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HomeMy Public PortalAbout012-1982 - Authorizing excution of Contract with IMPAAMENDED ORDINANCE NO. 12-1982 An ordinance of the City of Richmond, authorizing the execution and delivery of a Power Sales Contract and Capacity Purchase Agreement by and between the City of Richmond and the Indiana Municipal Power Agency, and other matters con- nected therewith. WHEREAS, the City of Richmond (the "Member") is a municipal corporation created and existing under the laws of the State of Indiana and is a member in good standing of the Indiana Munici- pal Power Agency (the "Agency"), a body corporate and politic and political subdivision of the State of Indiana, created pursuant to I.C. 8-1-2.2 (the "Act") and exercises thereunder a part of the sovereign powers of the State of Indiana; and WHEREAS, the Member owns and operates an electric utility which furnishes retail electric service to the public and owned and operated same on January 1, 1980; and WHEREAS, the Member is required by law to provide customers with an adequate, reliable and economical supply of electric power and energy; and WHEREAS, the Member is not financially capable of providing the planning, financing, locating and building of needed new facilities for generation and transmission; and WHEREAS, representatives of the Member have received and reviewed a Power Supply Study and other data compiled by R. W. Beck and Associates, consulting engineer for the Agency, and have attended meetings conducted by the Agency where the consulting engineer, general counsel, bond counsel, the under- writer and financial advisor to the Agency and counsel to the underwriter have answered questions and provided information to the Member and other members of the Agency and representatives of said members with respect to the terms and conditions of the Power Sales Contract (the "Contract"), the Capacity Purchase Agreement (the "Agreement") and the Agency's acquisition of an approximate 25% undivided ownership interest in Public Service Company of Indiana, Inc.'s ("PSI") Gibson Unit No. 5 and related facilities (the "Project") under a Joint Ownership and Purchase Participation Agreement (the "Ownership Agreement") among the Agency, PSI and other potential participants; and WHEREAS, the Member understands that the Agency has deter- mined to become the requirements supplier of electric power and energy to its members for the period provided in the Contract by resolution dated December 18, 1981; and WHEREAS, the Member recognizes that the Power Supply Study and other data compiled by R. W. Beck and Associates indicates that said requirements approach will provide the Member with an adequate, reliable and economical supply of electric power and energy and a more economical power and energy supply than other approaches outlined in said study and data and in presentations by said consulting engineer at various meetings conducted by the Agency and that this recognition provided the basis for said resolution of the Agency; and - 2 - WHEREAS, the Agency has been advised by Salomon Brothers Inc, managing underwriter to the Agency, and by Morgan Guaranty Trust Company, the Agency's financial advisor, that, in con- nection with the Agency's financing of its interest in the Project, contracts which provide for requirements purchases by the members are necessary to obtain financing on favorable terms; and WHEREAS, the Agency caused to be prepared a requirements Contract for execution by and between the Agency and the Member and prepared similar contracts for other members of the Agency and representatives of the Member have reviewed such Contract and have obtained independent advice and counsel with respect thereto where appropriate and said members have had an oppor- tunity to review the contracts with the Agency and the Agency has responded to said members by explaining and modifying the contracts; and WHEREAS, the Contract sets forth the terms and conditions for sales of electric power and energy by the Agency to the Member during the term of such Contract; and WHEREAS, the Contract, consistent with the Agency's reso- lution to become the requirements supplier of power and energy to the Member and other members of the Agency, provides that the Agency will sell and deliver to the Member, and requires the Member to purchase and receive from the Agency, commencing January 1, 1983, or such earlier date as shall be determined by the Agency upon thirty days notice to the Member, electric - 3 - power and energy required by the Member for the operation of its municipal electric system pursuant to the terms of the Contract; and WHEREAS, the revenues derived by the Agency under the Contract will be pledged, together with revenues derived by the