by BRAD ROLLINS
After decades of dependence on the Lower Colorado River Authority, the city of San Marcos is negotiating a contract with Florida-based NextEra Energy Inc. to buy wholesale wind- and natural gas-generated electricity.
The proposed three-year contract will save the average residential customer 1.27 percent, or about $1.12, a month on the fixed cost portion of electric bills, the city’s utilities chief, Tom Taggart, told the city council last night. The fixed portion of an electricity bill covers the city’s electric distribution charge, sales tax and franchise fee but does not cover the actual cost of energy, which fluctuates with fuel costs and other market conditions.
The city analyzed the impact of the proposed NextEra contract on its 10 largest commercial customers and determined they would save between 1.5 percent and 3.46 percent month, Taggart said. Texas State University, by far the city’s largest utility customer, stands to save $4,903 on its monthly utility bill (1.54 percent); other large industrial and commercial customers like the HEB Distribution Center (1.5 percent), Embassy Suites hotel (3.43 percent), Butler Manufacturing (3.07 percent) and Central Texas Medical Center (3.5 percent) would also save hundreds to thousands a month.
About 46 percent of the electricity NextEra makes in Texas is generated by wind at facilities like the Horse Hollow turbine farm near Abilene; the remaining 54 percent is fueled by natural gas at plants in Forney and Paris.
The council has been working quietly for months to secure an supplemental electricity provider that utilizes alternative fuel energy sources. It issued a request for proposals earlier this year and staff recommended pursuing an agreement with NextEra, formerly Florida Power & Light Company.
The actual proposed contract is still under wraps but Taggart’s presentation to the council this week outlined broad parameters of the negotiation.
In 1986, the city purchased the transmission lines and other facilities that now make up San Marcos Electric Utility from the Lower Colorado River Authority but continues to buy essentially all of its electricity wholesale from the authority. A wholesale agreement struck with LCRA in 2010 allows the city to buy 10 percent of its power from other sources and that alternative source portion can be increased 5 percent a year up to a total of 35 percent.
NextEra also owns the world’s largest solar power plant, located in the California’s Mojave Desert, and the Seebrook Station nuclear plant in New Hampshire.