Tonight at the Council meeting there was an interesting
development that may save the City tens of millions of dollars. Arlington is the largest of 171 members of
TCAP (Texas Coalition for Affordable Power).
Although we are the largest player we get no discount for the volume of
electricity that we use. I believe that
the citizens of Arlington should get the lowest price per kilowatt hour. That is my goal. Electricity prices are linked to the price of
natural gas. Therefore, if natural gas
is at a low then so is electricity.
Energy prices are as low as ever, and the way to get the lowest possible
price is not to use a sole provider, but to enter a competition with several
providers. That is why I voted to table
the continuation of talks with TCAP.
Currently we are paying 7.4 cents per kwhr. With the add-on charge it is 7.5 cents. We are caught in a 5 yr. contract with an
energy provider where we are paying twice the amount of today’s going rate. With todays cost of energy we should be
paying approximately 3.6 cents per kwhr for the same 5 yr. deal. My proposal at this evening’s meeting will
put the providers into a bidding war for our contract, and instead of coining a
5 yr. deal we should extend the contract to 9 yrs.
Our current 5 yr. contract cost is about $12 mil a
year. At a cost of 4.1 cents the cost is
$6 mil per year. TCAP states that they
can coin a contract for the 4.1 cents or lower, 4.2 with the add-on charge. I believe that the competition will give us a
cost of 3.7 cents on that 9 yr. deal. This will save the city approx.. $7 mil. per/yr.
and $63 million over a 9 yr. period.
Every contract that the city has is bid through the RFP process. (Ready
For Proposal) This process is awarded to
the lowest bidder. There will be a
bidding war for our contract, and the Arlington Tax Payer will be the ultimate
winner.