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, LLC (“Texas Energy”). The RFP awarded a four-year contract for electricity purchasing and consulting services for the largest State agencies, and may also be used by any public entity in Texas, including municipalities, school districts and universities seeking electricity consulting services.
This updated contract presents several significant new opportunities for public energy purchasers to choose their fuel source, including renewable energy generated on or off-site. Rapid technological advancements, along with tax credits, have made wind and solar energy cost competitive, and even customers with meters in regulated areas now have the ability to participate in the program.
Power Purchase Agreements. 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. 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 been involved in approximately 94% of corporate renewable energy transactions over the last two years.
On-site solar is now addressed in this contract and is another method to reduce energy consumption and perhaps more importantly, provide 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 with up to 30 minutes notice can capture a new revenue stream by participating in this statewide program.
