HomeMy WebLinkAboutItem 10 - TCAP MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGER °
MEETING DATE: JUNE 19, 2012
SUBJECT: TCAP POWER PURCHASE 2014-2017
RECOMMENDATION:
City Council consider adopting a resolution authorizing the City Manager to enter into a
contract with Texas Coalition for Affordable Power (TCAP) to provide the City with
electric power for the years of 2014 through 2017 and take any necessary action.
FUNDING SOURCE:
Funds are programmed annually in each department's Operating Budget.
BACKGROUND:
The City entered into a contract with TCAP in October 2008 to provide power to the City
for the years of 2009 through 2013. The cost for this power ranged from $0.0698 per
kWh in 2009 to $0.0784 per kWh in 2013
TCAP recently took bids on June 10 to determine the market for power supply and
received a bid of $0.0492 per kWh. At this price we would experience an annual
savings for the four-year period of approximately $600,000. Our electric power budget
for the FY2013 budget year is in the neighborhood of$2.65 million. Thus, a reduction of
this magnitude would represent a significant savings to the City for each of the four
years.
TCAP will be soliciting new bids as of August 1 which will be our cost per kWh. These
prices are good for only one day. The adoption of the attached resolution authorizes the
City Manger to execute the contract on August 2.
Staff recommends approval.
0Aagenda12012107-17-121TCAP Contract Memo
July 12,2012 (9:59AM)
RESOLUTION NO.
A RESOLUTION OF THE CITY OF GRAPEVINE, TEXAS,
AUTHORIZING THE TEXAS COALITION FOR
AFFORDABLE POWER (TCAP) TO SEEK BIDS TO
COVER THE ELECTRIC POWER NEEDS OF THE CITY
FOR THE PERIOD JANUARY 1, 2014 - DECEMBER 31,
2017 AND TO NEGOTIATE AN EXTENSION OF THE
CITY'S POWER SUPPLY AND RETAIL ELECTRIC
PROVIDER CONTRACTS FOR THE SAME PERIOD;
AUTHORIZING THE MAYOR OR OTHER DESIGNATED
CITY OFFICIAL TO SIGN A CONTRACT WITH TCAP FOR
THE CITY'S ELECTRICITY NEEDS FOR THE PERIOD
EXTENDING UP TO DECEMBER 31, 2017; COMMITTING
TO BUDGET FOR ENERGY PURCHASES AND TO
HONOR THE CITY'S COMMITMENTS TO PURCHASE
POWER THROUGH TCAP FOR ITS ELECTRICAL NEEDS
THROUGH DECEMBER 31, 2017, IF CITY AGREES TO
ACCEPT THE CONTRACT OFFER AND PROVIDING AN
EFFECTIVE DATE
WHEREAS, the City of Grapevine, Texas (City) is a member of Texas Coalition
for Affordable Power (TCAP), a nonprofit political subdivision corporation dedicated to
securing electric power for its 162 political subdivision members in the competitive retail
market; and
WHEREAS, the City's current contract for power with Next Era as supplier and
Direct Energy Business Services (DEBS) as Retail Electric Provider (REP) arranged
through TCAP expires December 31, 2013; and
WHEREAS, the TCAP Board of Directors has authorized its consultants to seek
market-based bids for 14 members that did not agree to the 2011 blend and extend
opportunity to cover the period January 1, 2014 through December 31, 2017; and
WHEREAS, TCAP and its members must be able to commit contractually to
price offers within a 24-hour period in order to lock-in favorable prices; and
WHEREAS, experiences in contracting for TCAP load since 2002 have
demonstrated that providers demand immediate response to an offer and may penalize
delay with higher prices; and
WHEREAS, it is necessary for the City to designate a specific individual who can
sign .a power purchase agreement within 24 hours of receiving a proposal that
economically benefits the City; and
WHEREAS, suppliers demand assurance that TCAP will pay for all contracted
load; and
WHEREAS, the City must assure TCAP that it will budget for energy purchases
and honor its commitments to purchase power for its electrical needs through TCAP for
the period beginning January 1, 2014 and extending through December 31, 2017.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
Section 1. That the TCAP Board and its consultants and advisors are agents
authorized to solicit proposals and to negotiate for the City's electricity needs as a
member of TCAP and to offer the City an extension to the current supply agreement
through December 31, 2017.
Section 2. That the Mayor or other designated city official may execute a
contract for power supply and sign a Commercial Electricity Supply Agreement (CESA)
for the City's electricity needs and related, necessary services beginning January 1,
2014 and extending up to December 31, 2017, as a member of TCAP and the City
commits its load for the same period, provided that the energy price to be paid per kWh
in 2014-2017 results in savings over the current contract that expires December 31,
2013 and otherwise is satisfactory to the Mayor or other designated individual.
Section 3. That the City will budget and approve funds necessary to pay
electricity costs proportionate to the City's load under the supply agreement arranged by
TCAP, if a power supply agreement is signed by the City's designated individual for the
term January 1, 2014 through December 31, 2017.
Section 4. That a copy of this resolution shall be sent to Randy Moravec,
Executive Director, Texas Coalition for Affordable Power, 1323 Dunbarton Drive,
Richardson, Texas 75081 and Geoffrey M. Gay, legal counsel to TCAP, 816 Congress
Avenue, Suite 1900, Austin, Texas 78701.
Section 5. That this resolution shall take effect from and after the date of its
passage.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS on this the 17th day of July, 2012.
APPROVED:
RES. NO. 2
ATTEST
APPROVED AS TO FORM:
RES. NO. 3