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<br /> 42 <br /> ELECTRIC POWER AGREEMENT <br /> The City of San Marcos and Southwest Texas State University <br /> enter into this agreement relating to the City's sale of <br /> electricity to SWT on this 8th day of July , 1986. <br /> <br /> 1. BACKGROUND <br /> 1.01. The City is negotiating with the Lower Colorado River <br /> Authority for the purchase of LCRA's local electric distribution <br /> system. If the City purchases the distribution system it will <br /> then acquire electric power wholesale from power suppliers, and, <br /> in turn, sell this electric power (using the distribution system) <br /> to retail customers in and around the city. <br /> 1.02. SWT constitutes the largest electric power consumer in <br /> the city. It is unique in that it owns and maintains its own <br /> electric distribution system on its campus. The university is an <br /> agency of the State of Texas, with an obligation to state tax- <br /> payers to provide educational services as efficiently as possible. <br /> State law prohibits the university from paying local taxes. <br /> 1. 03. This agreement is contingent upon the City's acquiring <br /> the local electric distribution system from LCRA, and thereafter <br /> selling electric power on a retail basis to consumers, including <br /> SWT. If the City does not sell electricity to SWT neither party <br /> has any obligation under this agreement. <br /> 2. AGREEMENTS <br /> 2.01. The City anticipates establishing several classi- <br /> fications for its retail customers, based on load levels and usage <br /> characteristics, each with a different rate schedule for paying <br /> for electric power consumed. The parties agree that, currently <br />