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Austin Energy wind-power projects back on agenda this week

Monday, August 22, 2011 by Bill McCann

A pair of contracts from Austin Energy that will significantly increase its use of wind-generated energy are back before Council this week after they were mysteriously pulled from last week’s agenda by city staff.

 

The two agreements are to purchase some 291 megawatts of power from existing wind farms in South Texas.  However, those contracts were pulled off the Council’s agenda on August 18 without explanation, only to reappear for consideration this week.

 

Mayor Lee Leffingwell said he was unsure why the item was delayed.

 

“I don’t know why (it was taken off last week’s agenda),” he said. “It is on the agenda (this week) and I’m very much in favor of it. The price is unbelievably low…and these contracts bring us up to about 26 percent of that 35 percent goal, so I think it is something to be excited about.”

 

The city has set a goal of having 35 percent of its electricity generated come from renewable sources such as wind and solar power by the end of 2020.

 

The two projects, along with a third announced last week, would offer very competitively priced power that could save the utility – and its customers – tens of millions of dollars in fuel costs over the next 10 years compared to current fuel-cost estimates, Michael Osborne, Austin Energy’s special assistant to the general manager, told the advisory Electric Utility Commission last week.

 

“For years the balancing act has been between inexpensive power and sustainable power,” said Council Member Bill Spelman, who also backs the project. “If we can get sustainable power for 4 cents per hour, we don’t have to strike a balance anymore.”

 

In July, Osborne told the Electric Utility Commission that utility staff had begun discussions with two private companies to purchase wind power from wind farms in South Texas.

 

One of the agreements would be with an arm of Duke Energy, which is headquartered in Charlotte, NC. The project would have about 87 wind turbines that would generate up to 200 megawatts, enough electricity to power 50,000 to 60,000 homes. The project would be built in Cameron and Willacy counties near Harlingen.

 

The project would be part of the Los Vientos wind farm being built by Duke Energy Renewables.  Duke Energy and CPS Energy, San Antonio’s municipal electric utility, announced earlier this month that it had signed a long-term agreement to also purchase 200 megawatts of wind energy from Los Vientos 1.

 

The second Austin Energy agreement would be with MAP Royalty Inc. of Palo Alto, Calif., for a project with about 57 wind turbines that would generate up to 91 megawatts of energy. The project would be part of the Cedro Hill wind farm east of Laredo in Webb County. The initial phase of the wind farm began commercial operations in December 2010, with all of the power going to CPS Energy.

 

Preliminary estimates show that Austin Energy would pay a total of $40 million to $45 million a year for energy from the two projects that were announced in July. The agreements would be in place for 25 years, and Austin Energy would have the option to purchase those projects in the future.

 

The city-owned utility is also planning to enter a long-term agreement to purchase power from a third South Texas wind farm, and add another 200 megawatts to the utility’s renewable-energy portfolio, according to utility officials.

 

Austin Energy staff plans to present details of all three projects to the Council this week, and to seek Council approval of the final agreements in September or early October.

 

All three projects would be on line by the end of 2012, and, thanks to the prevailing winds in the region, all three would generate power when it is most needed in the summer afternoons and evenings, according to Osborne.

 

If the City Council approves the three projects, Austin Energy soon would be getting 30 percent of its energy from renewable energy – putting it within striking distance of its goal of generating 35 percent of its energy from renewable energy by the end of 2012, utility officials estimate.

 

In all three cases the projects would be built and operated by private companies and Austin Energy would pay only for the power it receives. Austin Energy would pay a non-escalating fixed price of between $35 and $45 per megawatt-hour of energy produced, comparable to power purchased by plants fueled by natural gas, according to city documents.

 

“We believe this (third) project is just as good as the other two – and the other two are very promising,” Osborne told In Fact Daily. “We would be getting in at the optimum time with a resource that fits our (energy) load.”

 

The third site is located on 75,000 acres north of Harlingen and would be an expansion of an existing wind project, Osborne said. He declined to discuss additional details until the negotiation process is further along. 

 

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