16-A-1 CAPP Report - Laserfiche WebLink

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3. Time pressures will frustrate taking the final CAPP contract back to each city council for approval. The time pressures that are facing CAPP as it attempts to negotiate a contract are evidenced in the following: Completion of the power supply agreement will be contingent upon commitment of a specific load. General pricing should be known several weeks prior to the completion of a ready to sign contract. Specific city representatives can confirm the economic benefit to their cities assuming aggregation of spec'fflc accounts and be ready to commit a specific load as the contract is nearing completion. The Public Utility Commission has failed to enter final orders critical to certain elements of future electric pricing and even more critical to quantification of benefits of aggregation. The most important of these is the fuel price component of the price to beat. Orders defining that key pricing component will not be known until the first week of October, at the earliest. Commission delays in issuing orders that influence pricing increase uncertainty among potential providers. That uncertainty indicates to CAPP that it would be prudent to be flexible in timing the finalization of an agreement in order to capture the best possible price and to avoid being adversely impacted by a Commission Order after a contract is signed. Prudent management of this situation necessitates having a specific contact with each member city with whom CAPP can work to confirm economic benefit for each city as circumstances attributable to Commission action and contract negotiations change. Each retail electric provider or power supplier with whom an end-user deals in the deregulated market place will demand a written contract. From discussions with potential providers, CAPP anticipates that the most efficient mechanism will be for CAPP to negotiate one power supply agreement which will be referred to and adopted by the provider and each city, thus creating a contractual obligation between each city and the provider. Designation of the person who will sign the power supply contract on behalf of each city as soon as possible will enhance the efficiency of CAPP's efforts. CAPP recommends that each city designate the same person to both confirm economic benefit and to sign the contract, but a different individual may be designated for each of the two tasks (confirming economic benefit and signing the agreement on behalf of the city) if the City Council desires.