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WACO, Texas, Feb. 19, 2019 The Texas Power Pool has received sufficient Letters of Interest to surpass its initial 100 megawatt goal, placing taxpayer-supported public entities within striking distance of a 3-cent per kWh target price to procure 100% Texas-produced renewable wholesale power.
At least 16 entities have submitted non-binding Letters of Interest, including several of the largest cities, school districts, universities, medical centers, and state agencies in Texas. Interested participants will receive bids from renewable generators, but are not required to accept any offers.
The Texas Comptroller's Statewide Procurement Division released an RFP, with the assistance of the State Energy Conservation Office (SECO), selecting the Waco-based Texas Energy Aggregation (TEA) to help public entities source power, including pooled access to longer-term renewable power purchase agreements. TEA released the RFP for the wholesale renewable portion of the pool on February 15. Texas Power Pool is the first new Statewide purchasing option available to public entities to be built around an aggregated wholesale renewable energy buy.
"Wind and solar power are now far cheaper than grid power, but hitting a 3 cent per kWh target takes a large-scale buy, with credit-worthy off-takers, on contracts for 12-plus years," states TEA President, TJ Ermoian. "We are confident we can offer a spectacular value that will satisfy both budgetary and sustainability goals, because money is the greenest thing most people understand."
Dub Taylor, Director of SECO said, "Public entities want low cost power and predicable long term pricing. Like many large corporations and businesses, they are expressing an increased desire to tap Texas' abundant renewable energy resources. We believe that the Texas Power Pool will continue to grow and drive down prices for everyone in the pool."
Mike Bendewald, COO for Texas Energy Aggregation, says "An unusual benefit of this contract is it can immediately provide sustainability benefits and begins delivering financial benefits on the customer's next retail power contract, even if the current contract extends years into the future. We anticipate that soon, more public customers nationally will demand similarly de-risked renewable purchase agreements."
Responses to the RFP for wholesale renewable power are due by late April. TEA anticipates more Letters of Interest before April. As milestones are achieved for additional megawatts, pricing will be further discounted for all members.
Media inquiries, contact TJ Ermoian, TJ.Ermoian@texasenergyabc.com, 254-723-2231
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Texas Energy Aggregation announced the formation of the Texas Power Pool, a new power purchasing option for Texas public entities to utilize aggregated renewable energy. Texas Power Pool services include competitive procurement of utility-scale renewables and on-site solar for state agencies, higher education, cities, independent school districts, water districts, and other public entities across Texas, including cooperative and municipal utility regions. The services are enabled by a Texas Comptroller's Statewide Procurement Division contract awarded to Texas Energy Aggregation. Interested public entities can learn more from the State Energy Conservation Office (SECO).
Public entities have been slow to take advantage of renewables' financial value
Corporate energy users in Texas like Dow Chemical, Exxon-Mobil, Shell, and large municipal entities like the City of Houston have been procuring wholesale renewable wind and solar to reduce costs, hedge against energy price volatility, and achieve sustainability goals. According to the Business Renewables Center, 2018 was by far the most prolific year yet for corporate renewable deals. Public entities such as cities, schools and universities certainly have an increasing appetite for renewables, but have been slow to cash in on the green energy boom, often lacking the expertise or economy of scale to achieve a price below traditional grid power.
With projected rates below three cents per kilowatt-hour, competitively procured wholesale renewables are the lowest-cost purchasing option available in more than a decade. In sharp contrast, many retail energy contracts offer a "100% renewable" alternative at a higher cost by simply purchasing Renewable Energy Credits (RECs). "Faced with budget shortfalls, public entities are now aggressively seeking new ways to reduce costs," says Texas Energy Aggregation President, TJ Ermoian.
Texas Comptroller’s Office supports strategic power procurement
The Texas Comptroller's Statewide Procurement Division is the central state organization for purchasing and, with the assistance of SECO, issued a request for proposals for electricity sourcing services that included renewable power purchase agreements. Through a competitive bidding process, the Comptroller's office selected the Waco-based Texas Energy Aggregation to offer electricity procurement services. SECO was later involved with Texas Energy Aggregation in naming these services the Texas Power Pool. Texas Energy Aggregation is an electricity consulting firm working in partnership with the non-profit Rocky Mountain Institute (RMI), which seeks to accelerate the global transition to clean energy use and is providing technical and convening assistance.
