Under the agreement, more than 150 members of the Cities Aggregation Power Project (CAPP) and its sister organization, the South Texas Aggregation Project (STAP), can insulate municipal budgets from potential energy price spikes due to natural gas commodity price volatility.
Based on CAPP’s conservative projections, the resulting reductions in energy spending by member governments could lead to more than $10 million in taxpayer savings in 2009 alone, and hundreds of millions of dollars of savings over the life of the contract.
This long-term contract is expected to limit energy price increases, provide competitive prices for members of CAPP and STAP who choose to participate and will add greater energy price stability to potentially volatile market prices. A product of years of planning, the agreement is believed to be the first of its kind in the US.
Jay Doegey, CAPP chairman, said: Traditionally, CAPP has been limited by one- to two-year electricity contracts. However, with this groundbreaking 24-year agreement, we can offer our member cities even greater savings and budget predictability for more than two decades into the future.
