HomeMy WebLinkAbout026173 RES - 03/08/2005
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RESOLUTION
OF THE CITY OF CORPUS CHRISTI, TEXAS ENDORSING CERTAIN
LEGISLATIVE CHANGES TO S.B. 7, TEXAS' ELECTRIC DEREGULATION
BILL, SUPPORTED BY SOUTH TEXAS AGGREGATION PROJECT, INC.
WHEREAS, the City of Corpus Christi, Texas, (City), has historically been active in the
process of regulation of electric utilities; and
WHEREAS, the City is a member of South Texas Aggregation Project, Inc. (STAP), and
as such, made a decision to join with more than 40 other cities to switch its municipal
electric accounts from its incumbent provider to a retail electric provider; and
WHEREAS, STAP's experience with the deregulated market and contracts with several
different retail electric providers has indicated that the Texas electric retail market has
not developed into a truly competitive market as envisioned by Senate Bill 7 (SB7) in
part because the Electric Reliability Council of Texas (ERCOT) current system of
congestion zones allows some market participants to control generation capacity within
a given zone; and
WHEREAS, retail electric price competition has not successfully reached residential
customers in Texas communities with populations less than 40,000 in rural South
Texas; and
WHEREAS, the formula established by SB7 to determine the amount to be paid to
cities for electric franchise fees is based upon information from 1998 and does not
account for any increases to keep up with inflation, impacting municipalities' revenue
and budgets; and
WHEREAS, the Public Utility Commission of Texas is considering implementing a nodal
market design in ERCOT that would, as currently contemplated, harm economic
development in South Texas by directly assigning congestion costs based on
geographic locations in the state, instead of the current method, which spreads costs
throughout the state; and
WHEREAS, the City endorses efforts proposed by STAP to modify the electric
deregulation legislation to improve congestion, implement the original intent of SB7 and
reduce costs to the City and its residents;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CORPUS CHRISTI, TEXAS:
SECTION 1. That the following legislative reforms endorsed by STAP to limit market
power, prevent cost shifting between geographic areas of the state, create effective
citizen aggregation and permit annual adjustments to municipal franchise fees are
supported by the City:
A, Require that ERCOT function as one zone or limit the ownership and control
March 8, 2005 STAP resolution.DOC
02617?
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of generation within functional markets (ERCOT zones) and require further
Commission action to mitigate market control
B. Authorize citizen aggregation projects that will permit cities and towns with
populations less than 40,000 to aggregate the load of all of their residents that
have not specifically asked to be excluded from the aggregation project.
Changing citizen aggregation from "opt-in" to "opt-out" will enhance the
opportunities for rural residential customers to benefit from deregulation and
benefit the entire state by increasing competition.
C. Tie escalation of electric franchise fee amounts to the Consumer Price Index
by permitting municipalities to annually adjust franchise fee amounts by one-half
of the annual change to the consumer price index, mirroring a provision already
in law for telecommunications franchise fees.
D. Oppose any cost allocation system of nodal pricing costs that would directly
assign congestion costs in a manner that is detrimental to economic
development. If nodal pricing is instituted, congestion costs should be spread to
the entire ERCOT service area rather than increasing electric costs for
customers in certain regions of Texas.
SECTION 2, A copy of this resolution shall be sent by the Office of the City Secretary
to the elected lawmakers representing the interests of the City of Corpus Christi, Texas
in the Texas House and Senate and to the STAP legal counsel.
ATTEST:
~
Armando Chapa
City Secretary
APPROVED: 2- day of )rvvv vh-
By: I:~ ~
Lisa Aguila
Assistant City Attorney
for City Attorney
,2005.
March 8, 2005 STAP resolution.DOC
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S9J"pus Christi, Texas
.a':: day of
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,2005
The above resolution was passed by the following vote:
Samuel L. Neal, Jr.
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Brent Chesney
Javier D. Colmenero
Melody Cooper
Henry Garrett
Bill Kelly
Rex A. Kinnison
Jesse Noyola
Mark Scott
March 8 2005 STAP resolution.DOC
02R17~