HomeMy WebLinkAbout2026-031 Calendar Year 2025 Renewable Energy Supply GoalMay 29, 2026 Report No. 2026-031
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Calendar Year 2025 Renewable Energy Supply & Goal
EXECUTIVE SUMMARY:
For calendar year 2025, DME achieved a power supply of 100% renewable energy. However, the
monsoon season in far west Texas in late spring to early-summer of 2025 caused some disruption
to solar production due to the cloud cover in the region. DME purchased additional Renewable
Energy Credits (RECs) to ensure 100% renewable energy power supply.
BACKGROUND:
DME previously received approval from City Council to recognize the use of RECs to meet its
100% renewable energy goal as mandated by the Denton Renewable Resource Plan. Calendar
Year 2021 was the first year that DME achieved its 100% renewable energy goal and that
achievement included the use of RECs.
DISCUSSION:
DME Renewable Energy Supply Planning –
Compliance with the requirements of the Denton Renewable Energy Plan (DRRP) is measured on
a calendar year basis. This compliance period is a direct result of the accounting and crediting of
RECs by the Electric Reliability Council of Texas (ERCOT) which provides a third-party
independent verification of renewable energy credits for all market participants. Consequently,
when DME forecast the number of MWhs of renewable energy required to demonstrate
compliance with the DRRP, it spans two fiscal years. For calendar year 2025, the number of
expected MWhs served for the months of January through September 2025 were forecasted in
April of 2024 as part of the fiscal year 2025 budget. The remaining months of October through
December 2025 were forecasted in April 2025 as part of the fiscal year 2026 budget.
The Energy Management Organization (EMO) uses weather normalized forecasts to predict the
amount of energy to be served in the City of Denton and the generation expected from our
renewable resources under long-term Power Purchase Agreements (PPAs). Renewable energy
output from our contracted resources are a function of wind speed and duration and hours and
intensity of solar irradiation during each day. Forecasting these quantities is based upon proprietary
algorithms that use historical correlations of wind and sun to forecast output from each of our
contracted resources. Given the volatility of weather, the EMO recognizes that forecasts are likely
to be off from actuals but in order to maintain the statistical integrity of the load and generation
forecasts, this analytical approach is considered best practice in the electric utility industry.
May 29, 2026 Report No. 2026-031
For calendar year 2025, the EMO projected that the total DME served load would be 1,891,756
MWh. Actual calendar year 2025 load served was 1,789,266 MWh, or 5.42% less than forecasted.
For the calendar year, the EMO projected that renewable energy supply under contract would not
be sufficient to meet the forecasted load due to the Delilah solar project delay and eventual default.
As DME became aware of the potential shortfall, RECs were purchased from the market to make
up the shortfall.
Renewable Energy Credit Inventory –
ERCOT, as the market administrator for RECs, issues RECs to each renewable energy generator
monthly. However, Retail Energy Providers (REPs) who provide contracted energy in the
competitive retail market areas of ERCOT are not required to demonstrate compliance with the
renewable energy portfolio standards until May 1 of the year following the compliance year.
Because the REC market was developed with this compliance date in mind, renewable energy
resources do not generally finalize their REC transactions until mid-April of each year. DME’s
contracted renewable energy resources do not post their RECs to DME’s REC account at ERCOT
until mid-April. Consequently, DME does not know the actual level of RECs officially allocated
by ERCOT to each renewable energy resource and those resources are trueing up their ERCOT
accounts into April of each year.
Actual Load Served and Actions Taken by EMO –
As previously stated, DME purchased 1,789,266 MWh from ERCOT for resale to retail customers
in calendar year 2025. With an ERCOT REC inventory of 1,175,737 for the calendar year, DME’s
account was 613,529 or 34.3% short against the actual load served. To balance the account, DME
purchased this shortfall from the market to achieve 100% renewable energy supply for the year
and to again achieve compliance with the DRRP goal.
The EMO believes the actions taken this year to demonstrate compliance with the DRRP are
prudent and consistent with electric industry best practices. The processes and procedures used to
demonstrate compliance are fully auditable and are consistent with the findings and
recommendations of the City of Denton’s March 14, 2022, EMO audit.
The following table provides a historical recap of this goal:
Calendar
Year
Load
Served
(MWh)
Renewable
Energy
(MWh)
RECs w/o
Energy
(MWh)
Total
Renewable
(MWh)
Renewable %
2021 1,593,440 1,343,789 262,800 1,606,589 101%
2022 1,750,135 1,396,335 353,800 1,750,135 100%
2023 1,749,737 1,480,144 269,593 1,749,737 100%
2024 1,776,322 1,375,792 400,530 1,776,322 100%
2025 1,789,266 1,175,737 613,529 1,789,266 100%
May 29, 2026 Report No. 2026-031
STAFF CONTACT:
Jose Gaytan
DME Executive Manager of Power Supply
(940) 349-7528
Tony Puente
DME General Manager
(940) 349-8487
REQUESTOR: Staff Initiated
STAFF TIME TO COMPLETE REPORT: 2 hours
PARTICIPATING DEPARTMENTS: Denton Municipal Electric