City of Garland and Credit Suisse Energy Sign Deal to Manage
Electricity Supply Costs For The City’s Municipal Electric Utility
Garland, Texas – May 09, 2008 – Credit Suisse Energy (CSE) and the City of Garland, Texas, have entered into a multi-year agreement under which CSE will manage the price exposure on the electricity supply costs for the City’s municipal electric utility, Garland Power & Light (GP&L). GP&L has an annual customer load of 2.2 million megawatt hours. The City owns a share in the Gibbons Creek coal plant, and has traditionally used its 1.75 million megawatt hours/year share, as well as GP&L’s own natural gas power plants to meet the utility’s energy requirements.
Under the multi-year contract, CSE will assist in meeting the electricity needs of GP&L’s customers once those needs exceed Garland’s share of Gibbons Creek’s production. The excess megawatts will be provided at a fixed heat rate. Because this fixed heat rate is significantly lower than that of GP&L’s gas power plants, this innovative transaction, developed over several months by Garland and CSE, is expected to result in significant cost savings for the utility.
An added benefit of this agreement is that 10% of the energy comes from renewable sources. This is an excellent complement to GP&L’s Lewisville Hydroelectric Plant and energy efficiency programs. It also supports the City’s continued commitment to protect the environment through a variety of green initiatives.
“Over the last few years, we have considered a number of solutions to reduce electricity supply costs. The package developed with the Credit Suisse team is highly tailored to our specific needs. This ground-breaking transaction will mitigate risk and reduce the possibility of rate increases in this volatile energy market,” said Bill Dollar, Garland City Manager.
“Garland presented us with a challenge to create a transaction that closely followed the fluctuations in their hour-by-hour demand over the life of the contract and that minimized any residual risk. Our ability to meet all of Garland’s objectives demonstrates the depth and creativity of our energy trading and marketing franchise,” said Guillame Malle, Head of Marketing for Credit Suisse Energy.