HomeMy WebLinkAboutR2006-021RESOLUTION NO. R2006- 02 /
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS
SUPPORTING THE EFFORTS OF THE TEXAS MUNICIPAL POWER AGENCY, A JOINT
POWERS AGENCY, TO OBTAIN COMPETITIVE RAIL TRANSPORTATION RATES FOR
THE TRANSPORTATION OF ITS COAL; PROVIDING AN EFFECTIVE DATE.
WHEREAS, the Texas Municipal Power Agency ("TMPA"), is a joint powers agency
formed under Texas law by the cities of Bryan, Denton, Garland and Greenville in 1975 for the
purpose of generating and providing electric power to its four (4) member cities; and
WHEREAS, in 1983, TMPA began commercial operations, generating electric power
from its Gibbons Creek Plant, near Bryan, Texas, utilizing locally-mined lignite coal for fuel;
and
WHEREAS, in an effort to obtain a cleaner burning and more economical fuel, TMPA
converted its fuel source from locally-mined lignite coal to Wyoming Powder River Basin coal
in 1996, and at that time began receiving coal transportation services from the Burlington
Northern Railroad, now the Burlington Northern Santa Fe Railroad (`BNSF"), to transport coal
from Wyoming to its Gibbons Creek plant near Bryan, Texas; and
WHEREAS, BNSF is the sole provider of rail transportation to the Gibbons Creek plant
near Bryan, Texas, and as a result, BNSF charges "captive" rates for transporting coal to TMPA,
in interstate commerce, that are significantly higher than those rates that are being charged to
similarly situated electric utilities that have access to more than one railroad; and
WHEREAS, TMPA has, among other options, tirelessly pursued contract negotiations
with BNSF, and has pursued rate relief before the Surface Transportation Board ("STB"), all of
which efforts have brought no significant relief to the captive rate charged TMPA; and
WHEREAS, TMPA expects to operate the Gibbons Creek Plant for at least thirty (30)
more years, and with potential plans for a second unit, the Member Cities could pay an estimated
300 to $800 million or more, over the next forty (40) to fifty (50) years if TMPA is
unsuccessful in lowering the rail transportation costs for coal; and
WHEREAS, our city is dependent upon competitive electric power rates in our
deregulated Texas electric market in order to sustain economic development and quality of life
and services for our citizens; NOW, THEREFORE,
THE COUNCIL OF CITY OF DENTON HEREBY RESOLVES:
SECTION 1 The City Council of the City of Denton, Texas urges Members of
Congress and U.S. Senators to work with the TMPA in its efforts to acquire a reasonable rail rate
for coal transportation services, and in turn, continue to provide the City of Denton, Texas with
electric power that is competitively priced with other Texas communities.
SECTION 2. This Resolution shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the dayof__i 12006.i PE
R.
McNEILL, MAYORATTEST:JENNIFER WALTERS,
CITY SECRETARY BY:Q~APPROVED
AS TO LEGAL FORM:EDWIN
M. SNYDER, CITY ATTORNEY
BY:S:\Our Documents\Resolutions\06\TMPA Coal Resolution-Railroad Transportation Rate-2006.