City Council Meeting Agendas and Minutes

SPECIAL WORK SESSION OF AUGUST 21, 2017 The City of Kings Mountain, North Carolina met in a Special Work Session at 5:30 p.m. on Monday, August 21, 2017 in the Conference Room at Public Works with Mayor Scott Neisler presiding. ATTENDANCE The following Councilmembers were present: Howard Shipp, Curtis Pressley, Rodney Gordon, Jay Rhodes, Keith Miller, Tommy Hawkins and Mike Butler. Also present: Marilyn Sellers, City Manager; Mickey Corry, City Attorney and Lynda Mattox, City Clerk. INVOCATION The invocation was given by Mayor Neisler. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by Mayor Neisler. WORK SESSION Mayor Scott Neisler asked that Item #7, Moss Lake Pipe Abandonment/Contract for Completion of Project be removed from the Agenda for further consideration. City Manager, Marilyn Sellers, stated that all these items will be on the Agenda for a vote at the Regular Session this month and thanked Nick for all his hard work in preparing for this work session. Natural Gas Re-Delivery Agreement between the City of Kings Mountain and NTE Carolinas LLC Assistant City Manager/Energy Services Director, Nick Hendricks reviewed with Council the background of the gas delivery to NTE. He stated that in the beginning, NTE was planning to tap directly to the Transco Pipeline. Due to passed legislation, the NCUC had to disallow NTE a direct tap and required Kings Mountain to own a portion of the delivery pipeline. Kings Mountain became the link between Transco and NTE. Kings Mountain has never been in the transmission business of natural gas which thus required a new set of procedures and additional cost associated with those procedures. Kings Mountain did not have a transmission rate and tariff, therefore the need for a re- delivery agreement was established. Minutes – August 21, 2017 Page 2 The Agreement overview is as follows: • Agreement term of 20 years commencing August, 2017 and ending December, 2038 • The City will construct an 18-foot pipeline segment and take ownership of a 10- foot segment and appurtenant facilities that are being constructed by NTE • NTE will pay the City costs incurred to construct the facilities, approximately $143,000 • The City will receive up to 90,000 Dth/day of natural gas at Transco’s meter station and redeliver such gas to NTE’s generating facility • NTE will pay the City $23,000 per month for the firm redelivery service beginning September, 2017, plus the costs of emergency response equipment and any additional costs the City incurs • The City will not be obligated to provide any balancing services with respect to the gas it receives and redelivers to NTE. The City will not own the gas being transported through its facilities • NTE is responsible for the quality of the natural gas delivered into the City’s facilities and must abide by quality specifications in Transco’s FERC Gas Tariff • The City will redeliver gas to NTE at the pressure it receives from Transco, minus pressure decreases caused by the operation of its facilities • The parties will indemnify each other from harm caused by either party’s negligence or willful misconduct but only to the extent such indemnification is permitted by law. Damages caused from an event of force majeure are excluded from the indemnification obligation • Each party is obligated to carry insurance at a policy limit stated in the agreement Transcontinental Gas Pipeline Service Agreement Amendments Mr. Hendricks stated that four contract amendments will be placed on the August Regular Session Agenda. He stated that Williams/Transco is eliminating Natural Gas Wells that are no longer producing, or are dried up, from our Firm Transportation Contracts. There are four amended contracts they have provided and are basically generic and just formality. They are requesting our signatures. Natural Gas Flow Valve changes per Federal Regulations Mr. Hendricks reviewed with Council the natural gas flow valve changes per Federal Regulations. He stated that beginning April 14, 2017 each natural gas operator per CFR 192.381, must install an EFV on any new or replaced service lines serving certain types of services prior to line activation. Additionally, the code requires a customer’s right to request an EFV which is based upon certain criteria. Below are the steps required to be compliant: Minutes – August 21, 2017 Page 3 • A letter will be sent out in the monthly billing statements outlining the customer’s rights of request • A Public Notice will be placed in the Kings Mountain Herald • Council will need to approve two items during the August Regular Session o Approval of Public Notice o Approval of the cost mechanism which is based upon the actual cost of installment only ADJOURNMENT Upon Motion by Councilmember Jay Rhodes, seconded by Councilmember Howard Shipp, it was unanimously voted to adjourn at 7:00 pm. BY:____________________________________________ G. Scott Neisler, Mayor ATTEST: _____________________________________________ Lynda G. Mattox, City Clerk