21-E CAPP Electric Supply AgrDRAFT
H:\ATTORNEY\JANICE\RESOLUTIONS\CURRENT\CAPP 2005\9-9-2004
RESOLUTION NO.
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, 2005;
AUTHORIZING THE MAYOR OR OTHER DESIGNATED CITY OFFICIAL TO
SIGN A CONTRACT WITH CAPP FOR THE CITY OF PARIS' 2005
ELECTRICITY NEEDS; AND COMMITTING TO BUDGET FOR ENERGY
PURCHASES IN 2005 AND TO HONOR THE CITY OF PARIS' COMMITMENTS
TO PURCHASE POWER FOR ITS ELECTRICAL NEEDS IN 2005 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 in 2002, 2003, and 2004 resulting in significant savings off of the Price to Beat (PTB) rate
for its members; and
WHEREAS, preliminary information providedto CAPP Board indicates that entering into a wholesale
power contract, as distinct from a retail contract, effective January 1, 2005, may provide the greatest potential
for savings for CAPP members over the regulated PTB rate; 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 2005 deliveries under
either a wholesale or retail agreement will be short-lived (in the September to mid-November 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 regardless of whether CAPP continues its historic practice of retail agreements or enters the wholesale
market; and
WHEREAS, experiences in contracting for 2002-2004 demonstrated that Retail Electric Providers
demand immediate response to an offer and may penalize delay with higher prices; and
WHEREAS, it is necessary for the City to contract for a supply of electricity for 2005 or at least
partially revert to PTB rates; and
WHEREAS, CAPP's current delivered energy prices provide savings when measured against the PTB
rate, and PTB rates will likely continue to remain higher than prices CAPP can achieve on behalf of the City;
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 2005
and honor its commitments to purchase power for its electrical needs in 2005 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 2005 as compared to a retail electric delivery contract for 2005 and, if
feasible, 2006.
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 2005 electric power agreement for the City's electricity needs
as a member of CAPP and commits its 20051oad 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.
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 CAPP.
Section 6. That this resolution shall be effective from and after its date of passage.
PASSED AND APPROVED this 9th day of September, 2004.
Curtis Fendley, Mayor
ATTEST:
Sherian Dixon, Assistant City Clerk
APPROVED AS TO FORM:
Larry W. Schenk, City Attorney