Magnolia ISD approves TXU Energy for electricity contract amid rising market rates

The Magnolia Independent School District (MISD) Board Meeting on April 14, 2025, focused on several key decisions, including the approval of routine consent agenda items and significant updates on construction and energy procurement.

The meeting began with the board approving a consent agenda that included routine items, which passed without discussion. Following this, Mr. Brunner presented a change order related to the construction of the Career and Technical Education (CTE) and concession buildings at Magnolia High School. The board approved a deduction of $75,763 from the original guaranteed maximum price, bringing the final construction cost down to $3,050,586. This reduction was attributed to unspent allowances, resulting in savings for the district.

In a significant discussion regarding energy procurement, the board addressed the upcoming expiration of the current electricity contract with TXU Energy, set to end on June 30, 2026. The district has been with TXU since 2009 and recently completed a Request for Proposal (RFP) process, with TXU emerging as the lowest bidder. The board was asked to approve TXU Energy as the provider and grant the superintendent the authority to sign a contract when market conditions are favorable.

The discussion highlighted the current energy market, noting that prices are approximately 50% higher than in previous years, which could impact the district's budget by about $850,000 annually. Experts anticipate that energy prices will continue to rise due to increased demand in Texas. The board expressed caution regarding the length of the new contract, initially suggesting a maximum term of eight years, but ultimately agreeing to cap it at six years to allow for flexibility in future negotiations.

The board unanimously approved the motion to engage TXU Energy for a six-year term, empowering the superintendent to finalize the contract when appropriate. This decision reflects the district's proactive approach to managing energy costs amid fluctuating market conditions.

Overall, the meeting underscored the district's commitment to fiscal responsibility and strategic planning in both construction and energy management.