R-04-05-11-3A1 - 5/11/2004RESOLUTION NO. R -04-05-11-3A 1
WHEREAS, under Senate Bill 7 of the 76 th Legislature (1999)
the Texas Legislature deregulated the purchase of electric power in
the State of Texas effective January 1, 2002, and
WHEREAS, the Texas Local Government Code, Chapter 303,
Section 303.001 authorizes political subdivisions to join together
to create a political subdivision corporation to aggregate their
power loads as customers to purchase power, and
WHEREAS, the City of Round Rock ("City") , in order to
aggregate it's power load with other cities, joined the
Governmental Aggregation Project, Inc. ("GAP"), a political
subdivision corporation aggregator registered with the Texas Public
Utility Commission ("PUC"), and
WHEREAS, GAP is in the process of negotiating a competitive
Electrical Power Purchase Contract on behalf of its members to
purchase electric power with several Retail Electric Providers
("REP"), all of which are properly registered with the PUC, and
WHEREAS, in order for the City to timely execute an electric
power supply contract with a REP to obtain the best price in the
volatile energy market, this Resolution authorizes the execution of
such a contract by the City to purchase power from a Retail
Electric Provider, as recommended by GAP, provided the terms of
this Resolution are complied with, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS,
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Section 1: The Mayor may execute, on behalf of the City, a
contract to purchase power between the City and a Retail Electric
Provider in accordance with the terms of this Resolution.
Section 2: The Mayor may only execute an electric power supply
contract ("Contract") with an REP in the event the following
conditions are strictly complied with:
(i) the term of the Contract is no less than six months and
no more than two years;
(ii) that either:
(a) the price of the power on a KWH basis is at least
ten percent (10%) less than the "price to beat"
price in the City's service area, as determined by
the Public Utility Commission of Texas, if such
information is available at the time of the
execution of the Contract; or
(b) if "price to beat" information is not available,
then the price per KWH'shall be competitive as to
other known KWH charges, considering the terms of
the Contract and the competitive KWH Contract
terms;
(iii) the Contract provides for no liability to the City,
except as to the electrical power used by the City; and
(iv) that the REP recommend by GAP was selected in a
competitive process, in which the recommended REP offers
the most competitive and beneficial Contract to the City
when considering the following factors:
(a) price per KWH;
(b) the amount, if any, of premiums to be paid by the
City for using either less or more electrical power
than its historic power usage; and
(c) ability to provide detailed, consolidated billing
for the City and to provide current electrical load
data for the City.
Section 3: This Resolution shall take effect upon adoption.
The City Council hereby finds and declares that written notice
of the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to
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the public as required by law at all times during which this
Resolution and the subject matter hereof were discussed, considered
and formally acted upon, all as required by the Open Meetings Act,
Chapter 551, Texas Government Code, as amended.
RESOLVED this llth day of May, 2004.
ATT
NY W LL, Mayo
Ci of Round Rock, Texas
CHRISTINE R. MARTINEZ, City Secretary
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DATE: May 7, 2004
SUBJECT: City Council Meeting - May 11, 2004
ITEM: 3.A.1. Consider a resolution authorizing the Mayor to execute an
electrical power purchase contract with a Retail Electric
Provider to provide electric power to the City.
Department: Finance Department
Staff Person: David Kautz, Assistant City Manager/Chief Financial Officer
Cindy Demers, Finance Director
Justification: The City's current contract with First Choice Power expires on
December 31, 2004. However, current trends in the cost of natural
gas and corresponding increases in bids by retail electric providers
suggest that GAP should request bids that will insulate the City
from these trends through June 2005. This resolution grants the
Mayor the authority to execute the negotiated contract that results
form this process.
Funding:
Cost: N/A (This item does not bind the City to any agreement or course of
action)
Source of funds: N/A
Outside Resources: Fox, Smolen & Associates
Background Information:
Public Comment: N/A
Since deregulation of the electric market, the City of
Round Rock has been a member of the Governmental
Aggregation Project (GAP). GAP was formed for the
purposes of purchasing electricity on behalf of its
members for use in the public facilities. The services
provided by GAP also include assisting with bill
monitoring and contract enforcement. In addition,
GAP keeps the members informed of changes in the
PUCT rules or cases that affect them and intervene in
cases when appropriate. Other members of GAP
include the cities of Missouri City, Wharton, West
University Place, Farmers Branch, Taylor, Clifton,
Uvalde and Gatesville as well as the Oak Manor
Municipal Utility District.
GAP has previously completed two requests for
proposals process with REPs to provide electricity in
the competitive market and negotiated two contracts
for power with TXU Energy in 2002 and First Choice
Power in 2003.