HomeMy WebLinkAboutResolution No. 06-059
CITY OF THE COLONY
RESOLUTION NO.06- 0 ~
A RESOLUTION OF THE CITY OF THE COLONY, TEXAS,
AUTHORIZING THE CITIES AGGREGATION POWER PROJECT, INC.
TO NEGOTIATE AN ELECTRIC SUPPLY AGREEMENT FOR
DELIVERIES OF ELECTRICITY EFFECTIVE JANUARY 1, 2007;
AUTHORIZING CAPP TO ACT AS AN AGENT ON BEHALF OF THE
CITY TO ENTER INTO A CONTRACT FOR ELECTRICITY;
AUTHORIZING THE CHAIRMAN OF CAPP TO EXECUTE AN
ELECTRIC SUPPLY AGREEMENT FOR DELIVERIES OF
ELECTRICITY EFFECTIVE JANUARY 1, 2007; AND COMMITTING
TO BUDGET FOR ENERGY PURCHASES IN 2007 AND 2008 AND TO
HONOR THE CITY OF THE COLONY'S COMMITMENTS TO
PURCHASE POWER FOR ITS ELECTRICAL NEEDS IN 2007 AND 2008
THROUGH CAPPo
WHEREAS, the City of The Colony, Texas (City) is a member of Cities Aggregation
Power Project, Inc. (CAPP), a nonprofit political subdivision corporation
dedicated to securing electric power for its more than 86 members in the
competitive retail market; and
WHEREAS, CAPP negotiated favorable contract terms and a reasonable commodity
price for delivered electricity since 2002 resulting in significant savings
off of the Price to Beat (PTB) rate for its members; and
WHEREAS, the CAPP Board and CAPP consultants are continuing to investigate long
term contracting options, CAPP members must secure short term (2007
and 2008) power supplies or revert to high price standard contracts and
independently shop for a power contract; and
WHEREAS, experience gained by the CAPP Board indicates that entering into a
wholesale power contract, as distinct from a retail contract, effective
January 1, 2007 may provide for greatest potential savings for CAPP
members and facilitate an ultimate transition to fixed price long term
agreements; and
WHEREAS, potential wholesale power providers desire to execute a contract with one,
and only one, entity rather than have unique contracts for each CAPP
member; and
WHEREAS, CAPP believes that the pricing opportunity window for favorable 2007
deliveries under either a wholesale or retail agreement will be short-lived
(in the late spring - early summer time period) and that CAPP must be
able to commit contractually to prices within a 24-hour period in order to
lock-in favorable prices; and
WHEREAS, experiences in contracting for CAPP load since 2002 demonstrated that
Retail Electric Providers demand immediate response to an offer and may
penalize delay with higher prices; and
WHEREAS, CAPP's current delivered energy prices provide savings when measured
against the PTB rate, and aggregated rates contracted during favorable
pricing periods are likely to be lower than prices obtained by the City
contracting individually during the same time period; and
WHEREAS, wholesale suppliers demand assurance that CAPP will pay for all
contracted load; and
WHEREAS, the City of The Colony needs to assure CAPP that it will budget for
energy purchases in 2007 and 2008 and honor its commitments to
purchase power for its electrical needs in 2007 and 2008 through CAPPo
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF THE
COLONY, TEXAS:
Section 1:
That the CAPP Board and its consultants and advisors are agents authorized to negotiate
for the City's electricity needs as a member of CAPP and to evaluate wholesale power supply
contract options for 2007 as compared to a retail electric delivery contract for 2007 and, if
feasible, 2008.
Section 2:
That the Chairman of CAPP is hereby authorized to sign an electric power agreement for
the City pursuant to the contract approved and recommended by the CAPP Board of Directors
within 24 hours of said approval and recommendation.
Section 3:
That the City will budget and approve funds necessary to pay electricity costs
proportionate to the City's load under the supply agreement (whether wholesale or retail)
arranged by CAPP and signed by the Chairman of CAPP for the City.
Section 4:
That a copy of the resolution shall be sent to Mary Bunkley with the City Attorney's
office in Arlington and Geoffrey M. Gay, legal counsel to CAPP.
~NTED AND PASSED on this 19'" day of June, 2006, by a vote of _ 1ayes
and nays at a regular meeting of the City Council of the City of The Colony, Texas.
ATTEST:
~~. (;J~"y>
ris ie Wilson, City Secretary