2007-037 RES-Endorsing certain Legislative Changes to enhande the competitive electric market supported by City's aggregation power project, Inc.

Home Browse Search

RESOLUTION N0. 2007-037 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS; ENDORSING CERTAIN LEGISLATIVE CHANGES TO ENHANCE THE COMPETITIVE ELECTRIC MARKET SUPPORTED BY CITIES AGGREGATION POWER PROJECT, INC. (LAPP); MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Paris, Texas, (City) has historically been active in the process of regulation of electric utilities; and, WHEREAS, the City is a member of Cities Aggregation Power Project, Inc. (CAPP) and, as such, made a decision to join with more than 95 other cities to switch its municipal electric accounts from its incumbent provider to a retail electric provider; and, WHEREAS, CAPP's experience with the deregulated market and contracts with several different retail electric providers has indicated that the Texas electric retail market has failed to develop into a truly competitive market as envisioned by the Texas Legislature in part because congestion zones within the ERCOT market have allowed certain market players to control enough generation capacity within a given zone to exercise market power to the detriment of customers and non-affiliated retail electric provides; and, WHEREAS, retail electric price competition has not successfully reached residential customers in Texas communities with populations less than 50,000; and, WHEREAS, Texas municipalities and customers currently pay generators prices for "baseload" electric energy needs that are inflated well beyond their actual costs because of the power is priced as if it were produced byhigh-priced natural gas-fueled plants even though it is actually produced at a much lower cost by lignite, coal, and nuclear plants; and, WHEREAS, power generators are receiving windfall profits and energy costs for Texas businesses and consumers are needlessly inflated because of a mechanism known as the "uniform-price auction," which pays every generator the highest price ERCOT is required to accept to meet demand regardless of what portion of the purchase required that price; and, WHEREAS, CAPP recognizes the importance of diversifying its energy portfolio and is investigating opportunities to add long term power contracts to ensure more price stability, but current provisions of the Local Government Code may make the contracting process unnecessarily cumbersome; and, WHEREAS, the City endorses efforts proposed by CAPP to modify the electric deregulation legislation to enhance competition, implement the original intent of SB 7 and reduce costs to the City and its residents; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS: Section 1. That the findings set out in the preamble to this resolution are hereby in all things approved.