The City of Denton asked The Brattle Group (“Brattle”) to review Denton Municipal Electric’s (“DME”’s) proposed Renewable Denton Plan (“RDP”), which calls for increasing the renewable generation in DME’s portfolio (mostly wind and solar resources) from the current 40% of energy served to 70% by 2019. This report reviews the RDP and alternative options analyzed by DME, and performs an independent economic feasibility assessment of the RDP.

DME currently has two sources of power supply besides market purchases – a 100 MW power sales agreement with the Gibbons Creek Steam Electric Station (“Gibbons Creek”) operated by the Texas Municipal Power Agency (“TMPA”) and a wind power purchase agreement (“PPA”) with NextEra. A 30 MW solar PPA is scheduled to start in 2019 (together with the NextEra wind PPA, “existing renewable PPA”). Therefore, under the status quo portfolio (“Status Quo” or “SQ”) DME will have multiple PPAs with the balance being purchased from the ERCOT market in 2019. The Gibbons Creek power sales agreement will expire in the next few years and DME must decide whether to extend it.

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