Council pushes Austin Energy on solar solicitation
Tuesday, April 7, 2015 by Tyler Whitson
To RFP or not to RFP? According to City Council, the answer is yes, and ASAP — or at least by April 15.
Council voted Thursday to impose the deadline for Austin Energy to issue a request for proposal, or RFP, for up to 600 megawatts of utility-scale solar power generation and require that the utility consider the resulting bids as part of an upcoming independent 500-megawatt power gap study. The move will solicit offers from potential contractors but will not lock the city into an agreement.
Council Member Don Zimmerman cast the sole opposing vote.
Mayor Steve Adler referred to the resolution that sets the requirements as a “suspenders and belts” measure. He noted that Austin Energy General Manager Larry Weis, responding to an unofficial request from Council Member Leslie Pool at the Austin Energy Utility Oversight Committee meeting March 26, agreed to inform his staff to issue the RFP within that period.
The resolution, however, adds more specificity to Pool’s request, noting that the RFP should include options for both power-purchase agreements and direct ownership of solar generation, and sets a June 1 response deadline for potential offers.
It also states that the city should not contract with a consultant for the upcoming gap study until it has issued the solar RFP and that the consultant should use the resulting solar rates to determine affordability of renewable scenarios in the study.
Austin Energy Chief Operating Officer Cheryl Mele reiterated Weis’ statement. “We do have a draft, and we can get that out on the street within the time frame that’s being requested here.”
Council Member Delia Garza, who sponsored the resolution, said she was following up on a March 23 Electric Utility Commission resolution, which recommended that Council set the requirements.
“This is simply trying to get those numbers,” Garza said, referring to the potential costs of investing in solar energy. “It does not tie our hands.”
Electric Utility Commission Vice Chair Karen Hadden, speaking as a member of the public and not on behalf of the commission, explained why she wrote the original resolution. “We’ve got a time factor ticking away here,” she said, noting that the 30 percent federal solar Investment Tax Credit expires for projects that are not in service by the end of next year, after which it drops to 10 percent.
“We want to take advantage of that, we want to get the best deal possible,” Hadden continued. “Now is the time. Now we have an opportunity to find out what’s out there.”
By adopting the resolution, Council was following up on the Austin Energy Resource, Generation and Climate Protection Plan to 2025 that the previous Council passed in December. The plan “adopts and acts immediately on” issuing the solar RFP to “commence the process toward a generation portfolio consisting of 55 percent renewable energy.”
The plan also directs Austin Energy, in the same language, to release an RFP for a consultant to conduct a study that will determine the best way to fill a 500-megawatt gap that the ambitious plan creates. It recommends shutting down the Decker Creek natural gas power plant and kick-starting the retirement of the city’s stake in the coal-powered Fayette Power Project.
The gap study will consider whether the best way to move forward with the plan is to construct the 500-megawatt combined-cycle natural gas plant that Austin Energy has proposed, or to rely solely on renewable energy alternatives that solar and clean energy advocates favor.
Austin Energy issued the gap study RFP in late January and closed it about a month later, but has not yet brought its recommendation for a consultant forward to Council.
Beki Halpin, one of many environmental advocates who spoke in support of the resolution before Council voted on it, compared the idea of the city issuing the solar RFP in conjunction with the gap study to a family shopping for a new car.
“You’re going to go out and get all of the information you can about that car, and you’re going to take it home to your kitchen table, and you’re going to run the numbers, and you’re going to decide which car you’re going to buy,” Halpin said. “But unless you have good numbers, you’re not going to make a good decision. So, part of what this resolution does is say, ‘Let’s get good numbers.’”
Garza followed up on Halpin’s metaphor. “It’s like going out and shopping for something and making sure that you have the most accurate information out there to make the most informed decision,” she said. “The urgency is that we’re trying to inform that gap study, making sure we have the best information to inform that study.”
When asked by Council Member Ellen Troxclair if there is a significant cost involved with issuing RFPs, Mele said there is staff time involved, but the impact is “not significant.”
Mele added, however, that there is a cost on the part of those who may respond to the solar RFP, who may consider whether it is “a credible solicitation.”
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