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Item 4I TXU Energy Contract Item 4I Good evening Mayor and City Council this item on the consent agenda is asking for your consideration of a TXU Energy Contract. 1 Requested Action Approve a contract with TXU Energy to provide electric services for the term of June 2018 to December 2027 More specifically the purpose for this item is to seek City Council approval of a contract with TXU Energy to provide electric services for the term of June 2018 to December 2027. 2 Background 2007 2011 2014 $0.0805/kwh 100% Traditional Energy $0.0685/kwh 10% Renewable/ 90% Traditional Energy $0.0498/kwh 25% Renewable/ 75% Traditional Energy For your information the City has maintained a fixed rate agreement to purchase electricity from TXU Energy since 2007, and has negotiated several new agreements since then when rates have become favorable to do so. The following agreements and subsequent rates shown on this slide have been made with TXU. Notice the focus to incorporate more renewable energy into each agreement as it made economical sense to do so. This also falls in line with one of our strategic corporate objectives to deliver city services through sustainable business practices.   Also, the current agreement is set to expire in May 2018. 3 Proposed Agreement Renewable energy Increases from 25% to 100% TXU has invited the City to be a part of a new program created for its more fiscally responsible customers that would allow the City to purchase all of its ONCOR provided electricity from a new solar energy plant (which is a renewable energy source). This slide shows the benefits of participating in this proposal. This program would be at a lower rate per kilowatt hour and for a longer term than has ever been offered to the City. The proposed contract would allow the City to secure a reduced rate for electric services when the current contract expires in May 2018. Taking action at this time will allow the City to establish a lower fixed rate for future energy costs while rates in the market are low. Electric rates have only been this low twice before since deregulation of the Texas electricity market occurred in 2002. City staff has been monitoring the market and talking with our benchmark cities to compare rates. Until this point staff has not seen a lower rate among other DFW municipalities. Staff recommends entering into an agreement with TXU Energy because their rate is the lowest to others that were quoted and it increases the percentage of renewable energy being purchased. TXU Energy’s ongoing level of customer service and responsiveness to the City’s needs has also been greatly appreciated. TXU has also been a great partner outside of just providing the City electricity. They provide trees to the City on an annual basis to beautify parks and open spaces, and have recently offered to provide the City electric auto charging stations in public spaces, which is currently being reviewed by staff. 4 City of Southlake Strategy Map Critical Business Outcomes CBO1 - Continue to implement Southlake 2030 Plan by focusing on short-term initiatives. CBO2 - Become an employer of choice by developing a plan to recruit, develop and retain employees committed to excellence. CBO3 - Develop long-term strategies to address future financial uncertainties and challenges. CBO4 - Improve mobility by proactively completing traffic analysis of key areas. CBO5 -Optimize resources through collaboration and partnerships to reduce costs and add service value. The City of Southlake provides municipal services that support the highest quality of life for our residents, businesses, and visitors. We do this by being an exemplary model of balancing efficiency, fiscal responsibility, transparency, and sustainability. Deliver on Our Focus Areas Performance Management & Service Delivery C1 Achieve the highest standards of safety & security C2 Provide travel convenience within City & region C3 Provide attractive & unique spaces for enjoyment of personal interests C4 Attract & keep top-tier businesses to drive a dynamic & sustainable economic environment C5 Promote opportunities for partnerships & volunteer involvement Serve our Customers Manage the Business B1 Achieve best-in-class status in all City disciplines B2 Collaborate with select partners to implement service solutions B3 Enhance resident quality of life & business vitality through tourism B4 Provide high quality services through sustainable business practices B5 Enhance service delivery through continual process improvement B6 Optimize use of technology Provide Financial Stewardship Promote Learning and Growth F1 Adhere to financial management principles & budget F2 Invest to provide & maintain high quality public assets F3 Achieve fiscal wellness standards F4 Establish & maintain effective internal controls L1 Ensure our people understand the strategy & how they contribute to it L2 Enhance leadership capabilities to deliver results L3 Attract, develop & retain a skilled workforce L4 Recognize & reward high performers L5 Empower informed decision-making at all levels in the organization C6 Enhance the sense of community by providing excellent customer service and citizen engagement opportunities L6 Foster positive employee engagement Performance Management & Service Delivery B4 Provide high quality services through sustainable business practices The proposed contract aligns with the City Strategy Map under the Focus Area “Performance Management & Service Delivery” and Corporate Objective “B4 Provide high quality services through sustainable business practices.” 5 Questions? Ben Thatcher at 817-748-8005 6 For questions please contact Ben Thatcher