HARLINGEN — Every year, it takes more than $1 million to power the city — and the price tag gets bigger with every street light going up.
This year, the state’s electric grid tacked on an extra $649,128 charge to foot the bill for six days of power during February’s historic deep freeze.
Now, officials here are shopping for a better deal.
Thursday, city commissioners are set to meet to review proposals from power companies and consultants as they plan the city’s next big energy contract.
“We’re just looking for the best option for the city,” Assistant City Manager Gabriel Gonzalez said Wednesday. “We want to make sure we get the best value for the citizens of Harlingen.”
As part the deal, officials are looking for a power company that will protect the city against mind-boggling electric bills like the Electric Reliability Council of Texas’ $649,128 tab, he said.
“We want to make sure in the future we safeguard against those costs,” Gonzalez said.
For more than 10 years, the city has contracted with TCAP, now charging $1 million for the 26 million kilowatt hours it takes to run the city, the WaterWorks System and Valley International Airport every year.
In December 2022, the company’s contract expires.
During Thursday’s workshop, commissioners are set to consider proposals from TCAP while reviewing others from TXU, which quoted a price of $989,944 for a 101-month contract, and Direct Energy, which offered charging $979,680 for a 108-month contract.
Meanwhile, commissioners are expected to review a list of about three energy consultants after seven firms presented proposals with costs ranging from $30,000 to $50,000.
During an Aug. 18 meeting, City Manager Dan Serna recommended commissioners turn to the state’s BuyBoard, a purchasing cooperative of state-approved vendors, to pick a power company offering a 48- to 60-month contract.
“The longer the term, the better the rate,” Serna told commissioners during the meeting.
Commissioner Michael Mezmar stood behind the recommendation.
“The Buyboard, generally speaking, if not exclusively, offers you the lowest prices without going out for bidding,” Mezmar said. “It’s a dynamic market that fluctuates by the minute. One has to strike a deal when the deal is hot. For us to spend another month or so bickering in prices that fluctuate daily and quotes — I think that’s a silly game.”
During heated debate, Commissioner Richard Uribe said he wanted to advertise for proposals from electric companies.
“You let them compete,” he said.
During discussions, Commissioner Frank Morales proposed commissioners interview consultants who would oversee the city’s next energy contract.
“We get a consultant, he’s going to be an expert … that’s going to make sure we’re going to get good service and our energy bills are audited monthly,” he said. “I don’t think we have the staff to do that on a monthly basis.”
A consultant, he said, would protect the city from paying exorbitant costs like ERCOT’s bill.
“If we get a consultant, we make sure they’re liable for a mess up like this,” Morales said, referring to the mammoth bill.
Meanwhile, commissioners have agreed to pay ERCOT’s bill “under protest.”
So far, the city’s sent GEXA Energy, a Houston-based retail power provider, two payments of $22,117 toward ERCOT’s $649,128 charge, Kareem Abdullah, the city’s deputy finance director, stated.
In May, GEXA billed the city $649,128 to cover ERCOT’s charges based on unrestricted record rates from Feb. 14 to 20.
During the storm that dropped temperatures below freezing, factors including frozen gas pipelines led electricity generators to pump insufficient power into the state’s electric grid.
So ERCOT turned to “ancillary” electricity providers, who charged $25,000 per megawatt because the industry doesn’t require them to keep costs at the state’s cap of $9,000 per megawatt.
Through the storm, power outages blacked out much of the state as ERCOT ordered AEP Texas and the state’s electric companies to pull power from the electric grid to avoid overloads that could damage the network made up of power lines.
