HomeMy WebLinkAbout26-0050 - 2026-04-07 - Informal ReportINFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 26-0050
To the Mayor and Members of the City Council
April 7, 2026
Page 1 of 3
SUBJECT: SALE OF RENEWABLE ENERGY CREDITS (RECs)
Purpose
The purpose of this Informal Report is to provide information to the Mayor and City Council regarding the
upcoming sale of Renewable Energy Credits (RECs) resulting from the City's retail electric contracts with
Reliant Energy Retail Services, LLC (Reliant).
Background
The City of Fort Worth maintains 10-year electricity supply contracts with Reliant Energy Retail Services,
LLC, running from June 1, 2021, through May 31, 2031. The agreements cover all municipal facilities
within deregulated ERCOT areas and include RECs equal to roughly 50% of the City's annual consumption.
This totals approximately 173,000 RECs per full year, with a final allotment of 71,000 RECs for the partial
year in 2031.
Prior to 2026, Reliant Energy retired RECs annually on the City's behalf. These retirements occur each
April for the previous calendar year; for example, 2025 consumption RECs will be retired in April 2026.
Approximately 936,000 RECs remain for the period spanning 2026 through 2031. The City will transition
from retiring these future allocations to selling them to a third -party purchaser, receiving annual cash
payments in lieu of retirements.
Strategic Rationale
The Property Management Department recommends proceeding with the sale of future REC allocations
based on the following factors:
• Market Risk: Shifting federal regulations regarding nationwide versus regional REC trading could
impact the future value of ERCOT-specific credits.
• Asset Appeal: The City's RECs are highly marketable because they are sourced from specific,
identifiable renewable facilities.
• Financial Control: The City maintains full authority to avoid the transaction if the market value at
the time of the sale does not meet an acceptable threshold.
Third Party and Expected Compensation
A third -party broker, Usource, will market and sell the City's Renewable Energy Credits (RECs). The
agreement provides a six-month term to complete the sale, with an optional six-month extension at the
City's discretion.
The City anticipates generating at least $934,800 in gross revenue from the sale of 2026-2031 RECs, with
a minimum price of $1.00 per REC. Usource will receive a 15%fee on realized gross revenue, paid only
after the City has received payment from the purchaser. This equates to approximately $50,000 annually,
subject to a cumulative cap of $300,000. Net proceeds, estimated at $794,582, are designated for the 200
Texas Street project.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 26-0050
To the Mayor and Members of the City Council
April 7, 2026
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Page 2 of 3
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SUBJECT: SALE OF RENEWABLE ENERGY CREDITS (RECs)
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$1,000,000
Est. Gross Value
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$900,000
CFW Est. Net Revenue
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$800,000
■ Usource Est. Compensation (15%)
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$700,000
$600,000
$500,000
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Annual Estimated Gross Value = $172,929
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$400,000
Annual Estimated CFW Net Revenue = $146,990
$300,000
Annual Estimated Usource Compensation = $25,939
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$200,000
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$100,000
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—
- -
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2026 2027 2028 2029 2030
2031 2026-2031
Total
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 26-0050
To the Mayor and Members of the City Council
April 7, 2026
Page 3 of 3
SUBJECT: SALE OF RENEWABLE ENERGY CREDITS (RECs)
Next Steps
Contract amendments with Reliant Energy to formally suspend the annual retirement of RECs for the
2026-2031 period and Sales Agreement with Usource are in process.
An M&C will be on April 28, 2026, Council agenda for approval of these contracts. Upon the execution of
these contracts, Usource will conduct a comprehensive market analysis to optimize the financial return on
the City's allocations. Usource will then lead marketing and procurement efforts to identify purchasers on
the open market. Finally, Usource will coordinate the final sale and assist with managing the annual
transfer of RECs through the end of the contract term.
For questions regarding this information, please contact Marilyn Marvin, Property Management Director
at 817-392-7708.
Jesus "Jay" Chapa
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS