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Katy council OKs parameters for new electricity contract, sets 48‑month cap for staff to secure best offer
Summary
Following a presentation on Texas wholesale power markets, the council authorized staff to pursue a power agreement beginning April 2027 with a not‑to‑exceed price for up to 48 months; staff retains ability to accept lower bids and will return the final contract for execution.
KATY, Texas — The Katy City Council on Feb. 24 authorized city staff to pursue an electricity agreement that would take effect in April 2027 for a term up to 48 months and set a not‑to‑exceed cap on the rate presented to council.
The council’s action followed a market briefing from Michael Skelton, vice president of Tradition Energy, who told the council that changes in the Electric Reliability Council of Texas (ERCOT) market — including rapid growth in renewable generation, increased weather sensitivity and large new demand from data centers and industrial loads — have added volatility to forward power prices. Skelton recommended a risk‑management approach that balances shorter‑term purchasing with the city’s existing contract, which runs through March 2027.
Skelton told council the city’s current contracted rate is “just over 4¢,” and that forward markets have trended higher; council discussion focused on buying strategy to control budget risk while keeping options open to average down if prices fall. Tradition Energy said it solicited offers from 12 suppliers for the city and has been working with administration on tactical pricing since August.
Council moved to approve a procurement parameter: authorize staff to secure a contract with a term up to 48 months and a rate not to exceed the presented 0.06764 (per unit as presented to council). Councilmembers approved language allowing staff to continue seeking better offers from other suppliers and returning the final contract for signature after legal review. The motion was made by Councilmember Gina Hicks and seconded by Mayor Pro Tem Chris Harris; the voice vote was unanimous.
Council and staff emphasized that the action sets procurement parameters, not final contract execution. Byron (administration) and legal staff confirmed that any executed contract must be brought back to council for final approval if it creates a debt or otherwise requires council signature; the mayor would execute only after legal review and council authorization as required.
Councilmembers discussed the merits of shorter‑term purchasing to allow the city to monitor the market and pursue additional energy‑management measures over the next two years, including efficiency or curtailment options.
