HomeMy WebLinkAboutResolution - 2004-R0260 - Approval Forletter Agreement With WTMPA And SPS To Waive Rights To Contest Rates - 06/09/2004Resolution No. 2004-R0260
June 9, 2004
Item No. 25
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and
directed to execute for and on behalf of the City of Lubbock a Letter Agreement between
the cities of Brownfield, Floydada, Lubbock, Tulia and the West Texas Municipal Power
Agency (WTMP A) with Southwestern Public Service (SPS) whereby the City agrees to
waive any right to contest SPS's wholesale power rates or bring related litigation subject
to the terms and conditions of the Letter Agreement, which is attached hereto and which
shall be spread upon the minutes of the Council and as spread upon the minutes of this
Council shall constitute and be a part of this Resolution as if fully copied herein in detail.
Passed by the City Council this 9th day of _____ J_u_ne ____ , 2004.
ATTEST:
f),,.Qk-< "' ~~ ~ca Garza, City Secretary
APPROVED AS TO CONTENT:
Carroll McDonald,
Director of Electric Utilities
Resolution No. 2004-R0260
LETTER OF AGREEMENT
In FERC Docket No. EROl-205-004, West Texas Municipal Power
Agency ("WTMP A") has filed a protest contesting the continuation of
Southwestern Public Service Company's ("SPS") market-based rate
authority. The City of Lubbock, Texas, ("Lubbock") a member ofWTMPA,
has also asserted that SPS 's existing rates to WTMP A result in an
anticompetitive price squeeze, making it difficult for it to compete with SPS
at retail. This protest was filed and this allegation was raised during our
negotiations of new power supply arrangements whereby SPS will provide
WTMP A with full requirements service.
SPS is entering into certain new power supply agreements with
WTMP A as a market-based sale under its existing market-based rate
authority. These agreements consist of a Brandon/Massengale Unit
Contingent Transaction Agreement with Lubbock, a Cooke Unit Contingent
Transaction Agreement with Lubbock, a Transaction Agreement for Total
Requirements Power Service (the "Transaction Agreement") and related
Master Power Purchase and Sales Agreements. Accordingly, as part of the
consideration in entering into the above agreements, WTMP A and each of
its members, including Lubbock, agree to the following:
• WTMP A agrees that it will withdraw its protest in FERC Docket No.
ERO 1-205-004 challenging Company's ability to enter into market-
based sales;
• WTMP A and the City of Lubbock, City of Floydada, City of
Brownfield and City of Tulia, Texas agree that they will not contest
Company's right to make wholesale sales of electricity at market-
based rates in any other proceeding before the FERC while this
Agreement is effective; and
• WTMP A and the City of Lubbock, City of Floydada, City of
Brownfield and City of Tulia, Texas agree to waive any right that they
may have. to contest the rates charged by SPS under any past or
current agreement or the rates charged under the new Transaction
Agreement (excepted as otherwise provided therein) and to release
Company from any, damages thereunder based upon a claim, arising
out of events, acts, or omissions occurring prior to the date of this
Letter of Agreement, of price squeeze (i.e., that wholesale rate levels
make a customer unable to compete) before any forum or upon any
other antitrust theory or claim of anticompetitive effect.
1278/44; pcd#137904v2; jwd/agrt/2y#_Ol.doc
Please signify your concurrence to these terms by executing this letter
at the designated place below.
City of Floydada, Texas
City of Brownfield, Texas
City of Tulia, Texas
Southwestern Public Service Company
1278/44; pcd#137904v2; jwd/agrt/2y#_O!.doc
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