Frequently Answered Questions
What is the Texas Coalition for Affordable Power?
Texas Coalition for Affordable Power (“TCAP”) is a non-profit political subdivision corporation established by the 2010 merger of Cities Aggregation Power Project, Inc. (“CAPP”) and South Texas Aggregation Project, Inc. (“STAP”), both created in 2001 to aggregate members’ power needs in order to negotiate better electric prices for their members. TCAP is one of the largest political subdivision aggregation groups in Texas with political subdivision members that purchase approximately 1.3 billion kWh annually.
What is aggregation?
Aggregation is the legal relationship, created by legislation deregulating the electric market, which joins together two or more customers for the purpose of purchasing electricity. In a competitive market, the buying group uses its large combined power requirements as bargaining power to secure lower or more stable electric prices than an individual customer would likely be able to obtain on its own.
How does aggregation benefit customers?
Aggregating the electric needs of several customers generally means that each member will pay less for electricity and obtain more favorable contract terms from a retail electric provider than if the member was contracting separately for its own electric needs. This is because aggregation is essentially volume purchasing – which reduces risk and lowers transaction, operation, and advertising costs for retail electric providers. The savings generated by the arrangement are passed on to the aggregated load in the form of lower electric prices. Sophisticated aggregation groups like TCAP retain consultants to assist members with market related problems. TCAP consultants advise the Board of Directors on ways to improve efficiencies, reduce price volatility and other risks, and develop long-range planning to reduce and stabilize power costs.
Who is eligible to join TCAP?
Membership is available to all political subdivisions whose load profile does not cause significant deterioration of TCAP’s overall load profile. For example, an eligible political subdivision may include a county, city, water district, housing authority, river authority, airport, or port authority.
Is there a cost for membership?
There is a one-time New Membership Fee equal to the greater of (i) $0.05 per capita of the resident population of the Member or (ii) one-half (1/2) of one percent (1%) of the prior calendar year’s total electric bills, not to exceed $14,000. Also, TCAP members pay a per kWh aggregation fee that is set annually by the Board of Directors. Funds raised through the aggregation fee are used to: pay attorneys, energy and public relations specialists; develop and provide interactive web portals for members use; maintain web sites; and promote market reforms that would benefit political subdivisions and their residents.
What are the benefits of membership?
TCAP members not only enjoy increased yearly savings, but also are able to estimate their budgets with more certainty. TCAP has created a unique arrangement that provides some relief from traditional energy pricing in the Texas market, and is the only political subdivision aggregation group to procure power for its members in this manner. In addition, members may use TCAP’s experienced legal and energy consultants to evaluate energy purchase options, investigate and resolve billing disputes and switching problems, and provide insights into the complicated deregulated energy market. Please see the Benefits of TCAP Membership document for additional details regarding advantages of membership.
How does TCAP benefit taxpayers?
TCAP member cities are able to create better, more fiscally responsible budgets because of the stable and predictable energy costs available to TCAP members. Taxpayers benefit because cities do not have to cut services or pass higher energy costs on through higher taxes when electricity rates experience volatility and spiking due to fluctuating market prices.
How is TCAP governed?
TCAP is run entirely by its members. TCAP’s 15-person Board of Directors, consisting solely of member city employees, is elected by its members to govern the organization. Board membership is structured to ensure that both large and small members are represented and the Board of Directors meets once per month throughout the state. The Board’s guiding purpose and objective is to pursue low cost power options for members while maintaining price stability with minimal risk that could impact the annual city budgets of members. Its secondary objective is to advocate market reforms that enhance competition for the benefit of all consumers.
Is TCAP a responsible environmental steward?
Absolutely. TCAP is continually evaluating all options for procuring power to meet the needs of Texas political subdivisions. Renewable and sustainable energy options are an important component of a balanced energy portfolio. In addition to the substantial renewable component built in to the TCAP power supply agreement, members are afforded the option to voluntarily purchase Renewable Energy Credits through TCAP to support the development of renewable energy in Texas. TCAP will continue to investigate developing opportunities to diversify its energy sources.
Is TCAP working to improve competition in the Texas electric market?
Yes. TCAP advocates on behalf of electric customers during each legislative session. Over the course of the past sessions, the coalition sponsored dozens of different bills intended to improve electric deregulation in Texas. TCAP also promotes consumer interests before the Public Utility Commission and other organizations overseeing the Texas electric market.