Title
Discuss and consider action to authorize the City Manager to execute the First Amendment to Retail Sales Agreement, an interlocal agreement for electric service, between the City of Pflugerville and the General Land Office.
Summary
The City last procured electric service through an Interlocal Agreement with the General Land Office (GLO) in July 2013 for a 40-month term beginning January 2014. Electric rates are currently favorable to extend the current agreement for an additional term, beginning May 2017.
The benefit of an interlocal agreement between the City and the GLO is the City can take advantage of the GLO’s competitive electric rates while eliminating timely bidding processes. The amendment agreement has been reviewed and approved as 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 amendment agreement has been provided to the City Council for their review.
Another benefit of utilizing 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. While the price of electric service changes daily, preliminary pricing received from the GLO reflects a possibility of reducing the rate by close to one cent per kWh from our current rate. The effect of this reduced rate could provide more than $100,000 in annual savings, or 13%, over the City's current annual kWh costs.
Electric prices are volatile and rates need to be acted on quickly, sometimes within hours. This short time frame necessitates the ability for quick action, which can be accomplished by approval of this item providing the City Manager authorization to execute the extension of the current interlocal agreement on behalf of the City within the next 60 days.
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