HomeMy WebLinkAbout09-1310 05-12-2009RESOLUTION NO. 09 -1310
A RESOLUTION OF THE CITY OF EULESS, TEXAS, ENDORSING
CERTAIN LEGISLATIVE CHANGES TO ENHANCE THE COMPETITIVE
ELECTRIC MARKET SUPPORTED BY CITIES AGGREGATION
POWER PROJECT, INC. AND URGING SUPPORT OF HB 2780 AND
SB 1481.
WHEREAS, the City of Euless, Texas (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 EULESS, 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 House Bill 2780 and Senate Bill 1481 and
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.
Resolution No. 09 -1310, Page 2 of 3
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.
APPROVED AND ADOPTED at a regular meeting of the City of Euless Council
on the 12th day of May, 2009, by a vote of 7 ayes, 0 nays, and 0
abstentions.
APPROVED:
(log-
Mary Lib S`aleh, Mayor
ATTEST:
rim,
C, City Secretary
Resolution No. 09 -1310, Page 3 of 3