The City of Dallas entered into a new electricity contract with TXU Energy that will power all city facilities with renewable energy for 10 years — and at a 26% lower energy rate than the previous.
The historic renewable contract is the first time a local government of Dallas’ size has committed to a long-term strategy of sourcing 100% of its load from offsite wind and solar farms — including new sites not yet developed.
The city will initially draw power and renewable energy credits from the Foard City Wind Farm in West Texas and is interested in the development of new renewable generation in North Texas. TXU Energy has agreed to source some or all the city’s power from future renewable assets developed in north Texas at no additional charge. The contract also provides $1.5 million for energy-related projects and $300,000 for community programming.
“This is a great deal for Dallas,” said Errick Thompson, Director of Building Services for the City. “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% renewable energy at a very market-competitive cost.”
Tradition Energy, the city’s independent procurement advisor, conducted a reverse auction that delivered multiple offers from multiple 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 of the contract compared to the current contract. This includes a projected $3.66 million savings in the current budget year between June 1st and September 30th, and $7.85 million overall projected savings annually in the next budget year and beyond.
The Dallas City Council adopted the Dallas Green Energy Policy on April 10, 2019, and authorized City Manager T.C. Broadnax to secure a contract in line with the Policy.
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