10-Move to approve a resolution that supports CAPP"s legislative position during the sunset review process for the PUC and ERCOT

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STAFF REPORT REGARDING THE RESOLUTION ENDORSI11iG CAPP'S 2010 SUNSET ADVOCACY PURPOSE The City of Paris, Texas is a member of Cities Aggregation Power Proj The CAPP Board of Directors has voted to authorize certain legislative efforts Sunset Commission's review of the Public Utility Commission ("PUC") and the Council of Texas ("ERCOT"). The Sunset agency's recommendations pe organizations are expected to form the basis of bills during the 82nd Legislative S such, CAPP will recommend legislative action related to the Sunset Commissiol both the PUC and ERCOT. In addition, CAPP will offer all resolutions of its meml hearings to apprise lawmakers of CAPP Cities' perspective on how to make tl more competitive and beneficial to consumers. DISCUSSION In 1999, Texas lawmakers adopted Senate Bill 7, the state's electric d legislation expanded competition in the wholesale electricity market and competition among electric retailers. Proponents of the legislation promised 1 i ("CAPP"). ~ng to the eliability to both 12011. As -nation of Ing Sunset lic market P 's latio law. The ed t door to elect ic prices. Unfortunately, the reality has been otherwise. Although Texans paid e ectric ices well below the national average during the decade before Senate Bill 7 was pas ed, cu omers in deregulated parts of the state now pay prices above the national average. In fa t, even e lowest residential electric rates in deregulated areas of Texas typically exceed rates p id by al residents of neighboring states, such as those in Oklahoma and Louisiana. CAPP believes that for deregulation to fulfill its promise, the market iryr, ust bec me more competitive. Problems include the ability of some generators to exercise mono oly-like ontrol in large swaths of the state, and the inability of many consumers to make inform d choic because of confusion in the retail electricity market. Efforts to address market design iss es by E COT also have been mismanaged, gone over budget and fallen behind schedule. As an active market participant, CAPP is in the unique position to ide have developed in the deregulated marketplace and to provide a consum legislators interested in fixing those problems. Based upon this point of view, CAPP has formulated recommendatil Review Commission as it conducts its PUC and ERCOT reviews. CAPP's reo intended to improve competition in the electric market place by making the PU accountable to consumers, by limiting market power, and by creating competi customers. CAPP's recommendations reflect the organization's desire for a tri market where consumers can save and competition can flourish. Such a m~ power remains affordable and reliable will mean more economic developme and a better standard of living for our citizens. :ify pro lems that "s pers ective to is for e Sunset mmend tions are and E OT more ive opti ns for all y healt y electric ket e where t for T as cities, 79