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HomeMy WebLinkAboutRES 041222-S - Energy Risk PolicyRESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS, ADPOTING THE AMENDED ENERGY RISK MANAGEMENT POLICY UNDER CHAPTER 13.38 OF THE CODE OF ORDINANCES AND THE ACCOMPANYING SUB -POLICIES, INCLUDING THE CREDIT POLICY, THE TRADING AUTHORITY POLICY, THE TRADING SANCTIONS POLICY, AND THE HEDGING POLICY; REPEALING CONFLICTING RESOLUTIONS; INCLUDING A SEVERABILITY CLAUSE; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, on December 10, 2019, the City adopted the Energy Risk Management Policy under Chapter 13.38 of the Code of Ordinances through Resolution No.121019-Y, and on January 11, 2022, the City amended the Energy Risk Management Policy through Resolution No. 011122- AB; and WHEREAS, the City has identified amendments to the Energy Risk Management Policy to better manage energy risk; and WHEREAS, the amended Energy Risk Management Policy contemplates that the City will adopt: (1) a policy to establish oversight and procedures to monitor, measure, and manage the City of Georgetown's counterparty credit risks ("Credit Policy"); (2) a policy to define the execution authority and trading limits for energy -related transactions ("Trading Authority Policy"); (3) a policy to articulate the consequences of violating the Trading Authority Policy ("Trading Sanctions Policy"); and (4) a policy to manage financial risk related to volumetric and congestion exposure ("Hedging Policy") (all policies collectively, "the Sub -Policies"); and WHEREAS, the Energy Risk Management Policy and Sub -Policies were developed by City staff, including the General Manager of the Electric Utility and the Finance Director, and outside consultants providing energy risk management support services; and WHEREAS, the Credit Policy provides guidelines to approve credit limits with counterparties, includes term restrictions for trading, establishes thresholds for collateral for agreements, limits trade and credit approvals, and designates specific authorities to approve credit matters; and WHEREAS, the Trading Authority Policy defines who has authority to execute trade transactions; the commodities and products that may be transacted; the authorized general terms for transactions; and the process for approving new transactions; and Resolution No. VV 4 r Page 1 of 2 Subject: Adopting Am nded Energy Risk Management Policy and Sub -Policies Date Approved WHEREAS, the Trading Sanctions Policy articulates the consequences of violating the Trading Authority Policy and the assessment methodology used to evaluate violations and develop sanctions; and WHEREAS, the Hedging Policy provides limits to manage financial risk related to volumetric and congestion exposure to spot market energy prices associated with the delivery of energy related to any wholesale power agreements needed to serve load obligations; and WHEREAS, the City finds that adopting the Sub -Policies will provide appropriate oversight and procedures to manage the City's energy risks. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN TEXAS: SECTION 1. The facts and recitations contained in the preamble of this Resolution are hereby found and declared to be true and correct, and they are incorporated by reference herein and expressly made a part hereof, as if copied verbatim. SECTION 2. The following policies of the Georgetown Electric Utility are hereby adopted: Energy Risk Management Policy, attached as Exhibit A, and the confidential Sub - Policies. SECTION 3. The Mayor is hereby authorized to sign this Resolution and the City Secretary to attest. SECTION 4. This Resolution shall become effective and be in full force and effect upon execution by the Mayor. PASSED AND APPROVED on the _-day of ATTEST: ,R�C ISMore, City Secretary APPROVED AS TO FORM: )J4 Skye Aasson, City Attorney 2021. Resolution No. Page 2 of 2 Subject: Adopting Amc ded Energy Risk Management Policy and Sub -Policies Date Approved