Greenwell Springs, Louisiana – Today DEMCO received unanimous Louisiana Public Service Commission approval of its new wholesale power contracts with NextEra Energy Marketing and Amite Solar, to go into effect on April 1, 2024. DEMCO’s current ten-year wholesale power supply agreement with CLECO Power expires on March 31, 2024.
DEMCO followed all Commission rules and conducted a competitive request for proposal (RFP) whereby 13 companies submitted 95 qualifying bid proposals. DEMCO selected NextEra Energy Marketing, one of the largest power suppliers in North America that serves more than 70 public power entities and has a presence in all major markets.
"The approval of these contracts will result in significant savings for DEMCO members," said Randy Pierce, DEMCO CEO and general manager. "As an electric distribution cooperative, DEMCO purchases power from other companies who sell wholesale power - we don't make the electricity, we delivery it. Power supply cost is about 65% of the electric bill, so having access to competitive market prices and locking in those good rates in advance will be great for our members and the communities we serve."
DEMCO will have the flexibility to benefit from the most current wholesale market resources and can lock in annual rates when market conditions are favorable, something it cannot do under the current contract.
“DEMCO will be able to lock in annual rates well before the beginning of each year to reduce month-to-month power supply price fluctuations,” said Pierce. “As technology evolves and power markets change, we will be able to adapt to find the best rates for our members.”
DEMCO also entered into a fixed-price 25-year solar power-purchase agreement with Amite Solar to take all of the capacity and energy from a proposed 100 MW Amite Solar facility to be constructed in Tangipahoa Parish.
Pierce added, “Now that the contracts are certified, Amite Solar will continue developing the new solar facility, and in 2024, DEMCO can utilize modern energy as part of our power supply portfolio. "
Under the new contracts, estimates show that electricity rates could be cut by approximately 10-15% on average, with even higher savings possible during high-priced periods.
Dr. James Richardson, Professor Emeritus of Louisiana State University, projects that DEMCO members will save $160 million over the ten-year life of the contracts, or $16 million each year.
“I want to thank the Public Service Commission for their leadership on this issue,” said Pierce. “They have helped lead the way to lower rates for people in our seven-parish service area.”
DEMCO powers 114,420 meters that serve co-op members in Ascension, East Baton Rouge, East Feliciana, Livingston, St. Helena, Tangipahoa, and West Feliciana parishes.
