HomeMy WebLinkAboutResolution No. 08-26 Authorizing CAPP to Negotiate a Contract for City's Electricity NeedsRESOLUTION NO.
08-26
A RESOLUTION OF THE CITY OF UNIVERSITY PARK, TEXAS,
AUTHORIZING THE CITIES AGGREGATION POWER PROJECT, INC.
(CAPP) TO NEGOTIATE AN ELECTRIC SUPPLY AGREEMENT FOR
DELIVERIES OF ELECTRICITY AND NECESSARY, RELATED SERVICES
EFFECTIVE JANUARY 1, 2009; AUTHORIZING CAPP TO ACT AS AN
AGENT ON BEHALF OF THE CITY TO ENTER INTO A CONTRACT FOR
ELECTRICITY; APPROVING CAPP CONTRACTING WITH FPL ENERGY
AND DIRECT ENERGY AND AUTHORIZING THE CHAIRMAN OF CAPP
TO EXECUTE AN ELECTRIC SUPPLY AGREEMENT FOR DELIVERIES OF
ELECTRICITY EFFECTNE JANUARY 1, 2009; COMMITTING TO
BUDGET FOR ENERGY PURCHASES AND TO HONOR THE CITY'S
COMMITMENTS TO PURCHASE POWER THROUGH CAPP FOR ITS
ELECTRICAL NEEDS BEGINNING JANUARY 1, 2009 THROUGH
DECEMBER 31, 2013.
WHEREAS, the City of University Park, Texas (City) is a member of Cities Aggregation
Power Project, Inc. (CAPP), a nonprofit political subdivision corporation
~ dedicated to securing electric power for its 111 political subdivision 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 for its members;
and
WHEREAS, the City's current contract for power expires December 31, 2008; and
WHEREAS, CAPP members must secure power supplies for 2009 or revert to high price
standard contracts and independently shop for a power contract; and
WHEREAS, the CAPP Board of Directors is currently considering indicative retail energy
prices that point to favorable pricing for the five year period ending December
31, 2013; and
WHEREAS, 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 2009 deliveries
will be short-lived 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 providers
demand immediate response to an offer and may penalize delay with higher
prices; and
WHEREAS, 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, suppliers demand assurance that CAPP will pay for all contracted load; and
WHEREAS, the City needs to assure CAPP that it will budget for energy purchases and honor
its commitments to purchase power for its electrical needs through CAPP for the
period beginning January l, 2009, and extending through December 31, 2013;
and
WHEREAS, CAPP intends to continue to contract with both FPL Energy (power supply) and
Direct Energy (billing, administrative and other customer services); and
WHEREAS, the current contractual relationships between CAPP and FPL Energy and Direct
Energy have been beneficial and cost effective for CAPP members and the City.
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
UNIVERSITY PARK, TEXAS:
Section 1:
That the CAPP Board and its consultants and advisors are agents authorized to negotiate
for the City's electric power needs as a member of CAPP and to contract for the electric power
supply and related, necessary services for the City for a term to begin January l, 2009 and
extending up to December 31, 2013.
Section 2:
That the City approves CAPP contracting with FPL Energy and Direct Energy for the
supply of electric power and related, necessary services for the City for a term to begin January
1, 2009 and extending up to December 31, 2013.
Section 3:
That the Chairman of CAPP is hereby authorized to sign a Commercial Electric Service
Agreement ("CESA") 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 4:
That the City will budget and approve funds necessary to pay electricity costs
proportionate to the City's load under the supply agreement arranged by CAPP and the CESA
signed by the Chairman of CAPP on behalf of the City for the term beginning January 1, 2009
and extending up to December 31, 2013.
Section 5:
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 21 st day of October, 2008, by a vote of r'J
ayes and 0 nays at a regular meeting of the City Council of the City of University Park,
Texas.
AMES H. H L ES, III
AYOR
ATTEST:
BRANDY VO
ACTING CIT SECRE ARY