The City of Dallas has entered into a new electricity contract with TXU Energy to power all city facilities with wind and solar energy for 10 years.
The city will initially draw power and renewable energy credits from the Foard City Wind Farm in west Texas. TXU Energy has also agreed to source some or all the city’s power from future renewable energy assets developed in north Texas, if possible, at no additional charge. The contract also provides $1.5 million for energy-related projects and $300,000 for community programming.
Beginning June 1, the deal will enable a 26% lower energy rate than that of the previous contract, according to city officials.
“This is a great deal for Dallas,” says Errick Thompson, the city’s director of building services. “With significant tax revenue reductions looming, it is very important to find opportunities to reduce expenses. Our open and competitive process delivered 10 years of budget certainty and 100 percent renewable energy at a very market-competitive cost.”
Tradition Energy, Dallas’ independent procurement advisor, conducted a reverse auction that delivered multiple offers from retail electricity providers that were more advantageous than any unsolicited informal proposals presented or marketed to the city in the past year. The projected contract is valued at $472.6 million, including both the energy costs and regulated Oncor transmission and distribution costs.
The new contract is expected to save nearly $80 million in energy costs over the 10-year term compared to the current contract. This includes a projected $3.66 million savings in the current budget year between June 1 and Sept. 30 and $7.85 million projected savings annually in the next budget year and beyond.
According to Tradition Energy, the contract will deliver more than 750 million kWh of electricity per year.
“Not only have we helped the city achieve their sustainability goals and dramatically reduce costs, but this new contract will also provide budget certainty in the highly volatile ERCOT market for many years,” says Michael Ayala, executive director of Tradition Energy.
