RES 2004-18TOWN OF TROPHY CLUB,TEXAS
RESOLUTION NO.2004-18
A RESOLUTION OF THE TOWN OF TROPHY
CLUB,TEXAS,AUTHORIZING THE CITIES
AGGREGATION POWER PROJECT,INC.
("CAPP")TO NEGOTIATE AN ELECTRIC SUPPLY
AGREEMENT FOR DELIVERIES OF
ELECTRICITY EFFECTIVE JANUARY 1,2005;
AUTHORIZING CAPP TO ACT AS AN AGENT ON
BEHALF OF THE TOWN TO ENTER INTO A
CONTRACT FOR ELECTRICITY;AUTHORIZING
THE CHAIRMAN OF CAPP 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 TOWN OF TROPHY CLUB'S
COMMITMENTS TO PURCHASE POWER FOR ITS
ELECTRICAL NEEDS IN 2005 THROUGH CAPPo
WHEREAS,the Town of Trophy Club,Texas (Town)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,experiencesin contractingfor 2002-2004demonstrated that Retail
Electric Providers demand immediate response to an offer and may
penalize delay with higher prices;and
WHEREAS,it is necessary for the Town 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
Town;and
WHEREAS,wholesale suppliers demand assurance that CAPP will pay for all
contracted load;and
WHEREAS,the Town of Trophy Club 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 CAPPo
BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF TROPHY
CLUB,TEXAS:
Section 1.That the CAPP Board and its consultants and advisors are agents
authorized to negotiate for the Town'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 Town 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 Town will budget and approve funds necessary to pay
electricity costs proportionate to the Town's load under the supply agreement (whether
wholesale or retail)arranged by CAPP and signed by the Chairman of CAPP for the
Town.
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 CAPPo
-2~
Diane Cockrell,To~n Secretary
Town of Trophy Club,Texas
APPROVED AS TO FORM:
~-t~0JtlY¥l/V
Town Attorney
Town of Trophy Club,Texas