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PUB recommends council approve transmission asset transfer with TMPA; Denton to pick up $3.2M net book value
Summary
Public Utility Board recommended a resolution to City Council approving transfer of certain transmission assets between TMPA and member cities; staff said Denton would take assets with about $3.2 million net book value and receive 21.3% of TMPA’s net revenues going forward.
The Public Utility Board on April 14 voted to recommend that City Council approve a resolution authorizing transfer of certain transmission system assets involving the Texas Municipal Power Agency (TMPA).
Tony Puente, AME general manager, explained TMPA is a joint powers agency created in 1975 and that its generation assets were sold in January 2021; what remains are transmission assets and a portion of mine property. Puente said the proposed transaction would transfer to the city assets with roughly $3.2 million in net book value; in return TMPA would assume assets from another member (Bridal) with roughly $7 million in net book value. Puente said the exchange would increase Denton’s ownership share to about 21.3% of the consolidated transmission assets and that Denton’s historical share of TMPA net revenues is roughly $2 million per year.
Puente described the transfer as intended to clear up operational, maintenance and regulatory responsibilities where ownership has been commingled across member cities. He said the joint operating agreement (effective Sept. 1, 2016, as referenced in the meeting) requires member approval for asset sales over $500,000 net book value. Board members discussed how TMPA distributes revenues and whether additional transmission capacity would help City of Denton load management; Puente said the city would directly own a large 345 kV line that provides substantial power into Denton.
The board moved to recommend adoption of the ordinance/resolution to council; the motion passed unanimously.
