Thursday, October 23, 2014 by Michael Kanin

Decker decommissioning faces complex hurdles

A key Austin Energy reserve fund that would be used to pay for the potential decommissioning of the Decker Lake gas generation plant has no money that could be used in that effort, according to Austin Energy.

Utility spokesman Carlos Cordova told the Austin Monitor in an email that a City Council-approved Austin Energy fiscal policy for funding such a decommissioning of a non-nuclear plant “should occur four years before the start of plant closure.”

Cordova continued: “The amount to set aside should be based upon a decommissioning study of the plant site. There are currently no funds in that decommissioning reserve and a decommissioning study has not been done. Council resolution 20140828-157, which includes replacing Decker with 600 megawatts of contracted utility-scale solar, will require funding of this reserve in the near future.”

Austin Energy officials would not hazard a guess at the full cost of decommissioning the plant. However, should the utility elect to replace the facility, it has estimated the cost of the construction of new transmission lines to be in the neighborhood of $150 million.

That figure does not include funds for deconstruction of the Decker plant and environmental remediation of the ground underneath it.

Utility officials referred to a future decommissioning study as the only way to provide an estimated cost for that project.

The recent decommissioning of the Holly Street Power Plant has, to date, cost the utility $24 million. The expected cost to complete that work is $33 million.

Utility officials would not say that the Holly remediation would be a fair comparison in costs to a potential Decker decommissioning.

However, a summary emailed to one interested party in 2012 called for $55 million-plus set aside for a potential reserve-funded “retiring” of the Decker and Fayette plants.

Council members approved a new set of resource generation goals for the utility on Aug. 29. As part of that effort, they have called on the utility to prepare for a shuttering of the Fayette power project and a goal of replacing the Decker facility with solar power.

A recent utility response to the task force plan contemplated retaining Decker but modernizing the facility.

Members of a citizen task force have argued against building a new gas plant.

The utility is bound by two affordability constraints from Council: The first is a mandate that requires its rates be in the bottom 50 percent of those offered statewide. The second puts a 2 percent annual cap on any rate increases.

In addition to those restrictions, the generation resolution passed by Council contains language that could keep the utility from implementing the generation changes if those actions are deemed unaffordable.

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Key Players & Topics In This Article

Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.

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