CoServ now has the power to buy power, saving Members money
CoServ entered a new era on March 1 that should save the cooperative money and, ultimately, lower costs for Members.
Everything appeared the same for Members when they flipped a light switch or turned on a television that Wednesday morning. The electricity was still the same, reliable power they’ve come to expect from CoServ.
But behind the scenes, CoServ’s Energy Resources Team now had 100 percent control of our power purchases in the market. This is a milestone moment for this 86-year-old co-op and a positive outcome of the tragic Winter Storm Uri.
So, what does that mean for you now that we have full control of power purchases?
First, let’s talk about how we’ve bought power historically.
For most of our history, CoServ has purchased power from Brazos Electric Power Cooperative, a Waco-based generation and transmission co-op that supplied power to CoServ and 15 other distribution co-ops.
Winter Storm Uri changed everything. The unprecedented weather event left Brazos with a staggering bill that forced it into bankruptcy.
As part of its bankruptcy process, Brazos agreed to sell its fleet of power plants and, on March 1, 2023, exit the power supply business. However, Brazos does still own the transmission lines and substations that transport power to CoServ. To learn more about Brazos and Securitization, visit CoServ.com/Securitization.
So how does CoServ buy power now?
Leading up to March 1, CoServ expanded the Energy Resources Team by adding Power Supply Advisors Jay Yoo and Chris Cross. They work with Gary Franzen, Senior Vice President Energy Resources, and Paul Virag, Senior Advisor Product Management, to purchase power supply contracts for the days, months and years ahead.
They are buying power from wholesalers, traders, energy companies, power plants and the Lapetus Solar Project in West Texas.
“The goal is to purchase most of our power ahead of time. We’re going to lower costs for the average Member relative to what they would have been had we stayed with Brazos,” Gary said.
On a typical day, the team analyzes weather forecasts and software models to measure electricity demand within CoServ’s service area for up to 10 to 14 days. If more power is needed to meet expected demand, they buy power either from other companies or in the ERCOT day-ahead or real-time markets.
The goal is to hedge as much power ahead of time, but not too much that we end up with an excess of power that needs to be sold back to the market. That’s why the weather forecasts and load models are so critical. It’s important to note that CoServ buys power to meet its requirements based on forecasted demand, not to make a profit from price changes in the Electric Reliability Council of Texas market.
“Now we have to look at every single hour of every single day to try to be close to covering our load with the lowest price that we can pay without exposing ourselves to too much risk,” Gary said.
CoServ, and the Energy Resources Team, are working on your behalf to make strategic power purchases that will lower bills for our Members.
It’s just another way that we are serving our Members with safe, reliable and affordable energy solutions.