HomeMy WebLinkAboutResolution 2006-040
RESOLUTION NO. 2006-040
A RESOLUTION OF THE CITY OF NORTH RICHLAND HILLS,
TEXAS AUTHORIZING THE CITIES AGGREGATION POWER
PROJECT, INC. (CAPP) TO NEGOTIATE AN ELECTRIC SUPPLY
AGREEMENT FOR DELIVERIES OF ELECTRICITY EFFECTIVE
JANUARY 1, 2007; AUTHORIZING THE CITY MANAGER TO
SIGN A CONTRACT WITH CAPP FOR THE CITY OF NORTH
RICHLAND HILLS' 2007 AND 2008 ELECTRICITY NEEDS; AND
COMMITTING TO BUDGET FOR ENERGY PURCHASES IN 2007
AND 2008 AND TO HONOR THE CITY OF NORTH RICHLAND
HILLS' COMMITMENTS TO PURCHASE POWER FOR ITS
ELECTRICAL NEEDS IN 2007 AND 2008 THROUGH CAPPo
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 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 North 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 CAPPo
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICH LAND
HILLS, TEXAS THAT:
SECTION 1 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 The City will execute a contract with CAPP that permits the CAPP 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 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 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 AND APPROVED THIS 1ih DAY OF JUNE, 2006.
Oscar Trevino, Mayor
Resolution No. 2006-040
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APP 0 E AS TO FORM AND LEGALITY:
APPROVED AS TO CONTENT:
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Karen Bostic, Managing Director
Resolution No. 2006-040
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