provide a replacement
Certificate of Insurance and applicable endorsements to City. City shall
have the option to suspend Contractor's performance should there be a
lapse in coverage at any time during this contract. Failure to provide and
to maintain the required insurance shall constitute a material breach of this
contract.
F. In addition to any other remedies the City may have upon Contractor's
failure to provide and maintain any insurance or policy endorsements to
the extent and within the time herein required, the City shall have the right
to order Contractor to stop work hereunder, and/or withhold any
payment(s) which become due to Contractor hereunder until Contractor
demonstrates compliance with the requirements hereof.
G. Nothing herein contained shall be construed as limiting in any way the
extent to which Contractor may be held responsible for payments of
damages to persons or property resulting from Contractor's or its
subcontractor's performance of the work covered under this contract.
H. It is agreed that Contractor's insurance shall be deemed primary and non-
contributory with respect to any insurance or self-insurance carried by the
City of Corpus Christi for liability arising out of operations under this contract.
It is understood and agreed that the insurance required is in addition to and
separate from any other obligation contained in this contract.
2021 Insurance Requirements
Gas Utilities
Natural Gas Supply Agreement
06/11/2021 Risk Management- Legal Dept.
Page 22 of 26
Exhibit C
Price Addendum for Fixed Quantity (as defined in the Natural Gas Supply
Contract)
Note: For each Fixed Price Option, the "Fixed Quantity Payment" will be
calculated as described in that Option.
Fixed Price Option A - All Fixed HSC Price:
The Fixed Price for the Fixed Quantity shall be (i) Fixed HSC Price plus (ii) Adder
Fixed Quantity - as agreed upon by Buyer and Seller in the Fixed Price
Confirmation but not to exceed 60,000 MMBtu per day for each month in which
a Fixed Price is applicable
Fixed Price Term - as agreed upon by Buyer and Seller in the Fixed Price
Confirmation but no shorter than a month for any Monthly Fixed Quantities
Fixed HSC Price - as agreed upon by Buyer and Seller in the Fixed Price
Confirmation
Adder - As per contract paragraph I1.2.a.
(A) For any day during the Fixed Price Term where the Total Daily Gas
Requirement is below the Fixed Quantity, the Buyer shall pay the Seller the
Fixed Quantity Payment, which shall be: (i) Fixed Price for the Total Daily
Gas Requirement plus or minus (ii) applicable Usage Shortfall Payment. If
the Usage Shortfall Payment is positive, Buyer shall pay Seller the Usage
Shortfall Payment and if the Usage Shortfall Payment is negative, Seller
shall pay Buyer the absolute value of the Usage Shortfall Payment.
Where,
"Usage Shortfall Payment" shall mean (i) Usage Shortfall multiplied by (ii)
Net Liquidation Value.
"Usage Shortfall" shall mean (i) Fixed Quantity minus (ii) Total Daily Gas
Requirement
"Net Liquidation Value" shall mean (i) Fixed HSC Price minus (ii) HSC Index
"HSC Index" shall have the meaning as defined in Article II, subsection 2
Page 23 of 26
(B) For any day during the Fixed Price Term where the Total Daily Gas
Requirement is equal to or above the Fixed Quantity, the Buyer shall pay
the Seller the Fixed Quantity Payment, which shall be: (i) Fixed Price for the
Fixed Quantity plus (ii) Index Price for the amount of the Total Daily Gas
Requirement that exceeds the Fixed Quantity.
Where,
"Index Price" is defined in Article II, subsection 2
Fixed Price Option B -Fixed Henry Hub Price with floating Basis:
The Fixed Price for the Fixed Quantity shall be (i) Fixed Henry Hub Price plus (ii)
Adder plus (iii) Actual Basis
Fixed Quantity - as agreed upon by Buyer and Seller in the Fixed Price
Confirmation but not to exceed 60,000 MMBtu per day for each month in which
a Fixed Price is applicable
Fixed Price Term - as agreed upon by Buyer and Seller in the Fixed Price
Confirmation but no shorter than a month for any Monthly Fixed Quantity
Fixed Henry Hub Price - as agreed upon by Buyer and Seller in the Fixed Price
Confirmation
Adder - As per contract paragraph ll.2.a.
Where,
"Actual Basis" shall mean (i) HSC Index minus (ii) Daily Henry Hub Index
"Daily Henry Hub Index" shall mean the price per MMBtu posted in Platts,
Gas Daily, under the headings "Daily Price survey ($/MMBtu)", in the
section "Louisiana/Southeast", in the row "Henry Hub" and in the column
titled "Midpoint".
"HSC Index" shall have the meaning as defined in Article II, subsection 2
(A) For any day during the Fixed Price Term where the Total Daily Gas
Requirement is below the Fixed Quantity, the Buyer shall pay the Seller the
Fixed Quantity Payment, which shall be: (i) Fixed Price for the Total Daily
Gas Requirement plus or minus (ii) applicable Usage Shortfall Payment. If
the Usage Shortfall Payment is positive, Buyer shall pay Seller the Usage
Page 24 of 26
Shortfall Payment and if the Usage Shortfall Payment is negative, Seller
shall pay Buyer the absolute value of the Usage Shortfall Payment.
Where,
"Usage Shortfall Payment" shall mean (i) Usage Shortfall multiplied by (ii)
Net Liquidation Value.
"Usage Shortfall" shall mean (i) Fixed Quantity minus (ii) Total Daily Gas
Requirement
"Net Liquidation Value" shall mean (i) Fixed Henry Hub Price minus (ii)
Daily Henry Hub Index
(B) For any day during the Fixed Price Term where the Total Daily Gas
Requirement is equal to or above the Fixed Quantity, the Buyer shall pay
the Seller the Fixed Quantity Payment, which shall be: (i) Fixed Price for the
Fixed Quantity plus (ii) Index Price for the amount of the Total Daily Gas
Requirement that exceeds the Fixed Quantity.
Where,
"Index Price" is defined in Article II, subsection 2
Page 25 of 26
Exhibit D
Sample- Fixed Price Confirmation
The parties hereby agree:
Fixed Quantity- MMBtu per day
Fixed Price Term - (For any Monthly Fixed Quantities, not to exceed 12 months
or span more than one fiscal year as described in Article II)
Fixed Henry Hub Price - $ per MMBtu
Fixed HSC Price - $ per MMBtu
Fixed Price Option Type:
Option A (Fixed HSC Price) _ Option B (Fixed Henry Hub Price)
AGREED TO BY:
BUYER: CITY OF CORPUS CHRISTI SELLER: NextEra Energy Marketing LLC
City Manager
Date: Date:
Attest:
Rebecca Huerta
City Secretary
Approved as to form: This day of , 2021
Miles Risley
City Attorney
By:
Lisa Aguilar
Assistant City Attorney
Page 26 of 26