2012-291ORDINANCE NO. 2012-291
CONSIDER ADOPTION OF AN ORDINANCE OF THE CITY COUNCIL OF DENTON,
TEXAS AUTHORIZING THE CITY MANAGER TO PAY AND DEPOSIT THE SUM OF
$250,000 IN ESCROW WITH THE ELECTRIC RELIABILITY COUNCIL OF TEXAS
(ERCOT), AS FINANCIAL ASSURANCE REGARDING THE AUCTION OF CONGESTION
REVENUE RIGHTS AND PRE-ASSIGNED CONGESTION REVENUE RIGHTS
PURSUANT TO ERCOT NODAL PROTOCOL REVISION REQUEST (NPRR 400), TO BE
HELD BY ERCOT PENDING THE FUTURE CONGESTION REVENUE RIGHTS
AUCTIONS; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City is a member of and a market participant in the Electric Reliability
Council of Texas ("ERCOT") as it owns a municipally-owned electric utility, Denton Municipal
Electric ("DME") which is located in the ERCOT region; and
WHEREAS, through ERCOT "Nodal Protocol Revision Request (NPRR 400)" which
was approved by the ERCOT Board of Directors, and was filed by ERCOT with the Public
Utilities Commission of Texas ("PUCT"), and which NPRR 400 goes into effect on Novernber 9,
2012 and requires that its members provide financial assurance to ERCOT; and
WHEREAS, ERCOT seeks financial assurance from its members because of changes in
Federal law, namely amendments to the Commodity Exchange Act and the enactment of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173) legislation which
passed Congress in 2010; this legislation provides that the forward trading of commodities (such
as Congestion Revenue Rights and Pre-assigned Congestion Revenue Rights in the ERCOT
market) requires participants in these markets to provide financial assurance, in the form of cash
collateral or letters of credit to further secure their financial performance; NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The recitations in the preamble are true and correct and are incorporated
herewith as part of this Ordinance.
SECTION 2. The City Manager, or his designee, is hereby authorized to pay to the
Electric Reliability Council of Texas ("ERCOT") the sum of $250,000 as financial assurance to
further secure the City's financial performance to ERCOT, such payment to be held by ERCOT
pursuant to ERCOT NPRR 400.
SECTION 3. The City Manager, or his designee, is authorized to make the expenditures
above and to exercise all rights and duties of the City of Denton, Texas pertaining to said
deposit.
SECTION 4. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the �(P�� day of ��� , 2012.
M . B , MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By: �
APP OVED A TO LEGAL FORM:
AlVITA BURGESS, CITY ATTORNEY
By: