HomeMy Public PortalAboutResolution No. 211-04 08-24-2004 MODEL RESOLUTION B
• RESOLUTION N0.211-04
A RESOLUTION OF THE CITY OF RICHLAND HILLS, .TEXAS,
AUTHORIZING THE CITIES AGGREGATION POWER PROJECT, INC. TO
NEGOTIATE AN ELECTRIC SUPPLY AGREEMENT FOR DELIVERIES OF
ELECTRICITY EFFECTIVE JANUARY 1, 2005; AUTHORIZING THE
MAYOR OR OTHER DESIGNATED CITY OFFICIAL TO SIGN A
CONRACT WITH CAPP FOR THE CITY OF RICHLAND HILLS' S 2005
ELECTRICITY NEEDS; AND COMMITTING TO BUDGET FOR ENERGY
PURCHASES IN 2005 AND TO HONOR THE CITY OF RICHLAND HILLS' S
COMMITMENTS TO PURCHASE POWER FOR ITS ELECTRICAL NEEDS
IN 2005 THROUGH CAPP.
WHEREAS, the City of Richland Hills, 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 80 members in the
competitive retail market; and
WHEREAS, CAPP negotiated favorable contract terms and a reasonable commodity
price for delivered electricity in 2002, 2003, and 2004 resulting in
significant savings off of the Price to Beat (PTB) rate for its members; and
• WHEREAS, preliminary information provided to the CAPP Board indicates that
entering into a wholesale power contract, as distinct from a retail contract,
effective January 1, 2005, may provide the greatest potential for savings
for CAPP members over the regulated PTB rate; 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 2005
deliveries under either a wholesale or retail agreement will be short-lived
(in the September to mid-November 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 regazdless of whether CAPP continues its historic
practice of retail agreements or enters the wholesale market; and
WHEREAS, experiences in contracting for 2002-2004 demonstrated that Retail Electric
Providers demand immediate response to an offer and may penalize delay
with higher prices; and
WHEREAS, it is necessary for the City to contract for a supply of electricity for 2005
• or at least partially revert to PTB rates; and
• WHEREAS, CAPP's current delivered energy prices provide savings when measured
against the PTB rate, and PTB rates will likely continue to remain higher
than prices CAPP can achieve on behalf of the City; and
WHEREAS, wholesale suppliers demand assurance that CAPP will pay for all
contracted load; and
WHEREAS, the City of Richland Hills needs to assure CAPP that it will budget for
energy purchases in 2005 and honor its commitments to purchase power for
its electrical needs in 2005 through CAPP.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF RICHLAND
HILLS, TEXAS:
Section 1:
That the CAPP Board and its consultants and advisors will evaluate for the City
wholesale power supply contract options for 2005 as compared to a retail electric delivery
contract for 2005 and, if feasible, 2006.
Section 2:
• That the City will execute a contract with CAPP that permits the CAPP Board and its
consultants and advisors to negotiate and sign the 2005 electric power agreement for the City's
electricity needs as a member of CAPP and commits its 2005 load pursuant to the contract
recommended and approved by the CAPP Boazd of Directors.
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.
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.
PRESENTED AND PASSED on this 24th day of August, 2004, by a vote of 4 ayes and 0
nays at a regulaz meeting of the City Council of the City of Richland Hills, Texas.
• May r