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WHEREAS, natural gas prices are extremely volatile, resulting in an upward cost trend and significant electric price instability; and WHEREAS, the City is a member of the non-profit political subdivision corporation Cities Aggregation Power Project, Inc. ("CAPP"), which has the legal authority to contract for the purchase of electricity on behalf of more than 100 political subdivision members; and WHEREAS, CAPP has endeavored to provide its members with the most favorable energy pricing available in the market, delivering more than $100 million in savings for its members since 2002; and WHEREAS, the CAPP Board of Directors is a voluntary ten-member board comprised entirely of city employees and city officials that directs the activities of CAPP's legal and energy advisors; and WHEREAS, the CAPP Board of' Directors has investigated potential long-term contracting options to both lower and stabilize electric prices for member political subdivisions that must prepare annual budgets and require cost predictability for essential services like electricity; and WHEREAS, CAPP negotiated a Purchase Power Agreement ("PPA") with owners of non-gas fired generation for the long-term, fixed price supply of power, which will allow participating CAPP members ta meet a portion of energy needs (approximately 60 percent) at a stable, known price for a 24-year period; and WHEREAS, the PPA calls for CAPP to contract with Luminant Generation Company LLC, Big Brown Power Company, LLC and Oak Grove Management Company, LLC (collectively, "Luminant") for approximately 150 MW of baseload power supplied by seven different units over 24 years and pre-paying a portion of the capacity costs associated with power purchased pursuant to the long-term contract; and WHEREAS, the City wishes to acquire a portion of its future electric energy pursuant to the PPA between CAPP and Luminant; and WHEREAS, to acquire power pursuant to the PPA, the City must enter into an electric power contract, the Energy Sales Contract Between CAPP and the City of Paris (the "Member Contract"), substantially in the form attached hereto; and WHEREAS, CAPP will issue general revenue bonds, with the bond proceeds used to pre-pay a portion of the 24-year capacity commitment pursuant to the PPA on behalf of the City and all participating CAPP members; and WHEREAS, bonds issued by CAPP will be backed by the individual Member Contracts of each participating CAPP city committing to pay a capacity payment equal to its proportionate amount of the debt service obligation associated with CAPP's prepayment of PPA capacity costs; and 2 . 0 0 U0 0 5