HomeMy WebLinkAboutRES 2008-035 RESOLUTION NO. 2008-35
A RESOLUTION OF THE CITY OF GRAPEVINE, 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; AUTHORIZING CAPP TO
ACT AS AN AGENT ON BEHALF OF THE CITY TO ENTER
INTO A CONTRACT FOR ELECTRICITY; APPROVING
CAPP CONTRACTING WITH FPL ENERGY AND DIRECT
ENERGY AND AUTHORIZING THE CHAIRMAN OF CAPP
TO EXECUTE AN ELECTRIC SUPPLY AGREEMENT FOR
DELIVERIES OF ELECTRICITY EFFECTIVE JANUARY 1,
2009; COMMITTING TO BUDGET FOR ENERGY
PURCHASES AND TO HONOR THE CITY'S
COMMITMENTS TO PURCHASE POWER THROUGH
CAPP FOR ITS ELECTRICAL NEEDS BEGINNING
JANUARY 1, 2009 THROUGH DECEMBER 31, 2013 AND
PROVIDING AN EFFECTIVE DATE
WHEREAS, the City of Grapevine, Texas (City) is a member of Cities
Aggregation Power Project, Inc. (CAPP), a nonprofit political subdivision corporation
dedicated to securing electric power for its 111 political subdivision 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 needs to 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 GRAPEVINE, TEXAS:
Section 1. That the CAPP Board and its consultants and advisors are agents
authorized to negotiate for the City's electric power needs as a member of CAPP and to
contract for the electric power supply and related, necessary services for the City for a
term to begin January 1, 2009 and extending up to December 31, 2013.
Section 2. That 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. That the Chairman of CAPP is hereby authorized to sign a
Commercial Electric Service Agreement ("CESA") for the City pursuant to the contract
approved and recommended by the CAPP Board of Directors within 24 hours of said
approval and recommendation.
RES. NO. 2008-35 2
Section 4. 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
CAPP and the CESA signed by the Chairman of CAPP on behalf of the City for the term
beginning January 1, 2009 and extending up to December 31, 2013.
Section 5. That 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.
Section 6. 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 21st day of October, 2008.
APPROVED:
William D. Tate
Mayor
ATTEST:
7,44-e
Linda Huff
City Secretary
APPROVED AS TO FORM:
John F. Boyle, Jr.
City Attorney
RES. NO. 2008-35 3