Res 044-2010 4/6/2010 RESOLUTION NO. 44-2010
Resolution Endorsing Certain Legislative Changes Relating To The
Sunset Review Of The Texas Public Utility Commission And The
Special Purpose Review Of The Electric Reliability Council Of Texas.
WHEREAS, the City of Wichita Falls ("City") is a member of Cities Aggregation
Power Project, Inc., ("CAPP"), a non-profit organization created by cities throughout
Texas to secure affordable energy for its members in the deregulated electric market;
and
WHEREAS, affordable and reliable power means economic development for our
cities and a better standard of living for our citizens; and
WHEREAS, by deregulating the retail electric market, Senate Bill 7 of 1999 ("SB
7") was intended to allow competitive forces to drive down the price of electricity; and
WHEREAS, CAPP's eight-year experience with the deregulated market,
including negotiating power contracts with several different retail electric providers,
indicates that the Texas electric retail market has failed to develop into a truly
competitive market as envisioned by the Texas Legislature; and
WHEREAS, competition has failed to develop in the deregulated electric market
because certain power generation companies own or control enough generation
capacity to exercise market power to the detriment of customers and non-affiliated retail
electric providers; and
WHEREAS, alleged market power abuse inquiries conducted by the Public Utility
Commission ("PUC") are hampered by the lack of adequate resources because the
parties hurt by the illegal activity, like cities, are not allowed to participate in the
investigations; and
WHEREAS, the managers at the Electric Reliability Council of Texas (ERCOT)
have failed to adequately manage expenses and operations. The most obvious
example is ERCOT's implementation of a nodal market - a project now four years
behind schedule and expected to cost at least eight times original estimates; and
WHEREAS, the Sunset Review Commission is expected to recommend
legislative reforms for the PUC and ERCOT; and
WHEREAS, the City supports all such legislative reforms that promote a truly
healthy electric market where competition can flourish and consumers can save money;
and
WHEREAS, the City endorses efforts proposed by CAPP that enhance electric
competition, implement the original intent of SB 7, and reduce costs to the City and its
residents.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
1. The City urges reforming the PUC and ERCOT in such a way as to enhance
competition in the deregulated market, to promote consumer protection and to
encourage the sale of affordable electricity. Specifically, the City urges the Texas
Legislature, as it considers changes recommended by the Sunset Advisory
Commission, to adopt reforms consistent with the following:
• All generators, regardless of size, should explicitly be barred from the
unlawful exercise of market power.
• Entities such as municipalities, commercial customers or retail electric
providers harmed by wholesale market abuse should be given explicit
standing to participate in market power abuse enforcement actions brought
by the PUC.
• Fines should be increased for market abuses in such a way that the PUC can
order full restitution to the market, market participants, or parties injured by
the violation.
• Activities defined as market abuse by the Federal Energy Regulatory
Commission should be prohibited.
• The statutory purpose of the PUC should be modified to require it to
harmonize its pursuit of competition with the protection of consumers of
electricity.
• As a condition of conducting business within Texas, competitive Retail
Electric Providers (REPs) should be required to include among their offers
one standard electricity package that has PUC-approved terms and
conditions.
• The number of consumer representatives on the ERCOT board should be
increased from the current three members, to six.
• The Office of the Comptroller should be assigned a seat on the board as well
as on appropriate budget oversight panels within ERCOT. The Comptroller's
office should be given access to all ERCOT contracting material and be
charged with conducting a bi-annual performance review of ERCOT.
• The PUC should be required to �re-approve all debt financing by ERCOT.
2. A copy of this resolution shall be sent to the elected lawmakers representing
the City's interests in the Texas House and Senate and to the legal counsel of CAPP.
PASSED AND APPROVED this the 6 day of April, 2010.
MAYOR
ATTEST:
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y Clerk