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HomeMy WebLinkAboutCity Council Resolutions (R-05-2527)-03/15/2005 RESOLUTION R-05-2527 A RESOLUTION ENDORSING CERTAIN LEGISLATIVE CHANGES TO S.B. 7 SUPPORTED BY CITIES AGGREGATION POWER PROJECT, INC. WHEREAS, the City of Colleyville, Texas (City) has historically been active in the process of regulation of electric utilities; and WHEREAS, the City is a member of Cities Aggregation Power Project, Inc. (CAPP) and, as such, made a decision to join with more than 78 other cities to switch its municipal electric accounts from its incumbent provider to a retail electric provider; and WHEREAS, CAPP's experience with the deregulated market and contracts with several different retail electric providers has indicated that the Texas electric retail market has failed to develop into a truly competitive market as envisioned by Senate Bill 7 (S.B. 7), in part, because congestion zones within the Electric Reliability Council of Texas (ERCOT) market have allowed certain market players to control enough generation capacity, within a given zone, to exercise market power to the detriment of customers and non-affiliated retail electric providers; and WHEREAS, retail electric price competition has not successfully reached residential customers in Texas communities with populations less than 40,000; and WHEREAS, the formula established by S.B. 7, to determine the amount to be paid to cities for electric franchise fees, is based upon information from 1998 and fails to 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, directly assign congestion costs in a manner that will create winners and losers among geographic areas of the state and harm economic development in areas receiving congestion cost surcharges; and WHEREAS, the City endorses efforts proposed by CAPP to modify the electric deregulation legislation to improve competition, implement the original intent of S.B. 7 and reduce costs to the City and its residents. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLLEYVILLE, TEXAS: Sec. 1. THAT the following legislative reforms endorsed by CAPP 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 be supported by the City: Resolution R-05-2527 Page 2 of 2 . Require that ERCOT function as one zone or limit the ownership and control of generation within functional markets (ERCOT zones) and require further Commission action to mitigate market control (SB 764). . 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 (SB 759). . 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 (SB 763). . Oppose any cost allocation system of nodal pricing costs that would directly assign congestion costs in a manner that is detrimental to economic development. CAPP and STAP question whether ERCOT is capable of handling the massive operational change that creating a nodal market would require, and whether the projected benefits are worth the approximately $500 million up-front costs to implement. However, if nodal pricing is instituted then congestion costs should be spread to the entire ERCOT service area rather than increasing electric costs for customers in certain regions of Texas (SB 761). Sec. 2. THAT a copy of the resolution shall be sent to the elected lawmakers representing the City's interests in the Texas House and Senate and to the Chairman and legal counsel of CAPPo AND IT IS SO RESOLVED. PASSED BY A VOTE OF 5 AYES, D NAYS AND ON THIS THE ~ DAY OF 7./le~ 2005. D ABSTENTIONS ATTEST: ty1 r Cynthia Singleton, TRMC City Secretary RESOLUTION R-05-2528 A RESOLUTION ACCEPTING SETTLEMENT WITH TXU ELECTRIC DELIVERY WHEREAS, the City of Colleyville, Texas, is a member of the Steering Committee of Cities served by TXU (Steering Committee); and WHEREAS, the Steering Committee did encourage certain member cities to initiate show cause rate proceedings against TXU and the City of Colleyville passed Resolution R-04-2441 supporting these efforts; and WHEREAS, Electric Delivery and the Steering Committee engaged in settlement discussions regarding abatement of any full-scale rate investigation and interim relief that may be available to Cities; and WHEREAS, it remains impractical, if not impossible, to deliver rate relief to the vast majority of residential customers until the expiration of price to beat (PTB) on January 1, 2007; and WHEREAS, the unfair and adverse impacts of street lighting and water pumping tariffs that Cities have experienced since the implementation of retail deregulation on January 1, 2002, can be addressed on an interim basis pending a final order in a future rate case through a financial distribution from the Steering Committee of funds received from Electric Delivery as part of a Settlement; and WHEREAS, the coupling of interim relief with the Steering Committee's recognition that resources should be devoted to the 2005 Legislative Session to promote overall enhancements in electric retail competition for the benefit of all end-users; and WHEREAS, the Steering Committee and Electric Delivery have entered into a Settlement Agreement pending approval by the 20 Cities that passed show-cause resolutions and ratification by other member cities with original jurisdiction; and WHEREAS, Electric Delivery has agreed to improve communication, coordination and timing of construction in rights of way, permit development of a tariff that will allow city mandated underground placement of distribution facilities, modify certain franchise renewal negotiation positions and improve meter reading on certain city accounts that are estimated; and WHEREAS, Electric Delivery has committed to the Steering Committee, during the period of rate case abatement, to share information on certain company operations and procedures that should enhance the Cities' ability to appropriately exercise regulatory responsibilities in the rate proceeding that Electric Delivery has agreed to file on or before July 1, 2006; and Resolution R-05-2528 Page 2 of 2 WHEREAS, that Agreement calls for immediate and long-term benefits to flow to all city members of the Steering Committee, which in turn, have indirect but positive benefit to all city residents and public safety in general. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLLEYVILLE, TEXAS: Sec. 1. The Settlement Agreement between the Cities' Steering Committee and TXU Electric Delivery is hereby ratified. AND IT IS SO RESOLVED. PASSED BY A VO~ OF 5' AYES, 0 NAYS AND ON THIS THE .15"' DAY OF 7 c'f; 2005. o ABSTENTIONS Cynthia Singleton, TRMC City Secretary