Friday, December 12, 2014 by Tyler Whitson

Council approves 2025 Austin Energy gen plan

Following a several-months-long stakeholder process, City Council approved an update to the Austin Energy Resource, Generation and Climate Protection Plan with goals to 2025 for the new Council to take charge of next year.

Council members made several amendments before adopting the plan at Thursday’s Council meeting. They were eventually accepted by Austin Energy staff as well as environmental stakeholders who each said the additions improve the plan. Mayor Lee Leffingwell cast the sole opposing vote.

Acting Director of the Lone Star Chapter of the Sierra Club Cyrus Reed — who has been a leader in the negotiations with Austin Energy on behalf of environmental stakeholders — told the Monitor after the vote that he is happy with the result.

“I think the Council did a good job of looking at the plan before them and making some modifications, but also making sure that one of the main stakeholders — Austin Energy, which would actually have to implement this plan — felt comfortable with those changes,” Reed said.

Austin Energy spokesman Robert Cullick provided the Monitor with the utility’s perspective. “There were no really substantive changes made to the generation plan,” he said. “We now have a blueprint to move forward, and what we need to do now is to test that with a third-party review.”

The city hopes to achieve 55 percent renewable energy within the plan’s 10-year time frame.

The plan sets goals to consider replacing the Decker steam units with a 500 megawatt combined-cycle natural gas plant, create a fund to begin retiring Austin’s shares of the Fayette coal plant in 2022, issue a request for proposal for up to 600 megawatts of utility-scale solar, reduce energy demand by 900 megawatts and develop a plan for 10 megawatts of grid-ready local storage and as much as 20 megawatts of thermal storage.

In addition, Council amended the plan to include a more aggressive local — or customer-driven — solar goal, following public requests by members of the solar business community.

Reed said he and other stakeholders worked with Council Member Mike Martinez to craft the changes. “The amendment said we’ll get to 110 megawatts by 2020, of which 70 will be customer-sited — otherwise on roof space — and we are going to get to 200 by 2025.”

It also recommends, contingent upon further study, reducing energy demands by an additional 100 megawatts to achieve a 1000-megawatt reduction and issuing a request for information for 170 megawatts of large-scale storage, such as compressed energy storage.

One of the key points of the plan is that it kick-starts an independent review of the proposed natural gas plant, along with between two and four alternative scenarios that would focus on increasing renewable energy investments. It stipulates that pursuit of any contracts relating to the natural gas plant is contingent on the results of the review and future Council action.

Austin Energy staff released a document stating that the utility’s Chief Financial Officer Mark Dombroski plans to consult the Electric Utility Commission regarding the scope of the review Monday, issue a request for proposals for a consultant to conduct it and ask the Council Committee on Austin Energy to review the candidate selections and the assumptions to be used in the analysis.

Reed said that Council made some amendments that help improve that process. “They made sure there’s a role for the Electric Utility Commission at the beginning of the process and also a review at the end of the process, so there’s kind of multiple opportunities for the public to get involved in this independent study,” he said.

They expect to receive a draft of the report by May 29 and present the final report to the Electric Utility Commission and Council by June 27.

Several members of the public aired their thoughts about the plan before Council discussion.

Tom “Smitty” Smith, director of the Texas branch of advocacy group Public Citizen, spoke out against the idea of pursuing natural gas. Though he said that the plan has many goals that are “world-class,” he has serious concerns about the natural gas plant component.

“Natural gas plants fluctuate wildly,” Smith said. “Today, solar and wind are now cheaper than building a new natural gas plant.”

Smith added that the independent study should not focus on whether or not build the gas plant, but how to fill the energy gap that it has been proposed to bridge.

Roger Wood, representing advocacy group the Coalition for Clean, Affordable, Reliable Energy, said that he is concerned about a “lack of commitment” to the affordability goals that Council set in 2011. These require that the utility keep its rates in the lower 50 percent of comparable utilities in the state and not raise average bills by more than 2 percent in a given fiscal year.

Reed emphasized that the plan is simply a set of goals, not requirements. “It’s a road map, it’s not a straitjacket,” he said. “But it sets us in the right direction.”

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

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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