Title
Consider a memorandum/resolution authorizing the City Manager to review energy proposals from L5E LLC dba 5 and execute a contract with the provider offering the best value to the city.
Body
DATE: November 18, 2025
TO: Kent Cagle, City Manager
FROM: Judith Tangalin, Executive Director of Finance
SUBJECT: Authorize the City Manager to collaborate with L5E LLC dba 5, the City’s energy advisor, to enter into a contract with the energy provider offering the best overall value to the City
BACKGROUND AND FINDINGS:
The City previously participated in the Texas General Land Office (GLO) Power Program before transitioning to independent energy procurement. Since that time, the City has engaged L5E LLC dba 5 (“5”) as its energy advisor to monitor market conditions and assist in securing electricity contracts that provide the best overall value. Through this partnership, the City executed two contracts covering the service period from July 1, 2026, through December 31, 2032. Each contract includes approximately half of the City’s meters, resulting in rates of $0.0575606 per kWh and $0.0614421 per kWh, respectively.
The Electric Reliability Council of Texas (ERCOT), which manages the flow of electric power to about 90 percent of the state’s electric load, is forecasting that statewide electricity demand will nearly double over the next five years. This expected growth has already increased market prices and is anticipated to continue driving long-term cost escalation. Given current market volatility and future grid-capacity constraints, it is prudent for the City to proactively secure electricity pricing to protect the City’s long-term budget stability.
This resolution authorizes the City Manager to work with L5E LLC dba 5 to evaluate market proposals and secure electricity rates for the period following December 31, 2032. The procurement will be facilitated through The Interlocal Purchasing System (TIPS), of which the City is a member.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
N/A
CONFORMITY TO CITY POLICY:
Yes, electricity purchases are exempt from the competitive bidding process as stated in Texas Local Government Code Section 252.022 (a)(15).
FINANCIAL IMPACT:
What is the amount of the expenditure in the current fiscal year? For future years?
There is no direct expenditure to the City for the services of 5. As an energy broker, 5’s compensation is embedded within the contracted electricity rate and paid by the selected energy provider under the provider agreement.
Is this a one-time or recurring expenditure?
Electricity is an annual recurring expense.
Is this expenditure budgeted?
Yes. The City budgets for electricity service annually across all operating funds. While specific costs vary each year based on usage and contracted rates, sufficient appropriations are included in the FY 2026 budget to cover current electricity needs. This action pertains to future contract periods beyond 2032 and does not require an additional appropriation at this time.
If not, where will the money come from?
N/A
Is there a sufficient amount in the budgeted line-item for this expenditure?
Yes
RECOMMENDATION:
City Council to authorize the City Manager to review proposals from 5 and enter into a contract with the energy provider whose bid provides the best value for the City.
DEPARTMENTAL CLEARANCES:
Finance
Legal
ATTACHED SUPPORTING DOCUMENTS:
N/A