Title
Authorize the City Manager to execute an interlocal agreement for the provision of electricity for the City of Pflugerville with the General Land Office at the most favorable rate to the City within the next 60 days.
Summary
The City last procured electric service in July 2010 for a 24-month term beginning January 2012. Electric rates are currently favorable to contract for the City’s next service term, beginning January 2014.
A new method of procuring electric service through the State of Texas General Land Office (GLO) has been presented to the City. The GLO’s State Power Program uses “in-kind” natural gas royalties which are converted to electricity and then sold solely to Texas political entities. Revenues earned by this program are deposited into the Texas Permanent School Fund.
The agreement between the City and the GLO would be an interlocal agreement which allows the City to take advantage of the GLO’s competitive electric rates while eliminating timely bidding processes. The agreement has been reviewed and approved to form by the City Attorney. Per the GLO, the Attorney General has opined on several occasions that the GLO interlocal agreement is commercially sensitive and confidential and not subject to public disclosure pursuant to the Open Records Act. The agreement has been provided to the City Council for their review.
Another benefit to the GLO program is the elimination of gross receipts taxes (GRT) and Public Utility Commission (PUC) Assessment fees, which the City would have to pay with other retail providers. Preliminary pricing received from the GLO, adjusted for the reduction of these fees, has been very close to the City’s already low rate. Based on preliminary pricing received thus far, the City’s proposed rate increase, if any, is anticipated to be less than 3% or $23,000 across all accounts.
Electric prices are volatile and rates need to be acted on quickly, sometimes within hours. This necessitates Council authorization...
Click here for full text