"Power purchasing in Texas has changed, but not so much for public entities," explains Ermoian. "Wind and solar are the new disruptors to the energy industry, offering the lowest-priced generation, but it takes specialized experience and aggregated loads to achieve the scale necessary to get below three cents per kilowatt-hour. We are exceptionally fortunate to have the help and support of SECO and RMI."
"Solar energy offers a compelling value proposition to consumers in Texas, and across the country," Kevin Brehm, a manager at RMI, states. "Aided by increasingly favorable economics, this clean, reliable, renewable resource can provide compelling monetary, environmental, and grid benefits to a wide range of buyers. We are pleased to partner with Texas Energy Aggregation to expand the market for solar energy and provide these services to a greater number of Texans."
Business-as-usual has been costing taxpayers millions
When Texas chose a competitive electricity market in 2002, many public entities selected an approved purchasing program to help them navigate their first energy contracts. Many have continued to utilize the same program without shopping other options. Loyal customers are often shocked to learn that some of the most widely-utilized programs do not competitively bid for energy retailers or wholesale energy supply for best pricing. Programs have also failed to offer competitive renewables procurement.
Lack of competition and transparency were two reasons targeted by the legislature (start at 2:02:20) that customers may be overpaying. Some contracts still demand complete confidentiality and prohibit users from divulging fees, contract terms, and rates, and even instruct customers on how to fend off Freedom of Information requests. Ermoian asks, "If they offer such great rates, one would want to crow about their successes, right? Competition is good. These are often multi-year, multi-million-dollar contracts with no transparency. Texas taxpayers deserve to know if they are getting the best deal."
The Texas Power Pool addresses the shortcomings of widely-utilized energy purchasing programs
Texas Energy Aggregation has represented over 100 municipal customers, been awarded five separate interlocal electricity purchasing agreements, advanced consumer protections, and won two national awards. Ermoian is especially passionate about schools and their budgets, asserting, "Many in my family are educators, and I understand the financial sacrifices they make for their passion and calling. Truly competitive energy purchasing will help keep more dollars in our schools."
Mike Bendewald, Chief Operating Officer with Texas Energy Aggregation, served over 9 years at RMI where he managed a grant to procure community-scale solar for public entities in Texas. He now manages the Texas Power Pool, leading customer engagement and contract structuring. Texas Energy Aggregation's consultant, Dan Seif, also came to Texasfrom RMI after co-founding RMI's Business Renewables Center. More than 90% of the utility-scale renewable power purchase agreements negotiated nationwide over the last few years have been obtained by members of the Business Renewables Center.
"There is a short window of opportunity in the market to capitalize upon federal renewable energy tax credits which begin ramping down in 2020," affirms Bendewald. Texas Energy has begun the process of collecting letters of interest from the largest state and other public entities, which already includes some of the largest state agencies, cities and schools. These non-binding endorsements of common goals will be used to release a request for proposal by the end of first quarter 2019 to lock in a firm price. "Once we can guarantee a rate under 3 cents per kilowatt-hour, we anticipate additional participation that will further drive down the cost for all participants," Bendewald explains.
Participants with existing energy contracts as far out as 2028 may qualify for additional rate discounts or upfront cash bonuses. This does not cancel or affect an entity's existing contract in any way. Bendewald summarizes, "Current market conditions, technology and tax credits are making unheard-of opportunities available to public entities. Any entity seeking long-term budget certainty, lowest price, or sustainability goals should sign a letter of interest as quickly as possible to get these deals booked in 2019."
By Mike Bendewald
Colleges and universities across the country are increasingly interested in purchasing renewable power. With falling technology prices and growing student interest, renewable power is fast emerging as a discussion topic among sustainability, facilities, energy, and finance officers. This is the case especially in Texas, where abundant solar and wind resources make the generation cheaper than elsewhere. To advance the discussion further, recently a group of colleges and universities gathered for a workshop at the LeCroy Center of the Dallas County Community College District (DCCCD).
