R-2784-10-08RESOLUTION NO. 2784-10-08(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 AND NECESSARY, RELATED SERVICES
EFFECTIVE JANUARY 1, 2009; APPROVING CAPP CONTRACTING WITH
FLORIDA POWER AND LIGHT (FPL) ENERGY AND DIRECT ENERGY AND
AUTHORIZING THE CITY MANAGER OR DESIGNEE TO SIGN A CONTRACT
WITH CAPP FOR THE CITY OF ALLEN'S ELECTRICITY NEEDS FOR THE
PERIOD BEGINNING JANUARY 1, 2009, AND EXTENDING UP TO DECEMBER
31, 2013; COMMITTING TO BUDGET FOR ENERGY PURCHASES AND TO
HONOR THE CITY OF ALLEN'S COMMITMENTS TO PURCHASE POWER
THROUGH CAPP FOR ITS ELECTRICAL NEEDS BEGINNING JANUARY 1, 2009,
AND EXTENDING UP TO DECEMBER 31, 2013; 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 1I1
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 for its members; and,
WHEREAS, the City's current contract for power expires December 31, 2008; and,
WHEREAS, CAPP members must secure power supplies for 2009 or revert to high price standard contracts
and independently shop for a power contract; and,
WHEREAS, the CAPP Board of Directors is currently considering indicative retail energy prices that point
to favorable pricing for the five year period ending December 31, 2013; and,
WHEREAS, 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 2009 deliveries will be short-
lived 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 providers demand
immediate response to an offer and may penalize delay with higher prices; and,
WHEREAS, 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, suppliers demand assurance that CAPP will pay for all contracted load; and,
WHEREAS, the City must assure CAPP that it will budget for energy purchases and honor its commitments
to purchase power for its electrical needs through CAPP for the period beginning January 1, 2009, and
extending through December 31, 2013; and,
WHEREAS, CAPP intends to continue to contract with both FPL Energy (power supply) and Direct Energy
(billing, administrative, and other customer services); and,
' WHEREAS, the current contractual relationships between CAPP and FPL Energy and Direct Energy have
been beneficial and cost effective for CAPP members and the City.
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 are agents authorized to negotiate for the
City's electricity needs as a member of CAPP for a term to begin January 1, 2009, and extending up to
December 31, 2013.
SECTION 2. The City approves CAPP contracting with FPL Energy and Direct Energy for the supply of
electric power and related, necessary services for the City for a term to begin January 1, 2009, and extending
up to December 31, 2013.
SECTION 3. The City will execute a contract with CAPP that permits the Chairman of CAPP to sign a
Commercial Electric Service Agreement ("CESA") for the City's electricity needs and related, necessary
services beginning January 1, 2009, and extending up to December 31, 2013, as a member of CAPP and
commits its load for the same period pursuant to the contract recommended and approved by the CAPP Board
of Directors.
SECTION 4. The City will budget and approve funds necessary to pay electricity costs proportionate to the
City's load under the supply agreement arranged by CAPP and signed by the Chairman of CAPP on behalf of
all CAPP members for the term beginning January 1, 2009, and extending up to December 31, 2013.
' SECTION S. A copy of the resolution shall be sent to Mary Bunkley with the City Attorney's office in
Arlington and Geoffrey M. Gay, legal counsel to CAPP.
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SECTION 6. 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 28r" DAY OF OCTOBER, 2008.
APPROVED:
,Z4�-ff-Le
StephenTerrell, Mayor
ATTEST:
Shelley B. Georke,TRMC, CITRSECRETARY
Resolution No. 2784-10-08(8) . Page 2