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CITIES AGGREGATION <br />POWER PROJECT, INC. <br /> <br />FREQUENTLY ASKED QUESTIONS <br /> <br />What is the Cities Aggregation Power <br />Project, Inc.? <br /> <br />CAPP is a non-profit political subdivision <br />corporation created to aggregate the <br />electricity purchased by participating <br />governmental entities in Texas. <br /> <br />What is the legal authority for CAPP? <br /> <br />The authority is found in Chapter 303 of the <br />Texas Local Government Code, as amended <br />by the electric deregulation legislation <br />enacted by the 1999 Texas Legislature. The <br />law provides that a political subdivision may <br />join with another political subdivision or <br />subdivisions to form a political subdivision <br />corporation (PSC). The PSC acts as an <br />agent to negotiate the purchase of electricity <br />for use in the public facilities of its <br />members. <br /> <br />How did CAPP originate? <br /> <br />In November 2000, the Texas Coalition of <br />Cities for Utility Issues (TCCFUI) and the <br />North Central Texas Council of <br />Governments (NCTCOG) sponsored a <br />meeting in Grapevine to discuss the role of <br />aggregation in a deregulated retail electric <br />environment. In cooperation with the <br />NCTCOG, the Steering Committee of TXU <br />Cities investigated the matter further and <br /> <br />formed a committee to draft proposed <br />articles of incorporation and by-laws for the <br />creation of a PSC to aggregate the ¢~ectric <br />loads of municipal facilities. The Steering <br />Committee approved the formation of <br />CAPP. <br /> <br />How is CAPP governed? <br /> <br />CAPP will be governed by a nine-person <br />board to be elected by member <br />cities/governmentai entities. <br /> <br />Who is eligible to join CAPP? <br /> <br />Any political subdivision that formally <br />approves the CAPP articles of incorporation <br />and bylaws, pays the initial fee, and <br />purchases electricity through CAPP can be a <br />member of CAPP. <br /> <br />Is there a cost of membership? <br /> <br />There is an initial charge of ¥2 of 1% of the <br />city's or entity's cost of electricity during <br />calendar year 2000. The initial charge is not <br />to exceed $14,000. The initial charge will <br />be credited against future administrative fees <br />that may be assessed after 2003. <br /> <br />Will there be future fees? <br /> <br /> <br />