Agency from other power sales contracts, to secure the payment of electric utility revenue bonds to be issued by the Agency; and WHEREAS, the Contract will become effective upon issuance of an order of the Public Service Commission of Indiana acceptable to the Agency approving the Project, including the Agency's acquisition of and financing for an approximate 25% undivided ownership interest in the Project, and will continue in effect, if the Agency enters into an ownership agreement with PSI for such interest in the Project and issues bonds to finance such purchase, until April 1, 2032, unless terminated pursuant to said Contract; and WHEREAS, under the Contract the Agency has full responsi- bility for planning and obtaining an adequate supply of power and energy for the Member and other members of the Agency; and WHEREAS, the Member owns and operates electric generating facilities, which provide only a portion of the required capacity for the present and future demand for electricity of the Member, and such generating facilities can be more effi- ciently and economically utilized by the Agency than by the Member and thus provide cost benefits to the Member pursuant to the terms and conditions of the Agreement; and - 4 - WHEREAS, the Agency caused the Agreement to be prepared and the Member by approving the execution of said Agreement deter- mines to furnish Dedicated Capacity (as defined in the Agree- ment) of its generating facilities to the Agency for the use and benefit of all members of the Agency to provide cost benefits to the Member; and WHEREAS, pursuant to the terms and conditions of the Agree- ment, the Agency will pay the Member on a monthly basis for said Dedicated Capacity provided to the Agency in accordance with the Agreement; and WHEREAS, the power and energy from the Project, together with the power and energy from the members' own generating facilities which are scheduled as said Dedicated Capacity under the Agreement and similar agreements among other members of the Agency and the Agency, and power and energy purchased from other utilities will be utilized by the Agency to meet the power and energy needs of the members of the Agency, including the Member; and WHEREAS, the Contract and Agreement marked as Exhibits A and B are attached hereto, incorporated herein by reference and two (2) copies of each are on file in the office of the Clerk for public inspection pursuant to I.C. 36-1-5-4; and WHEREAS, based upon such advice and the foregoing facts, the Member by this Ordinance hereby finds and determines to approve the Contract and the Agreement; NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE MEMBER: - 5 - SECTION 1. The Member is authorized pursuant to this Ordinance to enter into the Contract and the Agreement in the forms attached hereto as Exhibits A and B so that the Member may provide its customers with an adequate, reliable and eco- nomical supply of electric power and energy and join with other members of the.Agency for the purpose of the Agency providing the planning, financing, locating and building of needed new facilities for generation and transmission and for other purposes contemplated in the Contract and the Agreement. SECTION 2. The Member's electric utility shall purchase electric power and energy from the Agency under and pursuant to the terms of the Contract. The Agency shall have full responsibility for planning and obtaining an adequate supply of power and energy for the Member pursuant to the Contract. SECTION 3. The Member shall make Dedicated Capacity (as defined in the Agreement) of its generating facilities avail- able to the Agency under the Agreement for the use and benefit of all members of the Agency to provide cost benefits to the Member. SECTION 4. The findings and determinations set forth in the preambles to this Ordinance are hereby made findings and determinations of the City of Richmond. SECTION 5. By this Ordinance, the Mayor is hereby autho- rized and directed to execute and deliver, and the Clerk is hereby authorized to attest and seal, the Contract and the Agreement with such modifications therein as they shall approve by their execution thereof. SECTION 6. All ordinances and parts of ordinances in conflict herewith are hereby repealed. SECTION 7. This Ordinance shall be in full force and effect from and after its passage. PASSED AND ADOPTED by the Common Council of the City of Richmond, this (� day of _ , 1982. COMMON COUNCIL OF THE CITY OF RICHMOND, INDIANA Presiding Officer ATTEST: C rk (SEAL) Presented by me, the undersigned Clerk of the City of Richmond to the Mayor of said City for his/her approval on the /y � day of , 1982 at .'oo &.m. rem %�►�..�. r Approved by me, the undersigned Mayor of said City on the �G day of 1982 at : oo 'CL.m. - 7 -