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HomeMy WebLinkAboutResolution No. 06-09 CAPP RESOLUTION NO. 06-09 A RESOLUTION OF THE CITY OF UNIVERSITY PARK, 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 UNIVERSITY PARK'S COMMITMENTS TO PURCHASE POWER FOR ITS ELECTRICAL NEEDS IN 2007 AND 2008 THROUGH CAPPo 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 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 University Park 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 CAPP. 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 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 ofCAPP 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 CAPPo PRESENTED AND PASSED on this 6th day of June, 2006, by a vote of 5 ayes and 0 nays at a regular meeting of the City Council of the City of University Park, Texas. ATTEST: