Council to revisit adding electric hedging language to investment policy after staff and consultants flag concerns

Council members opened a work session discussion June 25 on whether to amend the city—investment policy to explicitly authorize newer electric procurement and hedging instruments such as options, forwards and prepaid contracts.

Dawn, a staff presenter, told the council the proposed text (displayed on-screen) was intended to "further define our existing authorized investments specifically for electric" and to include newer market products the city has not used at scale. She said the language was shown in yellow for review and then turned the topic over to Councilwoman Wilder.

Councilwoman Wilder said the electric market has shifted since winter storm Yuri and that full-requirements contracts the city has used in the past are no longer widely available. "This helps us establish continuity between the policies," she said, describing the change as a way to sync the hedging and risk-management policies with investment policy to improve transparency.

The mayor expressed concern about the complexity of the proposed language and asked what the city's regular consultants thought of the change. Dawn said the city contacted its financial advisor and Steve Moffitt with Synergy, who handles purchase power and small-scale hedging for the city. "Their feelings on this is, government code 2256 already does cover hedges," Dawn said, and she characterized much of the added language as duplicative of the state statute and better placed in a risk-management policy than in the investment policy itself.

Wilder acknowledged the overlap but framed the insertion as a transparency measure so citizens could more easily find how the city might use prepaids or options and understand potential cash-flow effects.

Council members also asked about process: several members said ordinances or policies related to utilities often are routed through the Utility Board for review. A staff speaker replied that the investment policy is adopted by city council and then applies to the utility board, so presenting the amendment first to council was intentional.

Rather than vote, the council agreed to pause and give members time to review the draft and consult with staff and outside experts; members noted July has only one meeting and suggested taking the item up at one of the August meetings. No formal motion or vote was taken during the work session.

Next steps: staff will gather consultant feedback in writing or public comment, and the council will revisit the proposed language at a future regular meeting (likely in August).