Wholesale Power Supply Contracts
DEMCO's new wholesale power contract with NextEra Energy commenced on April 1, 2024.
As an electric distribution cooperative, DEMCO purchases power from other wholesale power companies—we don’t make the electricity; we deliver it. The power supply cost is about 70% of the electric bill, so having access to competitive market prices and securing competitive rates in advance will be great for our members and the communities we serve.
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. 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 acquire all the capacity and energy from a 100 MW solar facility in Tangipahoa Parish. The project is slated to commence on April 1, 2025.
Lower electricity bills will benefit not only DEMCO members but our regional economy as a whole. Paying less for electricity will allow individuals and families to spend more on other goods and services, creating additional economic activity throughout the communities where our DEMCO members live, work, and play.
On October 19, 2022, DEMCO received unanimous approval from the Louisiana Public Service Commission for our new 2024 wholesale power contracts with NextEra Energy Marketing and Amite Solar.
For more details, please click on the links provided below.
- Lower electricity rates for its members
- DEMCO estimates that rates will be 10-15% lower than current average rates
- DEMCO estimates that savings could be as high as 25% compared to peak rates under its current power supply contract
- DEMCO can lock in power rates when market conditions are favorable, something it cannot do under the current contract
- More stable rates
- The current wholesale power contract allows rates to fluctuate monthly based on fuel costs that DEMCO cannot control
- The new NextEra contract will allow DEMCO to lock in annual rates well before the beginning of each year to prevent month-to-month fluctuations
- More diverse energy types
- The NextEra contract initially includes approximately 15% solar energy, hydro energy and provides options to procure additional renewables
- Solar power under the NextEra contract is not only environmentally friendly, but will be priced lower than DEMCO typically pays under its current contract
- The new wholesale power contracts will go into effect in about 18 months, on April 1, 2024.
- DEMCO must honor its current contract with CLECO Power until it expires on March 31, 2024.
- NextEra is headquartered in Juno Beach, FL and is one of the largest power suppliers in North America
- NextEra has 15,000 employees and provides power to millions of customers in the United States and Canada, including 70 electric cooperatives and municipal utilities
- NextEra is a Fortune 200 company and has a presence in all major markets
- DEMCO followed all Commission rules and conducted a competitive request for proposal (RFP) process whereby 13 companies submitted 95 qualifying bid proposals
- A third party reviewed all proposals and selected NextEra Energy Marketing (proposals were blinded so that the entities were not disclosed until the best was identified)
- DEMCO performed due diligence to ensure that NextEra could deliver on its promise to provide reliable power at a competitive cost
Louisiana PSC approves new power deals for co-ops, siding against Entergy and Cleco
October 19, 2022
Cleco Operational Decisions (Dolet Hills Closure) Leads to High Cost of Wholesale Power
Manager's Report, Sept/Oct 2021, Along these Lines
New Wholesale Power Contracts: Economic, Reliable, Renewable
Nov/Dec 2021, Along these Lines, pg. 8
Cleco passes closing costs of Dolet Hills fuel generation plant to DEMCO members
Manager's Report, Jan/Feb 2022, Along these Lines
