Denton City Council approves TMPA's transmission assets sale for improved management

Denton's Public Utilities Board has taken a significant step towards enhancing the city's electric transmission capabilities by recommending the approval of a resolution for the sale of certain transmission system assets by the Texas Municipal Power Agency (TMPA). During the meeting held on April 14, 2025, board members discussed the implications of this asset transfer, which is expected to strengthen Denton's position in the regional energy market.

TMPA, a joint powers agency owned by Denton and several other cities, has transitioned from a generation agency to focusing solely on transmission assets. The board highlighted that TMPA's previous generation assets were sold in January 2021, leaving the agency with limited operational capacity. The current proposal involves Denton acquiring transmission assets valued at approximately $3.2 million, while TMPA will take over assets worth $7 million from another member city, Bridal. This transaction is poised to increase Denton's ownership stake in TMPA's assets to 21.3%, a notable improvement from previous levels.

The board emphasized that this agreement marks a positive development in inter-city relations, which have not always been smooth. The resolution will now move to the city council for final approval, with staff recommending swift action to capitalize on the benefits of this asset acquisition.

In addition to the asset transfer, board members discussed the financial implications of the deal. TMPA's rate of return is projected to be over 12%, compared to Denton's current rate of 6.21%. This financial structure means that Denton will receive approximately $2 million annually from TMPA, based on its share of net revenues after operational costs.

The acquisition of these transmission assets is expected to enhance Denton's load management capabilities, particularly through the utilization of a critical 345 kV transmission line that serves the city. This strategic move not only aims to stabilize Denton's energy supply but also positions the city for future growth and energy demands.

As the resolution heads to the city council, the board's unanimous support reflects a collective commitment to improving Denton's utility infrastructure and fostering collaborative relationships among member cities. The outcome of this decision could have lasting implications for the city's energy landscape and its residents' access to reliable power.