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Solar plant vote postponed for three weeks

Friday, February 13, 2009 by Austin Monitor

The City Council postponed a decision for a new 30 mega-watt solar array Thursday, after hearing pleas from environmentalists to move ahead with the plan, and pleas from business representatives to stop it. Council Member Brewster McCracken was the sole member to object to the postponement.


The city has until March 13 to sign a deal with Gemini Solar Development to build a solar power plant on 300 acres of city-owned land near Webberville. After that, the city would have to re-bid the project.


Luke Metzger of Environment Texas spoke in favor of the plan. “We strongly support this project,” he said. “Austin has the opportunity to be a world leader in solar power, and this project really puts a stake in the ground to make that claim.” Several other environmental activists also supported the plan.


However, representatives of several of Austin Energy’s largest industrial customers told the Council they were concerned about the impact the $250 million project would have on their rates. “We understand the cost from the plant is going to be approximately 16.5 cents per kilowatt hour. That’s over 400 percent of the current fuel rate that we pay,” said Roger Wood with Freescale. “We feel the timing of the project is premature for many reasons, not the least of which is the current global economic downturn that is forcing many Austin businesses, including Freescale, to make significant cost reductions in the face of declining revenues.”


Flash memory chip maker Spansion argued the same point. “We can’t afford it, but we’re not against solar power,” said Ray Matthews of Spansion. “It would cost us $200,000 a year in additional costs. It doesn’t sound like a lot, but over a 25-year contract…it’s a lot.”


Austin Energy officials said the project would be structured so that the cost for solar-generated power is fixed, making it immune from fluctuations in fuel prices that affect the cost of energy from natural gas. Generating energy from solar power could save customers money over the life of the plant when compared to other sources, said Austin Energy General Manager Roger Duncan.


“At some point, we would expect the price to actually be a discount,” Duncan said. “We expect there to be a crossover point. The impact would be there only if the price of natural gas did not rise.”


Council Member Mike Martinez suggested that the project simply be a part of the Green Choice program. “Eighty percent of Texans are willing to pay a little bit more for green energy,” he said. “If the numbers are that big, then why not offer that choice? Why not let folks self-impose an increase in electric utility rates if they choose to? The current proposal makes everyone bear the burden of higher utility rates beginning in 2011.”


Martinez found some support for that idea from Council Member Lee Leffingwell. “I’m having hard time seeing any downside to that,” he said. “I think it’s worth taking a look at.”


Adding 30 megawatts to the Green Choice program would be a lot, and officials with Austin Energy cautioned that they weren’t sure there was enough customer demand. “It is very doable,” said Duncan. “We can create a special Webberville Green Choice batch. However, if that is not sold out, the amount that is unsold still rolls into the fuel charge for everybody.”


Acting on a motion from Martinez, the Council voted 7-0 to delay a decision on the project until March 5 to allow the staff time to present more information. McCracken was the only member that would have liked to move ahead immediately. “Solar is good for creating jobs, it’s where the future is,” he said. “This is a nationally significant project that will demonstrate Austin’s leadership in clean energy and in creating a green-collar economy.”


As for those companies concerned about their utility rates, McCracken urged them to consider the project’s potential to spur investment in solar power and clean energy. “The foundation of our private sector economy is the semiconductor industry,” he said. “Spansion, Freescale, AMD…every single one of them has said that their number one business opportunity is going to be solar energy, the development of new solar technologies.”

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