HomeMy WebLinkAbout025953 RES - 09/14/2004RESOLUTION
A RESOLUTION OF THE CITY OF CORPUS CHRISTI, TEXAS,
AUTHORIZING THE SOUTH TEXAS AGGREGATION PROJECT, INC. TO
NEGOTIATE AN ELECTRIC SUPPLY AGREEMENT FOR DELIVERIES OF
ELECTRICITY EFFECTIVE JANUARY 1, 2005; AUTHORIZING THE CITY
MANAGER OR HIS DESIGNEE TO SIGN A CONRACT WITH STAP FOR
THE CITY OF CORPUS CHRISTI'S 2005 ELECTRICITY NEEDS; AND
COMMITTING TO BUDGET FOR ENERGY PURCHASES IN 2005 AND TO
HONOR THE CITY OF CORPUS CHRISTI'S COMMITMENTS TO
PURCHASE POWER FOR ITS ELECTRICAL NEEDS IN 2005 THROUGH
STAP.
WHEREAS, the City of Corpus Christi, Texas (City) is a member of South Texas
Aggregation Project, Inc. (STAP), a nonprofit political subdivision corporation dedicated
to securing electric power lbr its 45 members in the competitive retail market; and
WHEREAS, STAP 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 STAP 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 STAP 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 STAP member; and
WHEREAS, STAP 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 STAP must be able to commit
contractually to prices within a 24-hour period in order to lock-in favorable prices
regardless of whether STAP 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 rever! to PTB rates; and
WHEREAS, STAP's current delivered energy prices provide savings when measured
against the PTB rate, and PTB rates will likely continue to remain higher than prices
STAP can achieve on behalf of the City; and
WHEREAS, wholesale suppliers demand assurance that STAP will pay for all
contracted load; and
WHEREAS, the City of Corpus Christi needs to assure STAP that it will budget for
energy purchases in 2005 and honor its commitments to purchase power for its electrical
needs in 2005 through STAP.
NOW, THERFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF CORPUS CHRISTI, TEXAS:
SECTION 1: That the STAP Board and its consultants and advisors will evaluate for the City
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 City Manager or his designee will execute a contract with STAP that
permits the STAP Board and its consultants and advisors to negotiate and sign the 2005 electric
power agreement for the City's electricity needs as a member of STAP and commits its 2005
load pursuant to the contract recommended and approved by the STAP Board of Directors.
SECTION 3: That the City will commit to purchase power to meet all of its electricity needs
eligible for competition pursuant to the STAP approved supply agreement and approve funds
necessary to pay electricity costs proportionate to the City's load under the supply agreement
(whether wholesale or retail) arranged by STAP.
SECTION 4: That a copy of the resolution shall be sent to Geoffrey M. Gay, legal counsel to
STAP.
ATTEST:
7~rmando Chapa
City Secretary
Approved: ~. 7, ,2004
THE CITY OF CORPUS CHRISTI
Mayor
City Attorney
Corpus Christi, Texas
L '~ day of ~ I'~'-~ ~ , 2004
The above resolution was passed by the following vote:
Samuel L. Neal,
Brent Chesney
Javier D. Colmenero
Melody Cooper
Henry Garrett
Rex A. Kinnison
Jesse Noyola
Mark Scott