Res 076-2006 6/6/2006 RESOLUTION NO. ' 1�`"�
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WICHITA
FALLS, TEXAS, AUTHORIZING THE CITIES AGGREGATION POWER
PROJECT, INC. TO NEGOTIATE AN ELECTRIC SUPPLY AGREEMENT
FOR DELIVERIES OF ELECTRICITY EFFECTIVE JANUARY 1, 2007;
AUTHORIZING CAPP TO ACT AS AN AGENT ON BEHALF OF THE
CITY TO ENTER INTO A CONTRACT FOR ELECTRICITY;
AUTHORIZING THE CHAIRMAN OF CAPP TO EXECUTE AN
ELECTRIC SUPPLY AGREEMENT FOR DELIVERIES OF ELECTRICITY
EFFECTIVE JANUARY 1, 2007; AND COMMITTING TO BUDGET FOR
ENERGY PURCHASES IN 2007 AND 2008 AND TO HONOR THE CITY
OF WICHITA FALLS' COMMITMENTS TO PURCHASE POWER FOR
ITS ELECTRICAL NEEDS IN 2007 AND 2008 THROUGH CAPP;
FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS
RESOLUTION WAS PASSED WAS OPEN TO THE PUBLIC AS
REQUIRED BY LAW.
WHEREAS, the City of Wichita Falls, 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 86 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
members; 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 PTB 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 Wichita Falls 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 WICHITA FALLS, TEXAS, THAT:
SECTION 1. The CAPP Board and its consultants and advisors are agents
authorized to negotiate for the City's electricity needs as a member of CAPP and to
evaluate wholesale power supply contract options for 2007 as compared to a retail
electric delivery contract for 2007 and, if feasible, 2008.
SECTION 2. The Chairman of CAPP is hereby authorized to sign an electric
power agreement for the City pursuant to the contract approved and recommended by
the CAPP Board of Directors within 24 hours of said approval and recommendation.
SECTION 3. 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 4. A copy of the resolution shall be sent to Mary Bunkley with the City
Attorney's office in Arlington and Geoffrey M. Gay, legal counsel to CAPP.
SECTION 5. It is hereby officially found and determined that the meeting at
which this resolution was passed was open to the public as required by law.
PASSED AND APPROVED this the 6 day of June, 2006.
MAYOR
ATTEST:
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