Georgetown to issue $47.8M to pay energy costs from winter storm
GEORGETOWN, Texas - The city of Georgetown says it plans to issue almost $48 million in a ten-year bond to pay energy costs from the recent winter storm that impacted Texas.
City Council in a special-called meeting on March 2 directed staff to pay the debt over 10 years from electric utility revenues at current rates.
"Even as we got word on the exorbitant cost of energy while we were in the middle of the disaster, our focus was delivering electricity to our customers and controlling the variables we could," Georgetown Mayor Josh Schroeder said. "Another variable we have some control over is the burden placed on Georgetown electric customers as a result of this event, and the steps we took Tuesday will mitigate additional costs for our customers."
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As a result of the planned bond issuance, Georgetown electric customers will see no difference in their electric rates, despite the high energy costs from the storm. What the City owes continues to change as electric generators and providers, the Public Utility Commission of Texas, and legislators evaluate the financial situation and weigh options, says the city. Any changes to rates or the bond needed because of an amended bill will be brought before the council for discussion and direction.
At the City Council's direction, the City plans to use the existing power cost adjustment of $0.01375 per kilowatt-hour to help cover the cost of the bond as it is paid back over 10 years. The annual debt payment, principal and interest, for the bond being issued is about $5.4 million.
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The City says it also is pursuing a surety policy to cover an additional $6.4 million in reserves, which will be required to maintain debt service coverage ratios after the costs from the winter storm. The one-time up-front payment for the policy will be paid for using existing revenues.
Customers might see higher-than-normal electric bills for February due to increased usage, says the city. Even with the mandated power outages from ERCOT, the heating and reheating of a home consumes considerable energy and is likely to result in higher bills this month. The City has multiple options to help residents pay their electric bills, such as funding assistance through partner agencies and in-house customer programs. Residents can contact Customer Care at 512-930-3640 or customercare@georgetown.org to discuss options.
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The City says it currently owes $44.8 million to ERCOT to cover about 3,000 megawatt-hours between Feb. 14 and 20. The remaining 13,000 megawatt-hours the City used during the storm were generated by providers at contracted rates. Last month, the average cost per megawatt-hour was $20.79. The $9,000 per megawatt-hour maximum price was in effect in the ERCOT market for 70 hours from Feb. 16 to 19.
ERCOT also charged the City for ancillary services, which are charges for reserve or on-demand power supply. For some time periods during the event, ancillary services were being charged at $25,000 per megawatt-hour.
For more information about electric costs and the City’s plans, click here visit Georgetown.org.