HomeMy WebLinkAboutResolution 2006-044
RESOLUTION NO. 2006-044
APPROVAL OF CITIES AGGREGATION POWER PROJECT'S LETTER
OF INTENT TO ENTER INTO NEGOTIATIONS FOR A CAPACITY
CONTRACT WITH THE OWNER OF COAL (INCLUDING TEXAS
LIGNITE) GENERATION TO SUPPLY THE BASE LOAD ELECTRIC
POWER NEEDS (APPROXIMATELY 55%-60% OF TOTAL ENERGY
NEEDS) FOR CAPP MEMBERS OVER A 10-YEAR PERIOD
WHEREAS, the City of North Richland Hills ("City") is a member of Cities Aggregation
Power Project, Inc. ("CAPP") and said membership has resulted in
average annual energy savings over 20% off of the Public Utility
Commission ("PUC") approved price to beat; and
WHEREAS, all retail power bids from various Retail Electric Providers (REPs) in the
deregulated electric retail market have been directly linked to natural gas
futures prices; and
WHEREAS, natural gas prices have been extremely volatile and have caused
substantial increases in the price of electricity paid by the City; and
WHEREAS, CAPP is in the process of negotiating a 1 O-year capacity supply contract
for the city's base load electric needs (approximately 55% of the city's total
electric energy needs) for a fixed price that should provide considerable
economic benefit and greater price stability in comparison to traditional
energy contracts with REPs; and
WHEREAS, coal-fired capacity in Texas available to retail load is scarce and the
situation giving rise to the Letter of Intent reflects a unique opportunity for
CAPP members to increase savings and reduce electric price volatility.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND
HILLS, TEXAS THAT:
SECTION 1. The efforts of the CAPP Board to secure coal capacity for the City of
North Richland Hills' base load electric capacity needs for a fixed price for
a 1 O-year period commencing in the 4th quarter of 2007 are hereby
ratified.
SECTION 2. The City of North Richland Hills endorses the CAPP Board committing to
a letter of intent to contract for coal capacity with the understanding that:
(1) CAPP will provide proof of economic benefit of coal capacity and
energy from a coal and gas mix in comparison to exclusive reliance on
energy priced on 100% gas generation coupled with a conservative
forecast of natural gas prices; (2) the City of North Richland Hills will have
an opportunity to review and approve or reject a 1 O-year contractual
agreement to supply all the city's power needs; and (3) CAPP will issue
bonds to secure funding of amount necessary to prepay the capacity
portion of the coal supply contract.
PASSED AND APPROVED THIS 22ND OF MAY, 2006.
CITY O~ NORTH RICbH::ÄND HILLS:
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O~car Treviho, Mayor '
APPROVED AS TO CONTENT:
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Karen Bostic, Managing Director
Resolution No. 2006-044
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