HomeMy WebLinkAboutR-2802-2-09RESOLUTION NO. 2802-2-09(R)
' A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, ENDORSING CERTAIN LEGISLATIVE CHANGES TO
ENHANCE THE COMPETITIVE ELECTRIC MARKET SUPPORTED BY THE
CITIES AGGREGATION POWER PROJECT, INC. (CAPP); AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City of Allen is a member of Cities Aggregation Power Project, Inc. ("LAPP"), 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") intended to allow
competitive forces to drive down the price of electricity; and,
WHEREAS, CAPP's seven-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 that prices are
higher, not lower, after deregulation; 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, residential customers in Texas communities are unable to obtain lower power prices that may
be available to them through bulk purchasing because current law makes the creation of citizen aggregation
groups unworkable; and,
WHEREAS, the Electric Reliability Council of Texas ("ERCOT") is expected to spend at least $660
million to implement a nodal market in Texas, an unproven market design program that is several years
behind schedule and several hundred million dollars over budget; and,
WHEREAS, the City supports all legislative initiatives 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 to modify the electric deregulation legislation to
enhance 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 ALLEN,
COLLIN COUNTY, TEXAS, THAT:
' SECTION 1. The City supports the introduction and adoption of legislation in the 81" Session of the Texas
State Legislature that promotes affordable power and the transition of the Texas electric market from a
deregulated market to a fully competitive one. Specifically, the City supports legislation that will address the
following issues:
• All generators, regardless of size, should explicitly be barred from the unlawful exercise of
' market power.
• Ownership and control of generation capacity should be limited to no more than twenty percent
(20%) of total generation capacity within the market in order to enhance competition and mitigate
market power and the ability of any one generator to affect prices. This is in accordance with
basic anti-trust principles and as originally designed in SB 7, although the "market" should be
redefined as the functional market (an ERCOT zone) to reflect real-world conditions. In the
alternative, the PUC should be directed to create a single ERCOT-wide market with uniform
congestion pricing.
• 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.
• Cities should be permitted to create citizen aggregation groups to combine the power needs of
residents that have not specifically asked to be excluded in order to facilitate bulk power
purchasing and enhance the opportunities for residential customers to benefit from deregulation
and benefit the entire state by increasing competition. Citizens who have signed a contract with a
retail provider would be excluded, as would those citizens who otherwise opt out.
• All efforts to transition to a nodal market in ERCOT should be abandoned and other market
design options that benefit all market participants should be considered.
' SECTION 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 Chairman and Legal Counsel of the Cities Aggregation
Power Project.
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SECTION 3. This Resolution shall take effect immediately upon its passage.
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS ON THIS THE 10TH DAY OF FEBRUARY, 2009.
APPROVED:
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Stephen T rell, MAYOR
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Shelley B. GeoW, CITY SECRET
Resolution No. 2802-2-09(R), Page 2