HomeMy WebLinkAboutResolution 2004-065
RESOLUTION NO. 2004-065
A RESOLUTION OF THE CITY OF NORTH 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 CITY MANAGER OR HIS
DESIGNEE TO EXECUTE A CONTRACT WITH CAPP FOR THE
CITY OF NORTH RICHLAND HILLS' 2005 ELECTRICTY NEEDS;
AND COMMITTING TO BUDGET FOR ENERGY PURCHASES IN
2005 AND TO HONOR THE CITY OF NORTH RICHLAND HILLS'
COMMITMENTS TO PURCHASE POWER FOR ITS ELECTRICAL
NEEDS IN 2005 THROUGH CAPP,
WHEREAS, the City of North 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 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 regardless 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 CÀPP can achieve on behalf of the City; and
WHEREAS, wholesale suppliers demand assurance that CAPP will pay
for all contracted load; and
WEHREAS, the City of North 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 CAPPo
THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF NORTH RICH LAND HILLS, TEXAS:
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.
2. That the City Manager or his designee is hereby authorized to sign an
electric power agreement pursuant to the contract approved and recommended
by the CAPP Board of Directors.
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 CAPPo
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
PASSED this 2ih day of September, 2004 by the City Council of the City
of North Richland Hills, Texas.
"""'~C~III""
~""~~.....,...."..,. ~"~
~ ··-n ... ~
.~ .. .. .,..
} ... ...~~
'~{ r Y-l~
"r' Ie!.':-
~~. h :'S:F
~ v··... ..... ~;::
~/IA TrEj'r<' "",...
"'11 ,\\"
II'III'I'!""."
ø~;Ud,,~
Patricia Hutson, City Secretary
APPROVED AS TO FORM:
,