Wednesday, February 24, 2016

TCAP (Texas Coalition for Affordable Power)

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.


  1. Good Afternoon Charlie,
    I'm an Energy Broker who's currently in negotiations for another Texas city that was a member of TCAP as well. Today, I was able to negotiate a 3.5 cent/per kWh for a 5 year contract per kWh. I'm certain the City of Arlington can receive an even better offer based on the fact that the usage is far more substantial than the City's kWh usage that I helped procure an agreement for today. Most suppliers are able to hedge out beyond 5 years due to the high risk involved in the ERCOT grid. I'd love to discuss with you further if you'd like. Feel free to contact me directly on LinkedIn:

    est Regards,
    Lindsay Jones

  2. I understand your situation and that is why I wanted to take this to an RFP solution. You will have an opportunity to make a bid for the contract in the future. No need for a meeting since I have met with plenty of brokers and REP's. This is what they wanted, a competitive atmosphere. I heard them and I hear you. The outcome will be good for the city and the taxpayer.

  3. Charlie, I believe you are on the right path here. Thanks for your efforts! The only caution I would have is extending the contract out with energy prices expected to go up in the later years the energy provider may not offer as lucrative price terms.
    But bidders and bids will tell!

  4. In the last 2 days I have seen 5 yr. contracts coined for 3.5 and 3.3 kwh. If I could get a 9 yr. contract for about 3.6 to 3.7, which I think is realistic, it would save the city about $63 mil over 9 yrs.


Thank you for your comment.