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Revamped State of Texas Electricity Sourcing Contract Gives Nod to Renewables

The Texas Comptroller of Public Accounts Statewide Procurement Division has awarded its Electricity Sourcing Services contract to the Waco-based energy consulting firm Texas Energy Aggregation for the second successive time. This 2017 contract also addresses many new opportunities for public customers including:

Off-site wind and solar. For the first time ever, public customers, including State agencies, municipalities, universities and school districts who use the State energy contract have a clear method to compare and procure long-term, wholesale renewable Power Purchase Agreements, or PPAs. These PPAs provide greater value in aggregated purchasing power, and Texas public customers can potentially secure some the lowest fixed energy rates of any state. Texas’ abundant sun and wind resources have made off-site, utility-scale renewable energy highly cost competitive with traditional power sources, and can provide an effective hedge against inflation and price volatility. Texas Energy has partnered with the non-profit Rocky Mountain Institute, whose experienced team and members have secured over 90% of the large-scale PPAs in the nation during the last 2 years, especially for Fortune 500 companies and university systems.

On-site solar is now addressed in this contract and is another method to reduce energy consumption and provides significant relief from escalating delivery charges by reducing peak demand. Largely due to the credit stability of public customers, private investors are eager to finance the entire cost of construction and capture federal tax credits for which non-taxable entities could otherwise derive no benefit.

Regulated areas. Even public entities in regulated parts of the state can now contract to lock in a portion of their electricity load for up to 25 years using on-and off-site sources of renewable power. By contracting a portion of their energy load on a PPA, entities located in municipally-owned and co-op areas can now increase budget certainty and reduce delivery charges.

Demand Response. Voluntary load curtailment, known as Demand Response, is also addressed in the new Electricity Sourcing Services contract as an option to capture an additional, unearmarked source of revenue. Customers with the ability to dispatch backup generation or curtail demand can receive a significant new revenue stream by participating in this statewide program.

Texas Energy won the previous State electricity procurement contract in 2011, with three subsequent extensions, netting taxpayers over $54 million in electricity savings for the four largest State agencies, and millions more for school districts, universities and municipalities.