R-2898-3-10RESOLUTION NO. 2898-3-10(R)
' A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, 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; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Allen 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 the original estimate; 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 ALLEN,
COLLIN COUNTY, TEXAS, THAT:
SECTION 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 (FERC)
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 the 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 terns 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 head 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 pre -approve all debt financing by ERCOT
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.
SECTION 3. This Resolution shall take effect immediately upon its passage.
DULY PASSED AND APPROVED BY TIE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS ON THIS THE 23 RD DAY OF MARCH, 2010.
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Shelley B. Georg ITY�RY
Resolution No. 2898-3-10(R), Page 2