Res 121-2004 9/7/2004RESOLUTION NO. 121 -2004
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WICHITA
FALLS, TEXAS, AUTHORIZING THE CITIES AGGREGATION POWER
PROJECT, INC., ( "CAPP ") TO NEGOTIATE AN ELECTRIC SUPPLY
AGREEMENT FOR DELIVERIES OF ELECTRICITY EFFECTIVE
JANUARY 1, 2005; 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, 2005; AND COMMITTING TO
BUDGET FOR ENERGY PURCHASES IN 2005 AND TO HONOR THE
CITY OF WICHITA FALLS' COMMITMENTS TO PURCHASE POWER
FOR ITS ELECTRICAL NEEDS IN 2005 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 non - profit 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 provided to the 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 F'TB 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 Wichita Falls needs to assure CAPP that it will budget for
energy purchases in 2005 and honor its commitments to purchaser power for its
electrical needs in 2005 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 2005, as compared to a retail
electric delivery contract for 2005 and, if feasible, 2006.
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 this resolution shall be sent to Mary Bunkley with the City
Attorney's office in Arlington, and to 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 fts the 7" day of September, 2004.
ATTEST:
City Clerk