TASB Energy Cooperative Helps Districts and Counties Weather Gas Market Volatility

With all the volatility in gas prices in recent weeks, school districts and counties are working hard to keep their vehicles on the road without blowing their fuel budgets.

In one coastal school district, officials recently told their local news station that they were paying $1 more per gallon of diesel than they were at the beginning of the year, or about $2,000 more per week.

“We're trying to fit as many people on the bus as we can and travel in the shortest amount of distance between, just to maximize our fuel and our seating capacity,” the transportation director told the news station.

Even as gas prices have come down in recent days, some districts are looking at ways to hedge the volatility, especially as budget planning for the next school year is underway. One strategy is to join the largest fixed-rate fuel program in Texas administered by the TASB Energy Cooperative.

“We’re definitely seeing more phone calls about our annual spring fuel pool,” said Adrian Porras, a sales consultant for TASB. “We’ve already had five or six new members, who have never participated in previous pools, sign letters of commitment.”

More accurate budgeting

The fixed fuel program, offered free to TASB members, is a way to take advantage of negotiated bulk rates and to purchase fuel at a fixed rate, decreasing the effects of market volatility and allowing for more accurate budgeting. When a member locks in at a fixed rate, they will pay one price throughout the contract no matter what the market does.

Districts and local governments have two ways to take part in the TASB Energy Cooperative. One is to negotiate their own contract for fuel purchases, an approach taken by many large districts. The other is to aggregate multiple districts, large or small, for better rates.

“Either way, you know exactly how many gallons you’re buying at what price,” said Porras. For those districts that were part of last year’s fixed-rate diesel contract, they are paying $2.13 a gallon through the end of the term, which for many will be this August. Compared to the retail market for diesel, that’s a big savings.

Porras typically advises participants in the fuel program to only lock in as much as 80% of their total projected fuel usage for a given year as another way to hedge market volatility. “We get a lot of questions about what happens if a district commits to more gallons than they use or if they commit to fewer gallons,” he said. “We try to build in a buffer so districts still have flexibility. They can lock in as low a percentage of their total projected usage as they want.”

It's important to note that the Energy Cooperative also offers strategies for school districts and local governments to manage their electricity budget with a program similar to the fuel program. Again, the goal is to provide budget certainty for greater control of power costs and to ensure public funds are spent wisely.

“Political pressure and events have also impacted the electricity market with higher rates in the short term,” said Alex Russian, an energy consultant with TASB. He noted other variables affecting supply and demand in the Texas market, including generators shutting down, more people moving into the state, increased exports of liquefied natural gas, and the lingering impacts from Winter Storm Uri.

“Since the Texas winter storm last year, electricity prices have increased significantly,” Russian said. “Our traders and experts don’t feel that we will see prices drop back down to where they were prior to the storm. So, when procuring electricity, it is important to review all possible options.”

Locking in rates

The ability to lock in rates over the long term is one of the major benefits of the Energy Cooperative's electricity program. That certainty around pricing was one of the reasons Lamar Consolidated Independent School District signed a long-term contract with the TASB Energy Cooperative recently.

"Our experience in dealing with the TASB Energy Cooperative was exceptional,” said Christopher Juntti, chief operations officer for Lamar CISD. “The service reps we dealt with were very responsive and made the process seamless. From procurement to landing on our rate to executing all the paperwork, the Cooperative was there every step of the way.”

He noted that the return on investment for the district “looks to be an exceptional value.”  

Value and excellent customer service in both the fuel and the electricity programs are part of TASB’s overall goal of lessening the burden of government for its members through programs that help local governments and school districts make the best use of every public dollar.

“We’re committed to finding solutions for our members that provide savings and value,” said Brian Bolinger, associate executive director of Business Services at TASB. “We provide a custom analysis, whether it’s fuel or electricity, to align our proposals with the goals of each member.”

Make your budget more predictable

Learn more about the TASB Energy Cooperative and how to make your budget more predictable with competitive, fixed rates on electricity and fuel.