Title
Authorize the City Manager to execute Amendment No. 5 to Interlocal Cooperation Contract with the Texas General Land Office to deliver natural gas to the Municipal Complex on a unit basis, equal to the NGPL Texok Zone monthly index price, as published by Platts Gas Daily, plus a Market Demand Factor of $0.54 per MMBtu, in accordance with Section 104.2545 of the Texas Utilities Code, for an additional term of two years commencing on October 1, 2025, and ending on September 30, 2027.
Body
Under Section 104.2545 of the Texas Utilities Code, the General Land Office (GLO) is allowed to sell natural gas transported by Atmos Energy’s distribution system to public entities with a metered annual average daily volume of 25 million British thermal units or more (9,125 MMBtu per year).
The gas meter that serves City Hall is the only City meter that meets this statutory volumetric threshold, and the City has been under contract with the GLO to provide natural gas to City Hall since 2015. The GLO operates on the State’s biennium, so the contract is amended every two years to reflect any changes in the City’s natural gas consumption and the GLO’s indexed gas price. This proposed amendment will extend GLO natural gas service to City Hall for another two-year term to expire on September 30, 2027.
Financial Implications
Natural gas purchased through the GLO is 30 percent lower than Atmos Energy’s commercial rate and based on natural gas consumption history for City Hall, the City saves up to $32,000 each year by contracting with the GLO as opposed to Atmos Energy.
Recommended/Desired Action
Staff recommends the City Manager be authorized to execute Amendment No. 5 to Interlocal Cooperation Contract with the Texas General Land Office.
Attachment(s)
Amendment No. 5 GLO Contract No. 16-088-000-4221
General Land Office Contract No. 16-088-000-4221
Drafter
Ted Chinn
Head of Department
Ted Chinn