R-2524-6-06RESOLUTION NO. 2524-6-06(R)
' A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, 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 CITY MANAGER OR DESIGNEE TO SIGN A CONTRACT
WITH CAPP FOR THE CITY OF ALLEN'S 2007 AND 2008 ELECTRICITY NEEDS;
AND COMMITTING TO BUDGET FOR ENERGY PURCHASES IN 2007 AND 2008
AND TO HONOR THE CITY OF ALLEN'S COMMITMENTS TO PURCHASE
POWER FOR ITS ELECTRICAL NEEDS IN 2007 AND 2008 THROUGH CAPP;
AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Allen, 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 tern 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 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 Allen 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 ALLEN,
COLLIN COUNTY, TEXAS, THAT:
' SECTION 1. 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 2. The City Manager, or designee, is hereby authorized to 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 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 Bunldey with the City Attorney's office in
Arlington and Geoffrey M. Gay, legal counsel to CAPP.
SECTION 5. This resolution shall become effective from and after its passage
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, ON THIS THE 13 T DAY OF JUNE, 2006.
APPROVED:
,Y;ia Z--C�
Stephen Terrell, Mayor
ATTEST:
, s�AR
Shelley B. Geo , TRMC, CITY TAR
Resolution No. 2524-6-06(R), Page 2