Resolution No. 5960
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RESOLUTION NO. 5960
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A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF VERNON APPROVING AND AUTHORIZING
THE EXECUTION OF A GAS PURCHASE AND SALES
AGREEMENT BY AND BETWEEN THE CITY OF
VERNON AND THE SIGNAL FUELS TRADING
COMPANY, AND AUTHORIZING THE CHIEF
EXECUTIVE OFFICER TO EXECUTE BUYER'S
NOTICES TO ADJUST AMOUNTS ON A MONTHLY
BASIS
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WHEREAS, recent decisions of the California Public
8 utili ties commission have made natural gas supplies and
9 transportation more available to users such as the City of
10 Vernon; and
11 WHEREAS, the City of Vernon has elected to participate
12 in the Targeted Sales Program with the Southern California Gas
13 Company (" SoCalGas"); and
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WHEREAS, the Targeted Sales Program provides that a
15 third party such as Signal Fuels Trading Company may act as
16 agent for a customer such as the City; and
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WHEREAS, the Signal Fuels Trading Company has offered
18 both to sell natural gas on favorable terms to the City of
19 Vernon and to act as the City's agent for acquiring said natural
20 gas, which terms are set forth in the Gas Purchase and Sales
21 Agreement; and
22 WHEREAS, SoCalGas has not yet computed the allocations
23 of natural gas available to the city from the Permian basin, one
24 of the quantities to be set forth in Exhibit A to the Gas
25 Purchase and Sales Agreement; and
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WHEREAS, the Gas Purchase and Sales Agreement, in
27 addition to the basic quantities and prices set forth in Exhibit
28 A, also provides that the parties may execute Buyer'S Notices in
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the form set forth by Exhibit B to adjust amounts of natural gas
on a monthly basis according to whether transportation from the
areas set forth in Exhibit A is interrupted and whether natural
gas is available at lower prices from other areas; and
WHEREAS, the Chief Executive Off icer may need to
execute said Buyer's Notices during the period between regularly
scheduled City Council meetings to take advantage of lower
prices for natural gas in a timely fashion.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon
hereby finds and determines that the recitals contained
hereinabove are true and correct.
SECTION 2: The City Council of the City of Vernon
hereby approves the Agreement, a copy of which has been
presented to the City Council concurrently with this resolution
and the city Council hereby orders said Agreement to be received
and filed by the City Clerk. The City Council recognizes that
some of the quantities to be set forth in Exhibit A to the
Agreement have not been computed.
SECTION 3: The City Council of the City of Vernon
hereby authorizes the Mayor and the city Clerk to execute said
Agreement for, and on behalf of, the City of Vernon before
August 1, 1991, but after all the quantities and prices have
been set forth in Exhibit A to the Agreement.
SECTION 4: The City Council of the City of Vernon
hereby authorizes the Chief Executive Officer of the Light and
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1 Power Department to execute Buyer's Notices in the form set
2 forth by Exhibit B to the Agreement to adjust amounts on a
3 monthly basis for, and on behalf of, the City of Vernon.
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SECTION 5: The City Clerk of the City of Vernon shall
5 certify to the passage of this resolution and thereupon and
6 thereafter the same shall be in full force and effect.
7 APPROVED AND ADOPTED this 16th day of July, 1991.
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.~.. . . . --- LEONIS C. ~ Mayo;:1' .
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BRUCE V. MALKENHORST, City Clerk
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of
Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 5960, was duly adopted by the City Council of the
City of Vernon at a regular meeting of the City Council duly
held on Tuesday, July 16, 1991, and thereafter was duly signed
by the Mayor of the City of Vernon.
Lv.~~4::rk
(SEAL)
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SIGNAL FUELS TRADING COMPANY
GAS. PURCHASE AND SALES AGREEMENT
FOR COMPLIANCE WITH
SOUTHERN CALIFORNIA GAS COMPANY
PROCUREMENT PROGRAM
This Agreement, when executed in the space provided below, shall
set forth the terms and conditions by and under which SIGNAL FUELS
TRADING COMPANY, as Seller, shall deliver and sell to the CITY OF
VERNON, and Buyer, certain quantities of natural gas as follows:
1. NATURE OF SERVICE: Seller shall be the sole source of supply
of natural gas for the Buyer1s gas turbines during the term of the
agreement.
