Title
Discuss and consider action to approve authority for the City Manager to finalize electric supply contract with a supplier for a 48 month term beginning June 2027 at a price per kWh not to exceed $0.0615 for electricity supplied to the City's municipal facilities and operations.
Summary
The City's current Commercial Electricity Service Agreement is with Direct Energy. This contract was originally procured through Texas Association of School Boards (TASB) Energy Cooperative for 84 months (7 years) effective June 2020 and ends May 2027 at a rate of $0.03358 per kWh.
The City decided to publish a Request for Proposal for a Comprehensive Energy Consultant to provide procurement services, along with other management services in an effort to achieve cost savings, cost effective pricing, and environmentally responsible services. In May 2026, the City selected Priority Power as the Comprehensive Energy Consultant. The consultant has spent several months collecting data on the City's electric loads along with all of the new load that will be added due to the new facilities.
The agreement between the City and Priority Power allows the City to competitively bid electric rates. Electric prices are volatile and rates need to be acted on quickly, sometimes within hours. This necessitates City Council authorization for the City Manager to take action upon receipt of favorable rates. Approval of this item would allow the City Manager on behalf of the City to procure the best electric rate. Price levels are at 24-36 month lows.
If approved by City Council, Priority Power will solicit final pricing on Nov. 12, 2026, provide a final contract for City Manager to execute with a term of 48/ months and a price not to exceed $0.0615 per kWh, and be prepaid to enroll all City accounts with new provider for a June 2027 contract start.
Prior City Council Action
May 26, 2020 City Council approved an Interlocal agreement with TASB and authorized the City Manager to execute an electric contract.
Deadline for City Council Action
Approval is needed by November 10, 2026 to lock in rates
Funding Expected: Revenue __ Expenditure __ N/A _X_
Budgeted Item: Yes _X_ No __ N/A __
Amount: $2,710,250 (across all funds)
1295 Form Required? Yes __ No __ (will be provided with final contract)
Legal Review Required: N/A __ Required _X_ Date Completed: __10/29/2026______
Supporting documents attached
Recommended Action
Approve as presented.