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Austin Energy seeks new power purchase agreement

Thursday, June 22, 2017 by Sommer Brugal

Austin Energy requested the approval of a 15-year power purchase agreement at the Electric Utility Commission meeting Monday evening. The recommended purchase is for 200 megawatts of utility-scale, wind-generated electricity capacity expected to cost $17.5 million per year. It is estimated to cost a total of $262.5 million. Khalil Shalabi, Austin Energy’s vice president of energy market operations and resource planning, explained why the utility feels it’s a good time to enter into a power purchase agreement. “The reason we’re doing it now is because the production tax credits are to be rolled off by the federal government unless they’re extended another time,” said Shalabi. He said this technology is quite mature and prices for such technologies aren’t expected to go down. Still, many commissioners questioned the higher-than-usual price. According to Shalabi, though, the utility stands to gain because this project is set to generate high revenues. “This particular project is a coastal wind project, and we saw that it really did generate a lot of revenue during peak hours during the day,” he said. The commission passed the request unanimously, and the proposal is scheduled for discussion before City Council today.

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