09-053 - R RESOLUTION NO. 09-053
A RESOLUTION OF THE TOWN OF PROSPER, TEXAS, ENDORSING
CERTAIN LEGISLATIVE CHANGES TO ENHANCE THE COMPETITIVE
ELECTRIC MARKET SUPPORTED BY CITIES AGGREGATION POWER
PROJECT, INC.
WHEREAS, the Town 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
WHEREAS, 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 Town supports all legislative initiatives that promote a truly healthy
electric market where competition can flourish and consumers can save
money; and
WHEREAS, the Town 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 Town and its residents.
THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN
OF PROSPER, TEXAS, THAT:
I.
The Town supports the introduction and adoption of legislation in the 81St 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 Town 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 market in ERCOT should be abandoned and other
market design options that benefit all market participants should be considered.
II.
A copy of the resolution shall be sent to the elected lawmakers representing the Town's
interests in the Texas House and Senate and to the Chairman and legal counsel of CAPP.
PRESENTED AND PASSED on this 14th day of April, 2009, by a vote of 7 ayes and 0
nays at the April 14, 2009 regular meeting of the Town Council o of Prosper, Texas.
Charles iswanger, or
ATTEST:
Matthew D. Denton, TRMC �� � o ®�••R0Sei�
Town Secretary ®a® 1%.t
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