Nearly $800,000 in electricity rebate checks are being distributed this month to scores of cities and other political subdivisions — an unexpected summertime boon courtesy of the Texas Coalition for Affordable Power.
More than 85 percent of TCAP’s 169 member cities and political subdivisions will receive the checks. The disbursements varied from city to city, depending upon electric usage and other factors.
“This is yet another benefit of membership,” said Dr. Randy Moravec, TCAP executive director. “Unlike for-profit electric retailers, TCAP returns surplus funds back to members. TCAP’s beneficial electricity contracts also cushion cities against punishing electric market volatility that can wreak havoc on city budgets.”
TCAP is a non-profit coalition of cities that have joined together to purchase power in bulk for their own governmental use. Through the power of its numbers, TCAP negotiates competitively-priced energy contracts that also include important member protections. City officials oversee the non-profit coalition.
The reimbursements announced this week are not the first from TCAP — since 2010, the coalition has issued more than $5.3 million in refund checks. TCAP members around the Houston area, in South Texas and around the Fort Worth-Dallas Metroplex were awarded the most recent disbursements. The checks varied in size from a few hundred dollars to tens of thousands of dollars.
The City of Arlington has received more than $115,000 in refunds in 2013 alone and more than $350,000 since 2011. The city has used much of the money to retrofit municipal buildings with energy efficient upgrades, says TCAP Board President Jay Doegey, who also serves as Arlington’s City Attorney.
Corpus Christi has received $650,000 in refunds since 2011. Smaller communities have received smaller checks, such as the more than $10,000 disbursed to the City of Dickinson since 2011, and the more than $72,000 distributed to the City of North Richland Hills since 2011.
“Receiving an unexpected rebate is one of the great benefits of TCAP membership,” said Julie Johnston, City Administrator for the City of Dickinson. “Extra cash as we get into the final months of the fiscal year is always welcome, especially for cities with budgets to balance. Every little bit helps.”
The operator of the state’s power grid, the Electric Reliability Council of Texas, is charged with ensuring a constant supply of electric power is available to meet demand and avoid power outages. As part of its mission, ERCOT also procures important technical services in the wholesale energy market. The costs of these services are recovered through charges that are typically passed on to end-use customers in their energy rates. `
TCAP, thanks to the work of its expert consultants, has been able to secure credits when actual charges for these technical services were less than anticipated. This has resulted in millions of dollars in credits for TCAP over the last five years. The coalition holds back a certain amount to meet contractually-required reserves, and then refunds the rest back to members. This is in contrast to for-profit retail electric providers, who often retain this excess margin.
In addition, many members received refunds in 2011 when TCAP was formed through the merger of its two predecessor coalitions.
Many of the cities receiving refunds are located around Houston, Dallas and Fort Worth. TCAP member cities in West Texas did not receive refunds this year because of certain power transmission and distribution constraints relating to the architecture or the power grid. However, TCAP member cities in West Texas typically enjoy lower rates among TCAP members.
TCAP also provides members a number of other important services, including access to professional energy consultants and advocacy before the Texas Legislature and state regulators.
Because high energy costs can impact municipal budgets and the ability to fund essential services, TCAP, as part of its mission, actively promotes affordable energy policies. High energy prices also place a burden on local businesses and home consumers.
For more information about TCAP, or to learn how your city can become a member, go to tcaptx.com.