Texas Renewable Energy Co-op gets wholesale bids at less than 3 cents a kilowatt-hour
Energize Weekly, May 8, 2019
The Texas Renewable Energy Co-op (TREC) has received wholesale electricity bids for less than 3 cents a kilowatt-hour on 12-year contracts for its public non-profit participants, such as municipal and state agencies.
The bidding process was managed by the Texas Energy Aggregation (TEA), which was created in 2002 to improve market power for universities, cities, counties and state agencies.
TEA had been selected by the Texas Comptroller’s Statewide Procurement Division to handle a new “renewable purchasing solution” sponsored by the State Energy Conservation Office (SECO).
“Subscribers to TREC can now leverage 100 percent renewable power from specific facilities and, depending on your location, for less than 3 cents,” Mike Bendewald, managing partner of TEA, said in a statement.
The low prices may be harder to find as federal renewable energy tax credits begin to ratchet down next January, Bendewald said.
“We have carefully designed a fully de-risked, wholesale renewable product,” Bendewald said. “Customers can continue to purchase their retail grid power in shorter increments, while benefitting from fixed-cost renewable power in longer terms for increased budget certainty. It satisfies both the environmental and budget concerns of tax payers.”
Rather than the traditional approach of starting with a retail energy provider, TREC was designed by the end users.
“State agencies told us they wanted cleaner generation without extra cost,” TEA President TJ Ermoian said in a statement “We worked with the guidance of SECO and the Comptroller’s Office, meeting with state agencies and gathering the anchor subscribers. We then sought out financial backers for the best wind and solar projects to match the base load profile of the subscribers.”
Ermoian said that developers see these credit-worthy public agencies and institutions as desirable customers.
Letters of interest have been signed by 20 public entities in Texas, each representing more than 150 megawatts of minimum electricity load. This includes some of the largest cities, universities, hospitals and school districts in the state, TEA said.
“If any entity has 7 years or less on their contract, they just need to get us a non-binding Letter of Interest soon,” Ermoian said. “We will close this first aggregation in early July.”
The most qualified suppliers will be selected by the end of May, and TEA said it already has smaller cities and school districts in place for a second aggregation later this year.
TEA has since its inception, 17 years ago, procured more than 5,000 energy contracts for more than 1,500 public and commercial entities.