Texas Cities cut Energy Deal with Direct Energy and FPL
The Fort Worth Star Telegram announced January 12 2009, that over 100 Texas cities have agreed to the terms of a new 5 year contract with Direct Energy and FPL. The cities have aggregated their buying power and look to lower their electricity bill by as much as $30 million. The group calls itself, “the Cities Aggregation Power Project”, (CAPP).
Keep in mind that electricity rates have doubled in Texas since 2000, these cities have chosen a good time to negotiate, with oil and gas prices sinking at the end of 2008 and beginning of 2009. The cities in question averaged 10.5 cents a KwH, plus distribution costs and administrative costs now expect to pay between 5 and 8 cents per KwH. Their location will dictate the final costs as West Texas has had the lowest prices in the state of Texas generally, while Houston and South Texas have had the highest historical prices.
A second group called, the ” South Texas Aggregation Project”, will also purchase electricity under similar terms. These prices will be locked in until 2014.The group chose this deal, over an earlier proposed one by Luminant, a Dallas based Energy Future Holdings, formerly TXU Corp. who had hoped to supply electric rates at an even lower price for 24 years. But, their were strings attached. It would have involved participants to issue long term bonds to help Luminant with some of the cost of some of it’s operations.
Geoffrey Gay, an Austin attorney for CAPP said “The ongoing financial crisis created too much uncertainty for such a long-term contract”.
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this is very gud work doing by texas cities….
ajay
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