RESOLUTION NO. RS2002-1042
A resolution approving certain changes to contracts with certain Customers of the Metropolitan Government's district energy system, certain change orders to the Metropolitan Government's contract with Constellation Energy Source, certain additional customer contracts, and related matters.
WHEREAS, by Bill No. BL2001-921, the Metropolitan Government approved a form of initial customer contract for the Metropolitan Government's district energy system for certain existing customers of the system, and the Metropolitan Government proposes to approve a change to such form of contract fixing customer costs for maintenance and repair of the distribution system in substantially the form attached as Exhibit A to this Resolution; and
WHEREAS, the Metropolitan Government proposes to market available system heating and cooling services and to enter into certain agreements with other prospective private and public customers of the system pursuant to contracts and to that end proposes to approve a change to the form of contract for existing customers to create a form of contract for new customers in substantially the form of the document attached as Exhibit C to this resolution; and
WHEREAS, the Metropolitan Government proposes to abandon certain improvements to the system permitted by the contract with Constellation Energy Source that have previously been approved and to replace them with substitute permitted improvements, within the same cost limitations as previously authorized;
WHEREAS, the Metropolitan Government proposes to streamline the approved forms of initial and additional customer contracts to accommodate small customers;
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY AS FOLLOWS:
SECTION 1 The approved form
of initial customer contract is permitted to be amended as set forth in Exhibit
SECTION 2 The amount in
Annex B of each initial customer contract, for each private customer, shall
be the amount set forth in the table for such customer set forth in Exhibit
B under the heading "Total EDS Allocation".
SECTION 3 The Metropolitan
Government may enter into a customer contract with an existing system customer
either in the form originally approved or in the amended form as set forth in
SECTION 4 The form of initial
customer contract previously approved by the Metropolitan Government may be
amended to read as set forth as Exhibit C to this resolution and such amended
contracts are hereby approved for execution and filing on behalf of the Metropolitan
Government with any new customer of the system and the Metropolitan Government
may include in such contracts provisions for customer payment for costs of line
extensions and interconnections.
SECTION 5 The Service Charge
to be inserted in any new customer contract authorized by this Resolution shall
be that amount that is projected to be ten percent less than the cost to the
customer if the customer provided the services itself (provided that in no event
shall the amount so determined be less than the Metropolitan Government's marginal
cost of generating and delivering the services being purchased), as determined
and certified by the Metropolitan Government's Project Administrator and approved
by the Director of Finance, whose signature on a customer contract shall conclusively
bind the Metropolitan Council as to the validity of the amount so determined.
SECTION 6 The "Service
Commencement Date", as defined in the Contract for the Design and Construction
of an Energy Generation Facility, Improvement of an Energy Distribution System,
and Long Term Operation and Management of the Nashville District Energy System
(the "Design, Construct, Operate Contract"), between the Metropolitan
Government and Constellation Energy Source, Inc., may be extended by up to one
hundred twenty days.
SECTION 7 Section 4.08 of
the Design, Construct, Operate Contract may be amended to change the reference
to 12 months to any longer period up to 18 months and to change the reference
to $1 million to any greater amount up to $3 million.
SECTION 8 The Metropolitan
Government is authorized to accept an assignment from Nashville Thermal Transfer
Corporation ("NTTC") of NTTC's right to receive revenues from contracts
between NTTC and its customers and (ii) rights and obligations of NTTC under
such contracts, and to undertake to perform such obligations.
SECTION 9 The permitted
inclusions in the scope of work set forth in Section 4.12 of the Design, Construct,
Operate Contract, may be amended as set forth in Exhibit D.
SECTION 10 To accommodate
small customers, the Metropolitan Government may enter into Agreements in the
form set forth in Exhibit A and Exhibit C, but modified to provide for customers
to pay flat and/or escalating monthly fees for services, or similar arrangements,
with such fees reasonably estimating the cost of providing service to such customers
without the need for metering service. Such fee shall be determined and certified
by the Metropolitan Government's Project Administrator and approved by the Director
of Finance whose signature on such Agreement shall conclusively bind the Metropolitan
Government as to the amount determined and the contract modifications. For the
purposes of this Section 10, small customers are defined as those requiring
contract capacities of less than or equal to 40 tons of chilled water and/or
400 pph of steam.
