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The board of directors will establish <br />administrative fees and aggregation fees. <br />The aggregation fee is to be charged on a <br />per kilowatt-hour basis and should be <br />included within the price of electricity. <br /> <br />How is board selection and voting set up? <br />The first board of directors will be elected <br />by the members with each member having <br />one vote. Board selection by members after <br />2003 will be based upon each city's <br />proportionate share of the total aggregated <br />load. <br /> <br />When will the electric market be <br />deregulated? <br /> <br />The retail electric market is scheduled to be <br />deregulated effective January 1, 2002. <br /> <br />What is the "price to beat"? <br /> <br />Under the new law, residential and small <br />commercial customers who decide to stay <br />with the affiliated retail electric provider of <br />the incumbent utility should have some price <br />protection ~and relative price stability <br />(exclusive of fuel costs) for not more than <br />five years under the "price to beat" <br />provisions. However, the electric loads of <br />large industrial customers, municipalities, <br />and other political subdivisions may not <br />generally be entitled to "price to beat" <br />protection after December 31, 2001. <br />Municipalities and other political sub- <br />divisions will need to protect their budgets <br />by becoming knowledgeable of power <br />markets and their own electric load since <br />some electric accounts will be entitled to <br />"price to beat" protection and others will <br />not. One of the goals of CAPP is to educate <br />its members on these matters. <br /> <br />Which accounts fall within the "price to <br />beat" definition? <br /> <br />The current draft of the Public Utility <br />Commission's price to beat mle permits price <br />to beat protection for non-residential load that <br />has a peak demand less than 1,000 kilowatts. <br />The price to beat is a retail rate with limited <br />protection for a duration not to exceed five <br />years. That protection could disappear much <br />sooner if an incumbent electric company can <br />demonstrate the loss of 40% of its load. A <br />goal of an aggregation project is not simply to <br />negotiate a lower retail rate than might <br />otherwise be available, but to negotiate the <br />purchase of bulk power in the wholesale <br />market. Given that the price to beat will be <br />adjusted for increases in fuel costs, it is <br />possible that an aggregation project could <br />provide electricity cheaper than that ai~ilable <br />under the price to beat. One of the goals of <br />CAPP is to minimize the average price paid <br />for the total load in each city whether that <br />means preserving price to beat protection for <br />select accounts or including all accounts in an <br />aggregation project. <br /> <br />Is it safe to rely upon the price to beat <br />protection? <br /> <br />You should probably not rely upon price to <br />beat protection unless most of your electric <br />accounts were served under commercial <br />tariffs and you arc confident that analysis of <br />demand data will reflect that peak demand is <br />less than 1000 kilowatts. It is also important <br />that you are confident that wholesale power <br />prices will exceed the price to beat adjusted <br />for rising gas prices. <br /> <br />What are the benefits of aggregation? <br /> <br />Aggregation makes it possible for cities and <br />other governmental units to enter the <br />marketplace with greater clout. Combined <br />buying power is expected to lead to price <br />breaks and allow for bulk purchases in the <br />cheaper, wholesale electric market. <br /> <br />Does CAPP have a strategic plan? <br /> <br />(2) <br /> <br /> <br />