Res 2020-109/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

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RETAIL RECLAIMED WATER SUPPLY CONTRACT This Retail Reclaimed Water Supply Contract (the "Contract") is made and entered into on —ld—It 30 2020 (the "Effective Date") between Nays Energy LLC (the "Buyer") and the City of San Marcos, Texas (the "Seller"). WITNESSETH WHEREAS, the Buyer owns an electric generating facility (the "Facility") in flays County, Texas that requires a supply of water for operating purposes; and WHEREAS, the Seller owns and operates a wastewater treatment plant (the "Treatment Plant") with a capacity capable of supplying to the Buyer the amount of reclaimed water specified in this Contract; and WHEREAS, the Buyer has in the preceding 20 years beneficially used water from the Treatment Plant (the "Reclaimed Water") in the Facility for operating purposes, and has satisfied itself as to this suitability; and WHEREAS, the Seller desires to sell and the Buyer desires to purchase Reclaimed Water under the terms and conditions specified in this Contract; and WHEREAS, the Seller and the Buyer entered into a Retail Water Supply Agreement dated June 29, 1999 (the "Original Contract"); and WHEREAS, the Seller and Buyer amended the Original Contract in July of 2000; and WHEREAS, the Seller and the Buyer desire to enter a new Retail Reclaimed Water Supply Contract, which new contract shall supersede the Original Contract (as amended) and the Original Contract (as amended) shall terminate simultaneously with the Effective Date and no longer be of any force and effect. NOW, THEREFORE, in consideration of the foregoing and the following mutual promises, covenants, benefits and agreements contained herein, the Seller and the Buyer agree as follows: Section 1.01. Quantity of Water to be Supplied. A. The Seller agrees to provide to the Buyer, and the Buyer agrees to purchase from the Seller, Reclaimed Water as requested by the Buyer. The Seller agrees to supply the Buyer up to 750,000 gallons per day (the "Base Quantity") of Reclaimed Water produced at the Treatment Plant for use in the Facility for operating purposes. The Seller agrees to supply the Buyer an additional 550,000 gallons per day (the "Reserve Quantity") of Reclaimed Water produced at the Treatment Plant for use in the Facility for operating purposes. The Seller agrees the Buyer may purchase Reclaimed Water above the combined Base and Reserve Quantities ("the Maximum Quantity") from the Seller at the prevailing rate for the sale of Reclaimed Water for all Reclaimed Water customers as established by the Seller's governing body (the "Prevailing Rate") to the extent available from production at the Treatment Plant and if not committed to other Reclaimed Water customers or needed by the Seller for other purposes. The Seller does not guarantee the availability of the Reclaimed Water above the Maximum Quantity of water each day. The Reclaimed Water will be delivered at the location (the "Point of Delivery") designated in 2000 by the Seller and the Buyer. The Seller's Treatment Plant operators and the Buyer will coordinate as needed to determine the quantity of Reclaimed Water required each day to maintain the Buyer's 2,200,000 -gallon reclaimed water tank at 60% to 95% of the tank's capacity to meet the Buyer's operational needs subject to the limitations stated above. B. The Buyer and Seller shall have until the second (2"d) anniversary of the Effective Date to request an increase or decrease of either the Base and/or Reserve Quantity (the "Re -Opener"). The Re -Opener shall be exercised by Buyer or Seller by written notice