2. TERM: This Agreement shall commence and become effective on
August 1, 1991, and continue for a period of one (1) year.
3. QUANTITY AND PRICE: subj ect to all the terms, condi tions, and
limitations set forth in this Agreement, Seller agrees to sell and
cause to be delivered to Buyer and Buyer agrees to purchase and
receive from Seller gas in the quantities and at the prices as set
forth in Exhibit UAU of this Agreement. From time to time on a
monthly basis for the purpose of purchasing natural gas when
natural gas through Exhibit UAU is not available, or it is more
expensive, the parties may execute Buyer1s Notices in the form set
forth in Exhibit "B".
4. DELIVERY POINT: Gas shall be delivered at the Points of
Delivery as set forth in Exhibit A and/or Exhibit B.
5. PRIORITY: Gas shall be delivered at the point of Delivery
which will provide the Buyer the least cost at the Buyer's meter.
6. AGENCY: Seller is designated Buyer's agent for the purposes
of informing Southern California Gas Company (USoCaIGas") of the
Nominated Volume and shall make said nominations on behalf of Buyer
as required by SolCalGas, as well as for the purposes of balancing
and imbalance trading. Buyer shall provide the Seller with weekly
and monthly meter readings if available so that Seller may monitor
gas utilization and adjust nominations. Buyer shall make best
effort to provide Seller with at least 72 hours prior telephone
notification, followed by a confirmation letter, of significant
changes in gas usage including, but not limited to, production
changes, plant shutdowns for any reason or other changes in usage
so that gas nomination volumes can be adjusted accordingly.
7. BALANCING: Seller and Buyer will make every reasonable effort
to avoid imbalances. In the event an imbalance greater than the
SoCalGas tolerance level occurs, Seller will make every reasonable
effort to trade such imbalance at no extra cost to Buyer. If
additional cos.t is incurred by the city of Vernon due to an
imbalance, the party responsible for the imbalance will also be
responsible for the additional cost.
8. SOCALGAS AS PURCHASER: Buyer shall have the option to
designate SoCalGas as the purchaser of natural gas made available
to the Buyer by the Seller pursuant to this Agreement. Seller
agrees to reimburse the Buyer for the excess payment if SoCalGas's
payment to Seller is greater than what the bill to the Buyer would
have been if the buyer purchased the gas.
9. TARGETED SALES: Upon the termination of the Targeted Sales
Service Agreement between the Buyer and SoCalGas, or upon Buyer's
inability to purchase gas through the Targeted Sales Service
Agreement, the following changes shall be in effect:
9.1 Seller shall no longer be an agent of Buyer.
9.2 Quantities and price will be subject to mutual agreement.
9.3 Seller may not be the sole source of supply of natural gas.
9.4 Exhibit "B" shall be used for monthly purchases.
10. QUALITY AND MEASUREMENT: All units of measurement,
measurement specifications and devices, quality, heating value,
testing specifications, delivery terms, and specifications of the
gas to be delivered to "Buyer" pursuant hereto shall be in
accordance withSoCalGas rules, regulations and tariffs as filed
with and approved by the California Public commission, as may be
changed time to time. All such rules, regulations and tariffs are
hereby expressly incorporated herein by reference.
11. PASSAGE OF TITLE: Title to all gas hereunder shall pass from
Seller to Buyer at the applicable delivery point.
12. WARRANTY OF TITLE: Seller warrants its title and right to
sell all natural gas delivered hereunder, and warrants that such
gas shall be free and clear for liens and adverse claims and is in
conformity with all valid laws, order, rules and regulations of
duly constituted authorities having jurisdiction.
13. BILLING AND PAYMENT: On or before the tenth (10th) work day
of the month following each month of deliveries, Seller shall
render an invoice to Buyer stating the total amount of gas sold
hereunder during the preceding calendar month. On or before the
twenty-fifth (25th) day of the month or fifteen (15) days after
receipt of invoice, following each month of deliveries, Buyer shall
render payment to Seller for the total amount of gas purchased
hereunder during the preceding calendar month.
