Streetlight decision saves city from next grid failure

After receiving sky-high electric bills during February’s winter freeze, the city moved Wednesday to a fixed-rate contract to power its streetlights.

City Council voted unanimously Wednesday to switch the rate structure with Reliant, a move finance officials said would leave the city immune to volatile price swings during severe weather events. Streetlights were the only city resource using variable rate electricity.

The bill spiked in February during the statewide power shortage, costing the city $3.2 million to power streetlights during the four-day period from Feb. 15 to Feb. 18. That sum was more than four times the $736,000 cost to power the lights for the six months before the freeze. In February 2020, the city spent $104,726.

The city later disputed the charges and ultimately paid $2.4 million under a settlement agreement.

“During the event, we realized we are vulnerable during situations such as the winter storm where the rates spike,” Finance Director Tantri Emo told council members Wednesday.

The spike was due to the city’s variable rate contract for streetlights. The average rate for that contract over the course of a year is about $26 to $30 per megawatt hour of electricity. During the pandemic, it spiked to as much as $8,300 per megawatt hour, finance officials said.

The city’s new fixed rate will be around $38.80 per megawatt hour, but it still could lead to savings.

Houston spent $4.5 million powering its street lights in the 2021 fiscal year, up from $1.3 million the year before. Finance officials expect to pay $1.8 million in fiscal 2022, which will be split between the variable and fixed rate bills.