Resolution 2009-05
~
RESOLUTION NO. 2009-OS(R)
A RESOLUTION OF THE CITY OF WYLIE, TEXAS,
ENDORSING CERTAIN LEGISLATIVE CHANGES TO
ENHANCE THE COMPETITIVE ELECTRIC MARKET
SUPPORTED BY CITIES AGGREGATION POWER PROJECT,
INC.
WHEREAS, the City is a member of Cities Aggregation Power Project, Inc. ("CAPP"),
a non-profit organization created by cities throughout Texas to secure affordable energy for its
members in the deregulated electric market; and
WHEREAS, affordable and reliable power means economic development for our cities
and a better standard of living for our citizens; and
WHEREAS, by deregulating the retail electric market, Senate Bill 7 of 1999 ("SB 7")
intended to allow competitive forces to drive down the price of electricity; and
WHEREAS, CAPP's seven-year experience with the deregulated market, including
negotiating power contracts with several different retail electric providers, indicates that the
Texas electric retail market has failed to develop into a truly competitive market as envisioned
by the Texas Legislature and that prices are higher, not lower, after deregulation; and
WAEREAS, competition has ~ failed to develop in the deregulated electric market
because certain power generation companies own or control enough generation capacity to
exercise market power to the detriment of customers and non-affiliated retail electric providers;
and
WHEREAS, alleged market power abuse inquiries conducted by the Public Utility
Commission ("PUC") are hampered by the lack of adequate resources because the parties hurt by
the illegal activity, like cities, are not allowed to participate in the investigations; and
WHEREAS, residential customers in Texas communities are unable to obtain lower
power prices that may be available to them through bulk purchasing because current law makes
the creation of citizen aggregation groups unworkable; and
WHEREAS, the Electric Reliability Council of Texas ("ERCOT") is expected to spend
at least $660 million to implement a nodal market in Texas, an unproven market design program
that is several years behind schedule and several hundred million dollars over budget; and
WHEREAS, the City supports all legislative initiatives that promote a truly healthy
electric market where competition can flourish and consumers can save money; and
~
Resolution No. 2009-OS(R)
Endorsing Certain Legislative Changes
CAPP
WHEREAS, the City endorses efforts proposed by CAPP to modify the electric
deregulation legislation to enhance competition, implement the original intent of SB 7 and
reduce costs to the City and its residents.
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
WYLIE, TEXAS, THAT:
Section I. The City supports the introduction and adoption of legislation in the 81 ~
Session of the Texas State Legislature that promotes affordable power and the transition of the
Texas electric market from a deregulated market to a fully competitive one. Specifically, the
City supports legislation that will address the following issues:
• All generators, regardless of size, should explicitly be barred from the unlawful
exercise of market power.
• Ownership and control of generation capacity should be limited to no more
than twenty percent (20%) of total generation capacity within the market in
order to enhance competition and mitigate market power and the ability of any
one generator to affect prices. This is in accordance with basic anti-trust
principles and as originally designed in SB 7, although the "market" should be
~ redefined as the functional market (an ERCOT zone) to reflect real-world
conditions. In the alternative, the PUC should be directed to create a single
ERCOT-wide market with uniform congestion pricing.
• Entities such as municipalities, commercial customers or retail electric
providers harmed by wholesale market abuse should be given explicit standing
to participate in market power abuse enforcement actions brought by the PUC.
• Cities should be permitted to create citizen aggregation groups to combine the
power needs of residents that have not specifically asked to be excluded in
order to facilitate bulk power purchasing and enhance the opportunities for
residential customers to benefit from deregulation and benefit the entire state
by increasing competition. Citizens who have signed a contract with a retail
provider would be excluded, as would those citizens who otherwise opt out.
• All efforts to transition to a nodal mazket in ERCOT should be abandoned and
other market design options that benefit all market participants should be
considered.
Section II. 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
CAPP.
~
Resolution No. 2009-OS(R)
Endorsing Certain Legislative Changes
CAPP
DULY APPROVED AND PASSED by the Ci Council of the City of Wylie, Texas on
this the 10`h day of February , 2009 by a vote of ~ ayes and p nays at a regular
meeting of the City Council of the City of Wylie, Texas.
Eric Hogue, M yor
°F ~l
ATTEST: ~~~~..cn.r j,tp
c
; ~
Carole Erhlich, ty Secretary
.~r~~"' ~""+~Ow'.
~ ,~887~
~
~
Resolution No. 2009-OS(R)
Endorsing Certain Legislative Changes
CAPP