14. FORCE MAJEURE: Neither party hereto shall be liable for any
failure by performance due to causes beyond its reasonable control,
the occurrence of which could not have been prevented by the
exercise of due diligence, such as acts of God, acts of the other
party, acts of civil or military authority, fires, strikes, floods,
epidemics, war or riot. Provided, however, that neither party
shall be relieved of any of its obligations hereunder solely by
reason of that party's financial inability to perform. Refusal of
either party to accede to demands of laborers or labor unions
which, in its sole discretion, it considers unreasonable shall not
deny that party the benefits of this provision.
15 . ASSIGNMENT: This contract may not be assigned wi thoutthe
written consent of both parties, which consent shall not be
unreasonably withheld.
J.6. GOVERNING LAWS: This contract was made in the state of
California and shall be governed by the laws of the state of
California.
17. NOTICES: Written notices, nominations, confirmations, billing
statements, payments, or other correspondence relating to this
Agreement shall be addressed to the following:
SELLER:
SIGNAL FUELS TRADING COMPANY
SIGNAL FUELS TRADING COMPANY
410 17th Street, suite 1170
Denver, CO 80202
Attention: Mr. Justin C. sutton
BUYER:
CITY OF VERNON
CITY OF VERNON
Director
Light & Power Department
4305 Santa Fe Avenue
City of Vernon, CA 90058
Executed in duplicate this
~3(J(tJ day of ~ ., 1991-
SELLER: SIGNAL FUELS TRADING COMPANY
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BY:Cf;t CS~
BY: If---
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//# :::YER:
CITY OF VERNON
ATTEST:
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APPROVED AS TO FORM
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On behalf of: CITY OF VERNON
EXHIBIT A
Point of Delivery: Delivered to El Paso Pipeline
Firm Transporter: El Paso pipeline utilizing Southern California
Gas Company's transportation.
Price: The price of gas sold under this agreement is
$1.15 per DTH for San Juan Supply, $1.30 per
DTH for Permian supply.
Quantity:
Targeted Sales
Term Allocation
San Juan
SL-2
Permian
SL-2
August 91
September 91
October 91
November 91
December 91
January 92
February 92
March 92
April 92
May 92
June 92
July 92
203.8
203.8
203.8
185.4
185.4
185.4
185.4
185.4
185.4
185.4
203.8
203.8
256.0
256.0
256.0
212.1
212.1
212.1
212.1
212.1
212.1
212.1
256.0
256.0
Page 1 of 2
Total
459.8 DTH/Day
459.8 DTH/Day
459.8 DTH/Day
397.5 DTH/Day
397.5 DTH/Day
397.5 DTH/Day
397.5 DTH/Day
397.5 DTH/Day
397.5 DTH/Day
397.5 DTH/Day
459.8 DTH/Day
459.8 DTH/Day
EXHIBIT A
Point of Delivery: Delivered to Transwestern pipeline
Firm Transporter: Transwestern pipeline utilizing Southern
California Gas company's transportation.
Price: The price of gas sold under this agreement is
$1.25 per DTH for Central Supply.
Quantity:
Targeted Sales
Term Allocation
Central
SL-2
August 91
September 91
October 91
November 91
December 91
January 92
February 92
March 92
April 92
May 92
June 92
July 92
o
o
o
107.7
107.7
107.7
107.7
107.7
107.7
107.7
o
o
o
o
o
107.7
107.7
107.7
107.7
107.7
107.7
107.7
o
o
Page 2 of 2
Total
DTH/Day
DTH/Day
DTH/Day
DTH/Day
DTH/Day
DTH/Day
DTH/Day
DTH/Oay
DTH/Day
DTH/Day
DTH/Day
DTH/Day
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EXHIBIT "B"
ATTACHED TO AND HADE A PART OF GAS PURCHASES
AND SALE AGREEMENT BETWEEN
SIGNAL FUELS TRADING .COKPANY AS SELLER AND
CITY OF VERNON AS BUYER
DATED
Seller and Buyer agree as follows:
1. QUANTITY: 203.8/DTH - San Juan
256.0/DTH - Permian
2. PRICE: $1.15/DTH - San Juan
$1.30/DTH - Permian
3. TERM: The term of this Buyer I s Notice shall be from August 1,
1991 through and including August 31, 1991.
4. DELIVERY POINTS: EI Paso
SELLER
BUYER
SIGNAL FUELS TRADING COMPANY
CITY OF VERNON
By:
By:
Title:
Title:
Date:
Date: