Cedar Hill signs new electricity deal

by Steve Snyder of TODAY Newspapers

A little patience, a little negotiating strategy, and now the city of Cedar Hill has a five-year contract for electric power, less than a 24-year deal agreed to last fall. And, the power generated is not 60-percent coal-generated, either.

Melissa Stephens, assistant to the city manager, told the Cedar Hill City Council details of the new deal at its Jan. 13 meeting.

A mix of not enough participating cities, and the current economic situation, including credit issues, made the original deal less tenable, to boot.

Oct. 14, the council approved a 24-year contract for city electric delivery with the Cities' Aggregation Power Project, which looks for long-term utilities contracts for member cities. However, only 41 of 154 CAPP cities wound up agreeing to the deal. That, in turn, reduced the amount of electric power they needed.

And, a delay in many cities considering the plan, along with other matters, played out well in the end. CAPP also had contacts with Florida Power & Light. That, and the drop in natural gas prices the past few months, made a shorter-term deal not dependent on coal-fired electricity from Luminant, the successor to TXU Generation.

At an Aug. 26 briefing, Stephens said that 60 percent of the city's need would be at a base rate of 8 cents per kilowatt hour and 40 percent on a more fluctuating rate, at natural gas market rates. The city's current, shorter-term contract prices 100 percent of its electric power at 10.8 cents per kilowatt hour.

A CAPP briefing that Stephens had said that CAPP member cities may look at a long-term deal after the current five-year arrangement expires.