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:
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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