R-2319-8-04RESOLUTION NO. 2319-8-04(R)
' A RESOLUTION OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS,
AUTHORIZING THE CITIES AGGREGATION POWER PROJECT, INC. TO
NEGOTIATE AN ELECTRIC SUPPLY AGREEMENT FOR DELIVERIES OF
ELECTRICITY EFFECTIVE JANUARY 1, 2005; AUTHORIZING THE CITY
MANAGER OR OTHER DESIGNATED CITY OFFICIAL TO SIGN A CONTRACT
WITH CAPP FOR THE CITY OF ALLEN'S 2005, OR 2005 AND 2006
ELECTRICITY NEEDS; AND COMMITTING TO BUDGET FOR ENERGY
PURCHASES IN 2005, OR 2005 AND 2006 AND TO HONOR THE CITY OF
ALLEN'S COMMITMENTS TO PURCHASE POWER FOR ITS ELECTRICAL
NEEDS IN 2005, OR 2005 AND 2006 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 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 I, 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 PTB 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 Allen needs to assure CAPP that it will budget for energy purchases in 2005 and
honor its commitments to purchase power for its electrical needs in 2005 through CAPP.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
TEXAS THAT:
I
SECTION 1. The CAPP Board and its consultants and advisors will evaluate for the City wholesale power
supply contract options for 2005 as compared to a retail electric delivery contract for 2005 and, if feasible,
2006.
SECTION 2. The City Manager or his designee will execute a contract with CAPP that permits the CAPP
Board and its consultants and advisors to negotiate and sign the 2005 electric power agreement for the City's
electricity needs as a member of CAPP and commits its 2005 load, or 2005 and 2006 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.
SECTION 4. A copy of the resolution shall be sent to Mary Barkley with the City Attorney's office in
Arlington and Geoffrey M. Gay, legal counsel to CAPP.
SECTION 5. 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 2e DAY OF AUGUST 2004.
APPROVED AS TO FORM:
Peter G. Smith, CITY ATTORNEY
APPROVED:
ATTEST:
Shelley B. Georg TRMC, CITY TARY
Resolution No. 2319-8-04(R), Page 2