2006-077-RES-aggregation power project.
RESOLUTION NO. 2006-077
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 1,2007; AUTHORIZING
THE MAYOR OR OTHER DESIGNATED CITY OFFICIAL TO SIGN A
CONTRACT WITH CAPP FOR THE CITY OF PARIS' 2007 AND 2008
ELECTRICITY NEEDS; AND COMMITTING TO BUDGET FOR ENERGY
PURCHASES IN 2007 AND 2008 AND TO HONOR THE CITY OF PARIS'
COMMITMENTS TO PURCHASE POWER FOR ITS ELECTRICAL NEEDS IN
2007 AND 2008 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 since 2002 resulting in significant savings off of the Price to Beat (PTB) rate for its
members; and,
WHEREAS, the CAPP Board and CAPP consultants are continuing to investigate long term
contracting options, CAPP members must secure short term (2007 and 2008) power supplies or revert to high
price standard contracts and independently shop for a power contract; and,
WHEREAS, experience gained by the CAPP Board indicates that entering into a wholesale power
contract, as distinct from a retail contract, effective January 1, 2007 may provide for greatest potential
savings for CAPP members and facilitate an ultimate transition to fixed price long term agreements; 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 2007 deliveries under
either a wholesale or retail agreement will be short-lived (in the late spring - early summer 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; and,
WHEREAS, experiences in contracting for CAPP load since 2002 demonstrated that Retail Electric
Providers demand immediate response to an offer and may penalize delay with higher prices; and,
WHEREAS, CAPP's current delivered energy prices provide savings when measured against the
PIB rate, and aggregated rates contracted during favorable pricing periods are likely to be lower than prices
obtained by the City contracting individually during the same time period; and,
WHEREAS, wholesale suppliers demand assurance that CAPP will pay for all contracted load; and,
WHEREAS, the City of Paris needs to assure CAPP that it will budget for energy purchases in 2007
and 2008 and honor its commitments to purchase power for its electrical needs in 2007 and 2008 through
CAPP; NOW THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS:
Section 1. That the findings set out in the preamble to this resolution are hereby in all things
approved.
Section 2. That the CAPP Board and its consultants and advisors will evaluate for the City
wholesale power supply contract options for 2007 and 2008 as compared to a retail electric delivery contract
for 2007 and, if feasible, 2008.
Section 3. That the City will execute a contract with CAPP that permits the CAPP Board and its
consultants and advisors to negotiate and sign the 2007 and 2008 electric power agreement for the City's
electricity needs as a member of CAPP and commits its 2007 and 2008 load pursuant to the contract
recommended and approved by the CAPP Board of Directors.
Section 4. That the City will budget and approve funds necessary to pay electricity costs
proportionate to the City's load under the supply agreement (whether wholesale or retail) arranged by CAPP
and signed by the Chairman of CAPP for the City.
Section 5. That a copy of this resolution shall be sent to Mary Bunkley with the City Attorney's
Office in Arlington and Geoffrey M. Gay, legal counsel to CAPPo
Section 6. That this resolution shall be effective from and after its date of passage.
PASSED AND APPROVED this 22nd day of May, 2006.
w~
, Mayor
ATTEST:
APPROVED AS TO FORM:
;-fl.~
D. Lestock, Assistant City Attorney