The city of Georgetown is seeking proposals to manage the city’s energy portfolio and complete a comprehensive review of the city’s management practices in purchasing and managing energy, according to a news release issued Friday evening.
The city lost $21.8 million on its wind and solar contracts from 2016 to 2018 due to the falling prices of oil and gas, according to figures provided by City Manager David Morgan. Georgetown is renegotiating its 20- to 25-year wind and solar contracts to try to get a better deal, Morgan has said.
When the city signed wind and solar contracts around 2012, it was looking at long-term demands and contracted for more energy than it needed, he said.
General Manager of Utilities Jim Briggs said Georgetown’s current process for managing energy is not achieving the city’s goals.
“Along with selling a portion of the excess energy to a third party, we look forward to working with industry experts in identifying ways to better manage the energy portfolio day to day and putting in place policies and procedures that reduce our financial risks moving forward,” Briggs said.
To help recover some of the costs of purchasing energy, the city raised the monthly electric bill for the average customer by $12.82 starting Feb. 1.
Securing long-term energy contracts that provide more energy than customers currently need is a standard practice among city-owned utilities, the city’s release Friday said. “It is important to note that it is not the type of energy the city has contracted for but the amount of energy the city is contracted to purchase that is the current challenge,” the release said.
Bill Peacock, vice president of research for the conservative Texas Public Policy Foundation, has criticized the city’s decision to buy extra energy it couldn’t use.
“It is good that the city is beginning to acknowledge the problem it is facing,” Peacock said Friday. “However, all the consultants in Texas can’t undo the multimillion-dollar harm to the residents of Georgetown caused by the city’s relentless, and futile, pursuit of being 100 percent renewable at any cost.”
The foundation has an ongoing lawsuit against Georgetown filed on behalf of a resident wanting information on how much energy is produced by solar panels on a city building.
Georgetown has contracts to purchase energy from four providers, according to the release. They include Spinning Spur 3, a wind farm near Amarillo; Buckthorn, a solar farm near Fort Stockton; American Electric Power, a wind farm that provides energy for Southwestern University; and Mercuria, a natural gas provider, the release said. The natural gas contract is set to expire in early 2022.
The release said the city’s original strategy was to keep costs down by contracting for fixed-priced renewable energy.
“Looking back, the focus ensuring adequate supply to mitigate the high price of energy that was forecast overshadowed the consequences of having excess energy in a depressed market,” Morgan said. “The city did not manage this risk well. We are focused on changing the way we do business as it relates to managing our energy portfolio.”
The city-owned utility also has been affected by a drop in consumer demand driven by conservation efforts, energy-saving technologies and more energy-efficient new construction. Those factors caused the city to end fiscal 2018 with a $6.84 million shortfall in the electric fund, leaving the fund with a balance of $1.97 million, the release said.
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