2004-155-RES AUTHORIZING COP'S AGGREGATION POWER PROJECT (CAPP) TO NEGOTIATE AN ELECTRIC SUPPLY AGREEMENT

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RESOLUTION NO. 2004-155 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, AUTHORIZING THE CITIES AGGREGATION POWER PROJECT, INC. (CAPP) TO NEGOTIATE AN ELECTRIC SUPPLY AGREEMENT FOR DELIVERIES OF ELECTRICITY EFFECTIVE JANUARY 1,2005; AUTHORIZING THE MAYOR OR OTHER DESIGNATED CITY OFFICIAL TO SIGN A CONTRACT WITH CAPP FOR THE CITY OF PARIS' 2005 ELECTRICITY NEEDS; AND COMMITTING TO BUDGET FOR ENERGY PURCHASES IN 2005 AND TO HONOR THE CITY OF PARIS' COMMITMENTS TO PURCHASE POWER FOR ITS ELECTRICAL NEEDS IN 2005 THROUGH CAPP; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City of Paris, 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 a 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 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 CAPP can achieve on behalf of the City; and WHEREAS, wholesale suppliers demand assurance that CAPP will pay for all contracted load; and