City selects Shell for energy management

Dec 12, 2019

At its Dec. 10 meeting, City Council approved an agreement with Shell Energy North America to provide energy management services.

A request for proposals was issued in February. Twelve proposals were submitted to provide these services for the City. In August, City Council voted to proceed with contract negotiations with two finalists. Shell was selected based on their overall capabilities, cost, and the specific energy portfolio needs of the City.

Shell’s services include developing and making recommendations regarding how Georgetown’s energy is traded in the Texas energy market. They will also assist in forecasting energy needs, energy costs, and addressing challenges related to transmitting energy around the state, all of which affect the City’s costs associated with purchasing power.

“Shell is a critical partner for the City,” City Manager David Morgan said. “While we have always had partners to assist with our energy management, Shell provides a new level of expertise and proficiency at a lower cost than our previous partners.”

Progress on management assessment

In May, Schneider Engineering completed its assessment of the City’s practices related to purchasing and managing energy. The first recommendation was to secure new third-party energy management partners that more rapidly respond and react to changing market conditions and better ensure against market volatility.

Schneider also recommended developing and implementing a comprehensive risk management policy that sets boundaries on risk tolerances, financial obligations, and guides decision-making at all levels of the electric utility. City Council completed the first reading of a new energy risk management ordinance on Dec. 10, with a second reading scheduled for Jan. 14.

Finally, the assessment recommended studying alternative governance structures for the electric utility (e.g., a separate oversight board). City Council has had several discussions regarding a new Georgetown Electric Board to aid the City Council in policy oversight and reviewing monthly risk management policy updates, along with receiving periodic risk management policy compliance reports from an independent third-party. The new board structure is expected to be implemented in 2020.

Background on Georgetown’s electric utility

In 1910, Georgetown voters approved a bond to build the Georgetown Light and Water Works plant on Ninth Street. Over the last century, Georgetown has developed and maintained a highly reliable, community-owned and -operated electric utility. It is owned by the residents of Georgetown and reinvests directly in the community.

Historically, the electric utility has paid a return on investment to the City’s general fund annually. These dollars directly offset additional reliance on property taxes, sales taxes, or other revenues to operate core services like the police, fire, library, and parks departments.

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