HomeMy WebLinkAbout027917 RES - 10/28/2008RESOLUTION
OF THE CITY OF CORPUS CHRISTI, TEXAS, AUTHORIZING THE SOUTH TEXAS
AGGREGATION PROJECT, INC. (STAP) TO NEGOTIATE AND EXECUTE AN
ELECTRIC SUPPLY AGREEMENT FOR DELIVERIES OF ELECTRICITY AND
NECESSARY, RELATED SERVICES EFFECTIVE JANUARY 1, 2009; APPROVING
STAP CONTRACTING WITH FPL ENERGY POWER MARKETING, INC. AND
DIRECT ENERGY, L.P. AND AUTHORIZING THE CITY MANAGER TO SIGN A
CONTRACT WITH STAP FOR THE CITY'S ELECTRICITY NEEDS FOR THE
PERIOD BEGINNING JANUARY 1, 2009 AND EXTENDING UP TO DECEMBER 31,
2013.
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 for more than 50 political subdivision members in the
competitive retail market; and
WHEREAS, STAP negotiated favorable contract terms and a reasonable commodity price for
delivered electricity since 2002 resulting in significant savings for its members;
and
WHEREAS, the City's current contract for power expires December 31, 2008; and
WHEREAS, STAP members must secure power supplies for 2009 or revert to high price
standard contracts and independently shop for a power contract; and
WHEREAS, the STAP Board of Directors is currently considering indicative retail energy
prices that point to favorable pricing for the five year period ending December
31, 2013; and
WHEREAS, experience gained by the STAP Board indicates that entering into a wholesale
power contract, as distinct from a retail contract, effective January 1, 2009 may
provide for greatest potential savings for STAP members; and
WHEREAS, 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 2009 deliveries
will be short-lived and that STAP must be able to commit contractually to prices
within a 24-hour period in order to lock -in favorable prices; and
WHEREAS, experiences in contracting for STAP load since 2002 demonstrated that providers
demand immediate response to an offer and may penalize delay with higher
prices; and
WHEREAS, aggregated rates contracted during favorable pricing periods are likely to be
lower than prices obtained by the City contracting individually during the same
time period; and
027917
WHEREAS, suppliers demand assurance that STAP will pay for all contracted load; and
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
the City must assure STAP that it will budget for energy purchases and honor its
commitments to purchase power for its electrical needs through STAP for the
period beginning January 1, 2009 and extending through December 31, 2013; and
STAP intends to contract with both FPL Energy (power supply) and Direct
Energy (billing, administrative and other customer services); and
the City desires to investigate options to voluntarily incorporate renewable
energy into their overall energy portfolio; and
FPL Energy is one of the leading providers of renewable energy in Texas; and
the City at some point during the period ending December 31, 2013, may wish to
substitute or supplement renewable energy for a portion of its annual electrical
supply; and
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 are agents authorized to negotiate
for the City's electricity needs as a member of STAP for a term to begin January 1, 2009 and
extending up to December 31, 2013.
Section 2:
That the City approves STAP contracting with FPL Energy and Direct Energy for the
supply of electric power and related, necessary services for the City for a term to begin January
1, 2009 and extending up to December 31, 2013, at price not to exceed 8.5 cents per kilowatt
hour at wholesale level.
Section 3:
That the City will execute a contract with STAP that permits the Chairman of STAP to
sign a Commercial Electric Supply Agreement for the City's electricity needs and related,
necessary services beginning January 1, 2009 and extending up to December 31, 2013, at price
not to exceed 8.5 cents per kilowatt hour at wholesale level, as a member of STAP and commits
its load for the same period pursuant to the contract recommended and approved by the STAP
Board of Directors.
Section 4:
That the City Manager or his designee is authorized to negotiate with the STAP retail
electric provider and/or STAP's energy provider to replace or supplement a portion of the City's
electric supply with renewable energy.
Section 5:
That the City will budget and approve funds necessary to pay electricity costs
proportionate to the City's load under the supply agreement arranged by STAP and signed by the
Chairman of STAP on behalf of all STAP members for the term beginning January 1, 2009 and
extending up to December 31, 2013.
That a copy of the resolution shall be sent to Geoffrey M. Gay, legal counsel to STAP,
816 Congress Avenue, Suite 1900, Austin, Texas 78701, fax no. 512/472-0532.
PRESENTED AND PASSED on this v a day of Cd-ktA.} , 2008 at a
regular meeting of the City Council of the City of Corpus Christi, Texas.
ATTEST:
Armando Chapa
City Secretary
APPROVED: October 27, 2008.
Lisa Aguilar
Assistant City Attorney
for the City Attorney
THE ITY OF CORPUS CHRISTI
Jaw „Ladd v.411.11,
f eery Gel e
Mayor
Corpus Christi, Texas
b of C , 2008
The above resolution was passed by the following vote:
Henry Garrett
Melody Cooper
Larry Elizondo, Sr.
Mike Hummel)
Bill Kelly
Priscilla G. Leal
John E. Marez
Nelda Martinez
Michael McCutchon
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