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<br />CITY OF LA PORTE <br /> <br />INTEROFFICE MEMORANDUM <br /> <br />April 25, 2001 <br /> <br />TO: <br /> <br />Mayor and City Council <br /> <br />FROM: <br /> <br />Robert T. Herrera, City Manager <br />~ l K.e;'V\.4-"':- <br />Electric Deregulation <br /> <br />SUBJECT: <br /> <br />During the May 8, 2001 City Council meeting, you will be asked by Staff to support a <br />resolution to partnership and join H-GAC to become a Political Subdivision Corporation (PSC) <br />named H-GAC Energy Purchasing Corporation. H-GAC is requesting that the City of La <br />Porte join H-GAC as the initial, creating political subdivisions. <br /> <br />We the Staff believe this is the appropriate direction to take and recommend it to you. We are <br />familiar with H-GAC and have enjoyed a long and positive relationship with them. By being <br />the first to join with them we help them achieve state recognition as a pool aggregate. The <br />adoption of the Resolution is one of participation only. The City is not committing itself to <br />buying electrical power from H-GAC at this time. A second Resolution will be needed for a <br />commitment to occur. <br /> <br />History <br /> <br />In 1999 the Texas Legislature passed Senate Bill 7 that deregulates retail electric power. This <br />means customers may now shop for electricity from various Retail Electric Providers (REPs) <br />for the best price. Customers that have chosen a REP by January 1, 2002, will continue to be <br />provided service from an affiliated REP or Provider of Last Resort (POLR). However, <br />pricing will no longer be regulated by the Public Utilities Commission (PUC) and prices are <br />expected to increase. <br /> <br />During the past three years, our electrical costs have remained fairly steady. The total cost of <br />all electrical bills, by year, as are follows: <br />. 1998 - $943,606 <br />. 1999 - $943,597 <br />. 2000 - $968.745 <br />During the year 2000, this averaged out to $80,728 per month. <br />