HomeMy WebLinkAboutRES 2009-010 RESOLUTION NO. 2009-10
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS, ENDORSING CERTAIN
LEGISLATIVE CHANGES TO ENHANCE THE
COMPETITIVE ELECTRIC MARKET SUPPORTED BY
CITIES AGGREGATION POWER PROJECT, INC. AND
PROVINDING AN EFFECTIVE DATE
WHEREAS, the City 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") 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 GRAPEVINE, TEXAS:
Section 1. That the City supports the introduction and adoption of legislation in
the 81st 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. That a copy of the 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 CAPP.
Section 3. That this resolution shall take effect from and after the date of its
passage.
RES. NO. 2009-10 2
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS on this 24th day of March, 2009.
APPROVED:
William D. Tate
Mayor
ATTEST:
Linda Huff
City Secretary
APPROVED AS TO FORM:
Doug . Conn-r, I I I
Assistant City Attorney
RES. NO. 2009-13 3