The Texas Higher Education Renewable Energy Consortium—consisting of DCCCD, Texas A&M, Alamo Colleges, and University of North Texas—hosted the workshop for Dallas area institutions to understand resources that are currently available and to advance their understanding of the economics and contracting options. The workshop, which was run by Texas Energy Aggregation (TEA) through a contract with the Comptroller's Statewide Procurement Division, offered a compelling case for renewables:
“The consortium was first created in 2017 during a higher education sustainability conference, because we each had an interest in renewable energy but really had no clear path to move forward,” DCCCD Executive Administrator of Sustainability, Georgeann Moss explained, “so we formed the consortium and began working with TEA.” The workshop is the first of a series of webinars and workshops planned to educate colleges and universities. A recording of the first workshop is available from DCCCD. Moving forward, the consortium will be a committee under the Texas Regional Alliance for Campus Sustainability (TRACS), which has a mission to advance sustainability in Texas higher education.
TEA is the sole-selected provider of the Texas Power Pool, offered through services under the the Texas SmartBuy Contract 961-M2 awarded by the Texas Comptroller of Public Accounts Statewide Procurement Division. Current TEA staff and advisors have extensive backgrounds in renewable energy procurement, including the creation of the Rocky Mountain Institute’s Business Renewables Center.
TEA is available to help your institution navigate renewable energy procurement.
Bendewald is a veteran in the clean energy industry, working 10 years at Rocky Mountain Institute.
Texas Energy Aggregation, LLC (“Texas Energy”) is pleased to announce the hire of Michael (Mike) Bendewald, who joins senior leadership as chief operating officer. Mike comes to Texas Energy from Rocky Mountain Institute, a globally renowned non-profit focusing on the transition of energy use to renewable energy and energy efficiency. Mike will oversee the operations of Texas Energy, and will help State entities, schools, cities, universities, and others reduce energy costs and improve budget certainty.
“For the first time ever, Texas State agencies and other public entities who use the State energy contract have a clear method to compare and procure long-term, wholesale renewable power,” Texas Energy President and Founder TJ Ermoian said. “We are tremendously excited to bring Mike onboard to boost our collective experience and expertise with renewables, and to strengthen our ongoing partnership with Rocky Mountain Institute, which is the premier think tank for charting the path toward a clean, prosperous, and secure energy future.”
Mr. Bendewald’s work at Rocky Mountain Institute included U.S. commercial real estate consulting and education, launching a zero-carbon real estate development program in China, and managing a program that helps rural cooperative utilities buy more solar. Mr. Bendewald has also guest lectured for several years at University of Colorado Leeds School of Business. Texas Energy and Rocky Mountain Institute are currently partnering on a request for proposals for solar photovoltaics and battery storage, on behalf of seven Texas electric cooperative utilities and University of North Texas.
“The Texas electricity marketplace offers the perfect setting to use the competitiveness of renewable energy to reduce energy costs,” Bendewald said. “I am very excited to join Texas Energy, which as the State-selected vendor is in perfect position to help State agencies and other public entities reduce energy cost burden and get on the path to a highly renewable future.”
About Texas Energy Aggregation. Founded in 2002, Texas Energy Aggregation has served the State of Texas through the electricity sourcing services contract since 2011. Netting taxpayers over $54 million in electricity savings for the four largest State agencies, Texas Energy has also saved millions of dollars for school districts, universities and municipalities. In 2014, Texas Energy was voted #1 in the nation for ethics, innovation, customer service and contract negotiation by The Energy Professionals Association. Over the course of three legislative sessions, Texas Energy founder TJ Ermoian spearheaded legislation and eventually shepherded passage of HB 1064, which has saved millions of dollars annually for small businesses, schools, churches, athletic and performing arts facilities throughout Texas.
Read the latest "State of the Electric Utility" HERE.
TEXAS COMPTROLLER AWARDS ELECTRICITY SOURCING SERVICES TO TEA, GIVES NOD TO RENEWABLES INCLUDING SERVING REGULATED AREAS