SECTION 11 This resolution
shall take effect from and after its adoption, the welfare of The Metropolitan
Government of Nashville and Davidson County requiring it.
Section 2.2(b) of the form of initial customer contract may be amended to read as follows:
(b) Pass Through Charges and Credits - an amount equal to the Customer's Pro Rata Portion of the following: charges permitted under Section 2.9, costs that are pass through costs or adjustments under a System Operating Agreement (other than pass through costs attributable to maintenance and repair of pipes and tunnels comprising the distribution system), and any other unforeseen and unbudgeted costs incurred in administering the System (provided that in no event shall the Supplier's administrative costs exceed the Incremental Costs), credits for expenses paid out of insurance proceeds, and any other applicable credits or cost reductions. In lieu of paying the Customer's Pro Rata Share of costs attributable to maintenance and repair of pipes and tunnels comprising the distribution system as a pass through cost, the Customer shall pay, in addition to the Customer's Pro Rata Share of $150,000 per year already included in the Base Steam/Chilled Water Facilities Fixed Operating Charges, escalated as set forth in the Initial System Operating Agreement or such other operating agreement as may then be in effect, the amount per year set forth in Annex B under the heading "Customer's Allocation of EDS Maintenance Costs", escalated at the same rate.
Section 2. Annex B of the form of initial customer contract may be amended to add the following:
Customer's Allocation of EDS Maintenance Costs
The Customer shall pay in
each year the following amount: __________________.
This amount shall be escalated in accordance with Section 14.04 of the Initial System Operating Agreement or in accordance with such other operating agreement as may then be in effect.
Table of EDS Allocations
|1||Washington Square||$ 3,800.00|
|2||Parkway Towers||$ 6,400.00|
|3||Union Planters||$ 2,800.00|
|4||Sheraton Hotel||$ 11,100.00|
|5||SouthTrust Bank||$ 2,300.00|
|6||Public Square Parking||$ 1,100.00|
|7||Hermitage Hotel||$ 2,500.00|
|8||501 Building||$ 2,100.00|
|9||Bell South||$ 2,000.00|
|10||SunTrust Bank||$ 8,200.00|
|11||SunTrust Financial Center||$ 7,100.00|
|12||Renaissance Hotel||$ 13,200.00|
|13||Renaissance Offices||$ 2,050.00|
|14||Nashville City Center||$ 6,800.00|
|15||Saint Mary's Church||$ 300.00|
|16||Ryman Auditorium||$ 1,600.00|
|17||Wildhorse Saloon||$ 1,650.00|
Form of Firm
Energy Supply Contract
For Additional System Customers
Form of Amendment to Contract for the Design and Construction of an Energy Generation Facility, Improvement of an Energy Distribution System, and Long Term Operation and Management of the Nashville District Energy System, between the Metropolitan Government and Constellation Energy Source, Inc.
Section 4.12 of the above-referenced contract is amended to read as follows:
Section 4.12. Additional Inclusions in Scope of Work. The Contractor and Metro have agreed on a general scope of work which includes the following: (i) improvements to and extensions of the existing distribution system, including connections to the EGF and new customers, (ii) improvements to customer systems to improve thermal efficiency, (iii) State distribution system improvements, (iv) metering for buildings connected to the System, (v) changes in pumping requirements and associated equipment, including projects to hydraulically isolate certain buildings from the EDS, (vi) electrical substation modifications, (vii) site preparation, including demolition, environmental abatement and utility relocation, (viii) additional boiler or chiller capacity and (ix) engineering and related matters. The foregoing work has an estimated cost of $8,000,000, which is not included in the Fixed Construction Price. Such work shall be done by change order and all or any portion of such work may be done up to but not exceeding the estimated cost under the authorization of this contract pursuant to Metro Council's initial contract authorization.
Sponsored By: Amanda McClendon, Jim Shulman
& Finance Committee
Public Works Committee
|Introduced:||May 21, 2002|
|Adopted:||May 21, 2002|
|Approved:||May 24, 2002|