AGENDA CAPTION:
Title
Consider approval of Resolution 2020-109R, approving contracts with Hays Energy, LLC for the sale of reclaimed water for and the treatment of Wastewater from Hays Energy’s Electric Power Generation Facility South of the city; authorizing the City Manager, or his designee, to execute said contracts on behalf of the City; and declaring an effective date.
Body
Meeting date: June 2, 2020
Department: Public Services - Water/Wastewater, Tom Taggart, Director
Amount & Source of Funding
Funds Required: N/A
Account Number: N/A
Funds Available: N/A
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Fiscal Note:
Prior Council Action: Original contracts approved by Council in June 1999; amendments to contracts approved by Council in July 2000, July 2004, and May 2007.
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Background Information:
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Hays Energy LLC was the first contracted customer of the City’s to purchase and use reclaimed water in their power generation process. As part of the original agreements with the City, Hays Energy built the reclaimed water pipeline from the Wastewater Treatment Plant to their facility on Francis Harris Lane. This pipeline is the backbone of the reclaimed water transmission system which provides opportunities for the continued expansion of the reclaimed water system to other customers.
The current reclaimed water supply agreement with Hays Energy LLC is due to expire in July 2020. City staff worked closely with Hays Energy LLC to develop the proposed contract to be beneficial and fair to both parties. The major changes to the proposed agreement as compared to the current contract are as follows:
• A reduction in volume of the “Base Quantity” of reclaimed water from 2,000,000 gallons per day to 750,000 gallons per day
• The “Maximum Quantity” of up to 2,600,000 million gallons per day was replaced by a “Reserve Quantity” of an additional 550,000 gallons per day
• The “Reserve Quantity” is based on a “take or pay” basis meaning regardless of the actual amount of reclaimed water used, Hays Energy will make a minimum monthly payment based on the prevailing rate of reclaimed water times the number of days in the month of usage for the volume of the “Reserve Quantity”.
• A “Re-Opener” clause was also added which allows for either party to request an increase or decrease of the Base and/or Reserve quantities within the first 2 years of the agreement. The request must be mutually agreed upon by both parties.
The terms of the Wastewater Treatment Services contract, also due to expire in July 2020, remain relatively unchanged with only sections and references to Hays Energy’s construction of the wastewater line to the Treatment Plant removed due to the wastewater line being completed.
Council Committee, Board/Commission Action:
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Recommendation:
Staff recommends approval of the proposed contracts.