Contract Saves the City $30M Annually
April 4, 2012 -- In keeping with the principles of the City’s Hire Houston First policy, Houston Mayor Annise Parker today announced that Houston-based Reliant Energy has been awarded a $500 million, three-year contract to provide electricity to city facilities. The contract, which can be extended two additional years, is expected to save the city approximately $30 million annually over its current electricity costs.
“It’s a great deal for us,” said Mayor Parker. “We are getting a competitive price and we are able to select a local corporation to do the work. We have a responsibility to the city and the people of Houston to do everything we can to keep jobs in our city. This selection reinforces that commitment”.
“We’re delighted to have earned the opportunity to continue serving the citizens of Houston,” said Jason Few, President of Reliant and Chief Customer Officer of NRG. “Reliant is uniquely positioned to meet the city’s energy needs with competitive prices, clean energy choices and innovative, customized solutions. Just as we do for our residential customers, we are providing tools and services to help the city better manage its electricity use, save money and maximize its purchase and use of renewable energy.”
The City contracted with Choice Energy Services (CES), a leading provider of customized energy procurement and management solutions, to advise the City's power procurement team. Analysis by CES using market futures forecasting estimates a $30 million decrease in annual expenditures by the City on electricity, from about $130 million per year to about $100 million.
For the past four years, Houston has been the number one governmental purchaser of green energy. The city’s contract with Reliant enables it to keep purchasing renewable energy credits (RECs) to reduce the environmental impact of its electricity use. Renewable energy credits are created when electricity is produced using resources such as wind, solar, biomass or hydro power. By purchasing RECs, the city ensures that an amount of electricity equal to what it consumes is generated from renewable sources.
Under the agreement, which begins July 2013, Reliant has committed to supporting the city’s Minority and Women-owned Business Enterprise program (MWBE) by purchasing 15 percent of the electricity needed to power the city from a certified MWBE.
Hire Houston First allows the City to consider a vendor’s principle place of business and to grant preference to local businesses in awarding certain City contracts. The electricity contract went to bid before Hire Houston First was implemented, but Mayor Parker utilized its principles in making the final selection.
Houston is one of the largest consumers of electricity in southeast Texas, using approximately 1.25 million megawatts per year delivered to over 4,300 meters.