New Electricity Supply Contract to Save City Estimated $23.5 Million Over 9 Years

By Susan Schrock

Posted on July 11, 2016, July 11, 2016

The Arlington City Council has approved a nine-year retail electricity supply contract that will save the City an estimated $2.5 million a year.

In April, Arlington hired Priority Power Management, LLC to solicit bids from various electricity firms and help negotiate a contract for the City, which consumes more than 72.6 million kilowatt-hours of electricity a year.

Seven electric companies responded with bids. After negotiations, the council approved a nine-year contract on June 28 with TXU of Irving that will deliver an estimated $23.5 million, or 32.8 percent, savings in electricity costs over the term.

''We undertook a structured competitive bidding process, utilizing Priority Power Management''s advisory and consulting services, that delivered the best overall value to the City,'' said Mike Finley, Arlington''s Chief Financial Officer. ''This new contract achieves our goals of securing significant year-over-year savings and having budget certainty for a long period of time.''

As an added bonus, the contract also includes $150,000 of rebates available to the City to partially offset investments in energy efficiency upgrades. The new contract will begin in January 2018 and continue through December 2026.

''This contract was a great win for the City of Arlington,'' said John Bick, Managing Principal. ''We evaluated proposals from several qualified suppliers for various terms throughout the competitive bidding and negotiation process. Ultimately, we were able to negotiate and execute a contract that locks in all competitive retail electricity supply components at a very low price.''

PPM was engaged by the City of Arlington to provide customized strategic energy advisory, supply procurement and risk management services.