HomeMy WebLinkAbout05-1213 11-22-2005RESOLUTION NO. 05-1213
APPROVAL OF CITIES AGGREGATION POWER
PROJECT'S LETTER OF INTENT TO ENTER INTO
NEGOTIATIONS FOR A CAPACITY CONTRACT WITH
THE OWNER OF COAL (INCLUDING TEXAS LIGNITE)
GENERATION TO SUPPLY THE BASE LOAD ELECTRIC
POWER NEEDS (APPROXIMATELY 55% - 60% OF
TOTAL ENERGY NEEDS) FOR CAPP MEMBERS OVER A
10 -YEAR PERIOD
WHEREAS, the City of Euless, Texas, ( "City ") is a member of Cities Aggregation
Power Project, Inc. ( "CAPP ") and said membership has resulted in average annual
energy savings over 20% off of the Public Utility Commission ( "PUC ") approved price to
beat; and
WHEREAS, all retail power bids from various Retail Electric Providers (REPs) in
the deregulated electric retail market have been directly linked to natural gas futures
prices; and
WHEREAS, natural gas prices have been extremely volatile and have caused
substantial increases in the price of electricity paid by the City; and
WHEREAS, CAPP is in the process of negotiating a 10 -year capacity supply
contract for the city's base load electric needs (approximately 55% of the city's total
electric energy needs) for a fixed price that should provide considerable economic
benefit and greater price stability in comparison to traditional energy contracts with
REPs; and
WHEREAS, coal -fired capacity in Texas available to retail load is scarce and the
situation giving rise to the Letter of Intent reflects a unique opportunity for CAPP
members to increase savings and reduce electric price volatility; and
WHEREAS, the owner of the coal capacity needs a Letter of Intent by the end of
September, 2005, and desires completion of a contract by December 31, 2005.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF EULESS, TEXAS:
1.
THAT the efforts of the CAPP Board to secure coal capacity for the City of
Euless' base Toad electric capacity needs for a fixed price for a 10 -year period
commencing in the 4"' quarter of 2007 are hereby ratified.
II.
THAT the City of Euless endorses the CAPP Board committing to a letter of
intent to contract for coal capacity with the understanding that: (1) CAPP will provide
proof of economic benefit of coal capacity and energy from a coal and gas mix in
comparison to exclusive reliance on energy priced on 100% gas generation coupled
with a conservative forecast of natural gas prices; (2) the City of Euless will have an
opportunity to review and approve or reject a 10 -year contractual agreement to supply
all the city's power needs; and (3) CAPP will issue bonds to secure funding of amounts
necessary to prepay the capacity portion of the coal supply contract.
ADOPTED at a regular meeting of the City Council on the 22 "d day of November,
2005, by a vote of 7 ayes, 0 nays, and 0 abstentions.
APPROVED:
Mary Lib Sbleh
Mayor
ATTEST:
usan Crim, MC
City Secretary
Resolution No. 05 -1213, Page 2 of 2