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RESOLUTION NO. A ~ _ ` ~ ~ ' __.
RESOLUTION NO. 182
A RESOLUTION OF THE CITY OF KENNEDALE, TEXAS, AUTHORIZING
THE CITIES AGGREGATION POWER PROJECT, INC. TO NEGOTIATE AN
ELECTRIC SUPPLY AGREEMENT FOR DELIVERIES OF ELECTRICITY
EFFECTIVE JANUARY 1, 2005; AUTHORIZING CAPP TO ACT AS AN
AGENT ON BEI-iALF OF THE CITY TO ENTER INTO A CONTRACT FOR
ELECTRICITY; AUTHORIZING THE CHAIRMAN OF LAPP TO EXECUTE
AN ELECTRIC SUPPLY AGREEMENT FOR DELIVERIES OF
ELECTRICITY EFFECTIVE JANUARY 1, 2005; AND COMMITTING TO
BUDGET FOR ENERGY PURCHASES IN 2005 AND TO HONOR THE CITY
OF KENNEDALE'S COMMITMENTS TO PURCHASE POWER FOR ITS
ELECTRICAL NEEDS IN 2005 THROUGH CAPP.
WHEREAS, the City of Kennedale, Texas 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 1, 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 Kennedale 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.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KENNEDALE, TEXAS:
Section 1:
That the CAPP Board and its consultants and advisors are agents authorized to negotiate
for the City's electricity needs as a member of CAPP and to evaluate wholesale power supply
contract options for 2005 as compared to a retail electric delivery contract for 2005 and, if
feasible, 2006.
Section 2:
That the Chairman of CAPP is hereby authorized to sign an electric power agreement for
the City pursuant to the contract approved and recommended by the CAPP Board of Directors
within 24 hours of said approval and recommendation.
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 (whether wholesale or retail)
arranged by CAPP and signed by the Chairman of LAPP for the City.
Section 4:
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.
PRESENTED AND PASSED on this 28`'' day of September 2004, by a vote of 3 ayes
and 0 nays at a special meeting of the City Council of the City of Kennedale, Texas.
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