City Extends Electric Service with AEP

AEP Energy 1A brief closed session, followed by a quick unanimous vote put an end to a six year quest for electric power after the City of Brownfield’s current contract ends in 2019.With that vote, the city entered into an electric service agreement with American Electric Power (AEP) for electricity after the 2019 switch from Xcel Energy.

Mayor Tom Hesse praised the contract and the work of the City’s administration in securing it. “That closes a six year process and we got a good deal,” he said. “Thank you Mr. Jobe and Jeff (Davis) for all of your work for the citizens of Brownfield.”

City Manager Eldon Jobe told the Brownfield News following the meeting that the contract terms are for seven years with options for extensions. “It’s a rolling deal that I expect will continue for a long time,” he said. “It’s a great deal for Brownfield and this was our best option after a lot of hard work and diligence by a lot of people.” Jobe was authorized to enter negotiations with AEP in June after the council selected that provider’s bid for the city’s electric needs out
of the five proposals submitted.AEP Energy

The resolution approved at that time indicated that qualified consultants came to the consensus that the city should enter into negotiations with AEP, based on its proposal for a partial requirements electric service agreement containing up to but no more than 15 percent wind power. As planned, the deal was reviewed by the City Attorney, then presented to the council for final approval.

Brownfield residents have purchased their electric power directly from their home city for decades, but the source of that power has been in doubt since 2010 when Xcel announced that its wholesale contract with the West Texas Municipal Power Agency would not be renewed in 2019. Since then, a myriad of potential power sources have been studied, including purchase agreements, power plant construction, even the creation — and demise — of a new governing body, the High Plains Diversified Electric Corp, a complicated deal that would have supplied  Brownfield and other South Plains cities with affordable power.

Jobe added that he doesn’t know if WTMPA will continue past 2019. “There is still a lot up in the air right now,” he said. “But we are working diligently to get the best deal for our rate payers.” Numerous moves by the City of Lubbock and its electric subsidiary, Lubbock Power and Light, have made the future of the WTMPA, made up of Brownfield, Lubbock, Floydada and Tulia, less than crystal clear. LP&L announced in 2015 that Lubbock would join the majority of Texans on the ERCOT grid in 2019, but Thursday’s move by the Brownfield Council indicates we will not follow that move.

Jobe said the cities of Tulia and Floydada passed identical resolutions in June to negotiate with AEP and the three communities will combine their purchasing power. “We have worked together for more than 30 years and we see value in staying together,” he said. In 2012, WTMPA and its member cities announced a deal that will provide up to 12 percent of their energy needs through wind power beginning in 2019 — but the cost of the deal has remained a secret.Power-lines-455x304

The deal with Florida-based Nextera Energy Resources to purchase power from a southwestern Oklahoma wind farm is still in effect, Jobe said. The secrecy in price is to protect Nextera’s market competitiveness in the interim. The price of purchased power sold by a utility is competitive in nature and is not considered open record, but officials said at the time of the announcement that the power was less expensive than current rates. Currently the agency pays about $30 per megawatt hour.

In the proposed deal with Nextera Energy Resources, the agency would  secure energy from the Elk City II wind farm in southwestern Oklahoma, a 48-turbine facility producing about 100 megawatts.

Article Courtesy of the Brownfield News

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