Title
Consider/Discuss/Act on a Resolution Authorizing the City Manager to Execute a New Contract or Renewal Agreement with an Energy Provider that will be Selected via a Bid Process with the Help of the City’s Energy Advisor, Energy by 5, for the Procurement of Electricity for the City beginning December 1, 2026
Summary
MEETING DATE: August 1, 2023
DEPARTMENT: Financial Services
CONTACT: Mark Holloway, Chief Financial Officer
Trudy Mathis, Finance Director
Kelvin Bryant, Investment & Treasury Manager
RECOMMENDED CITY COUNCIL ACTION: Approval of Resolution
ITEM SUMMARY:
• This Resolution authorizes the City Manager to enter into a new contract or renewal agreement with the bid -winning energy provider for the procurement of energy at a fixed cost for a period up to 60 months beginning December 1, 2026. This is for the remaining 2/3 of unhedged meters.
BACKGROUND INFORMATION:
• The City has previously entered into an agreement with Energy by 5 to work as an advisor, consultant and energy broker on behalf of the City.
• In 2018 Energy by 5 helped facilitate a future contract with TXU for 1/3 of the total meters while decreasing our base price per kilowatt hour (kWh) from $0.03697 to $0.03632 for December 1, 2026 through November 30, 2030.
• The electricity market has increased since the beginning of the Ukraine conflict, but has recently taken a 20% hit, since mid-March. With the Public Utility Commission adopting a Performance Credit Mechanism, now is the time to take advantage of the market dip.
FINANCIAL SUMMARY:
• Based on recent quotes of $0.05366 for 24 months, blending the current 2026-2030 rate of $0.03632 with the proposed 24 month offer from TXU would give a weighted average rate of $0.04499/kWh
• The TXU offer includes $10,000/year in Greenback dollar rebates.
• Price per kWh will be based on the refreshed market rate on day of bid
BOARD OR COMMISSION RECOMMENDATION: N/A