HomeMy Public PortalAboutResolution No. 267-06 05-23-2006 • RESOLUTION N0.267-06
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, 2007;
AUTHORIZING THE MAYOR OR OTHER DESIGNATED CITY
OFFICIAL TO SIGN A CONTRACT WITH CAPP FOR THE CITY OF
RICHLAND HILLS' 2007 AND 2008 ELECTRICITY NEEDS; AND
COMMITTING TO BUDGET FOR ENERGY PURCHASES IN 2007 AND
2008 AND TO HONOR THE CITY OF RICHLAND HILLS'
COMMITMENTS TO PURCHASE POWER FOR ITS ELECTRICAL
NEEDS IN 2007 AND 2008 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 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, LAPP 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
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• 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 LAPP 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 2007 and 2008 and honor its commitments to purchase power for its
electrical needs in 2007 and 2008 through LAPP.
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 2007 and 2008 as compared to a retail electric
delivery contract for 2007 and, if feasible, 2008.
Section 2
• That the City will execute a contract with LAPP that permits the LAPP Board and its
consultants and advisors to negotiate and sign the 2007 and 2008 electric power agreement for
the City's electricity needs as a member of CAPP and commits its 2007 and 2008 load pursuant
to the contract recommended and approved by the CAPP Board 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 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.
•
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• PRESENTED AND PASSED on this 23RD da of Ma 2006 b a vate of a es
Y Y ~ Y ~ Y
and nays at a regular meeting of the City Council of the City of Richland Hills, Texas.
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v ~ x _ id L. Ragan, Mayor
ATTEST:
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K' Sutter, City Secretary
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