HomeMy WebLinkAbout026531 RES - 10/25/2005
RESOLUTION
APPROV AL OF SOUTH TEXAS AGGREGATION PROJECT'S
LETTER OF INTENT TO ENTER INTO NEGOTIATIONS FOR
A CAPACITY CONTRACT WITH THE OWNER OF COAL
(INCLUDING TEXAS LIGNITE) GENERATION TO SUPPLY
THE BASE LOAD ELECTRIC POWER NEEDS
(APPROXIMATELY 55%-60% OF TOTAL ENERGY NEEDS)
FOR ST AP MEMBERS OVER A 10- YEAR PERIOD
WHEREAS, the City of Corpus Christi ("City") is a member of South Texas Aggregation
Project, Inc. ("ST AP") and said membership has resulted in average annual energy savings over
2()(~/(l off of the Public Utility Commission ("PUC") approved price to beat; and
WHEREAS, all retail power bids from various Retail Electric Providers (REPs) in the
deregulated electric retail market have been directly linked to natural gas futures prices; and
WHEREAS, natural gas prices have been extremely volatile and have caused substantial
llllTeases in the price of electricity paid by the City; and
WHEREAS, ST AP is in the process of negotiating a 10-year capacity supply contract for
the city's base load electric needs (approximately 55% of the city's total electric energy needs)
Ell a fixed price that should provide considerable economic benefit and greater price stability in
c.JIl1parison to traditional energy contracts with REPs; and
WHEREAS, coal-fired capacity in Texas available to retail load is scarce and the
SituatIOn giving rise to the Letter of Intent reflects a unique opportunity for STAP members to
increase savings and reduce electric price volatility; and
WHEREAS, the owner of the coal capacity needs a letter of intent by the end of
September 2005 and desires completion of a contract by December 31, 2005.
THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CORPUS CHRISTI THAT
02h~dl
The efforts of the ST AP Board to secure coal capacity for the City of Corpus
('hnsti's hase load electric capacity needs for a fixed price for a 10-year period commencing
between the 4th quarter of 2007 and the 3rd quarter of 2008 are hereby ratified,
,
The City of Corpus Christi endorses the ST AP Board committing to a letter of
Illtenl to contract for coal capacity with the understanding that: (1) ST AP will provide proof of
economic benefit of coal capacity and energy from a coal and gas mix in comparison to
exclusive reliance on energy priced on 100% gas generation coupled with a conservative forecast
01 natural gas prices; (2) the City of Corpus Christi will have an opportunity to review and
appmve or reject a 10-year contractual agreement to supply all the city's power needs; and (3)
STAP wili issue bonds to secure funding of amounts necessary to prepay the capacity portion of
the coal supply contract.
Signed this A
day of ,_ . hA(M~ L ,2005.
JJr-~dt
ayor
i'\rTEST:
/J' ...,
~/
{ --~
-_._--_.._~_._. ,.----...
eny Secretary
Corpus Christi. Texas
-\) . day of jl h {">e: ''-- , 2005
The above resolution was passed by the following vote:
Henry Garrett ~tLY_
Brent Chesney ,Lt \l-
Melody Cooper :_)~f'
Jerry Garcia (ji--
Bill Kelly D~ y'___
Rex A. Kinnison u,f-'
'I
John E. Marez LtLt~
1
Jesse Noyola ~L'j.'1
Mark Scott .U"~.
"
H\LEG-DIRlelizabethIDept FileslEH ResolutionslEHres155.doc
02h~31