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