Agenda - City of Dallas

BACKGROUND (Continued)
On February 23, 2011, Dallas and Luminant entered into an Untreated Water Purchase
Contract (“Long-Term Contract”) for a term of 40 years in accordance with the terms of
the Option, allowing Luminant to purchase Lake Fork water (in an amount of 6,000
acre-feet in calendar year 2011 and 12,000 acre-feet per year in calendar years 2012
through 2050) for use in the operation of its Martin Lake Power Plant. Martin Lake
Power Plant feeds into the ERCOT transmission system that powers most of the state
of Texas. Luminant has indicated Martin Lake is considered to be in the northern part of
the ERCOT system and the largest load centers in that part of the system are the
Dallas-Fort Worth metroplex, Tyler and Waco.
On September 1, 2011, Dallas and Luminant entered into a Short-Term Untreated
Water Purchase Contract (“Short-Term Contract”) via Administrative Action 112329 for
the sale by Dallas to Luminant of an additional 8,000 ac-ft of Lake Fork water for a term
commencing on August 29, 2011 thru February 29, 2012 and for the same purpose and
use as the untreated water purchased under the Long-Term Contract.
Due to the ongoing drought conditions, Luminant has a critical need to secure additional
water from Dallas to help ensure adequate water to support its Martin Lake Power Plant
operations.
Luminant desires to enter into an additional Short-Term Untreated Water Purchase
Contract (“Contract”) for the sale by Dallas to Luminant of an additional 8,000 ac-ft of
untreated water in calendar year 2012 and up to 8,000 ac-ft of untreated water in
calendar year 2013 of Lake Fork untreated water for the same purpose and use as the
untreated water purchased under the Long-Term and the Short-Term Contracts. If
Luminant does not need all or any portion of the 8,000 acre-feet of water allocated for
calendar year 2013, Luminant shall provide notice to Dallas by October 1, 2012, stating
the amount of water which Luminant plans to purchase in 2013.
Luminant plans to continue to divert the Lake Fork water from the Sabine River and
pump it to Martin Lake for use as cooling water in the operation of power generating
units at its Martin Lake Steam Electric Station Facility located in Rusk County, Texas.
At their expense Luminant constructed facilities necessary for transporting the water
from the Sabine River to Martin Lake.
Luminant shall maintain the Water Release Agreement executed on April 1, 2007
(“Water Release Agreement”) with SRA in connection with the untreated water
deliveries under this Contract, which separate agreement shall govern the terms and
conditions under which SRA will release water to Luminant from Lake Fork pursuant to
this Contract.
Agenda Date 02/22/2012 - page 2