A FAR-SIGHTED LITTLE CITY MAKES BIG NEW ENERGY PLANS

Austin Energy Resource, Generation, and Climate Protection Plan to 2020
April 22, 2010 (Austin Energy)

THE POINT
When everybody in Texas was bent on building more coal and nuclear power, city-owned Austin Energy in Austin, Texas, started looking into turning the prolific prevailing West Texas winds into domestically produced, emissions-free electricity.

When the Texas oil industry finally saw the big opportunity in wind and became obsessed with developing it, Austin Energy started pushing for the city to put more of the intense Texas sun to work.

While energy-rich Texans have obliviously indulged in spreading suburbs and unconstrained air conditioning, Austin Energy has been at the forefront of the U.S. environmental community’s clamor for more energy efficient homes, buildings and city planning.

While everybody else was still crying over who killed the electric car, Austin Energy started Plug-In Partners, a movement that organized cities all over the country to promise to buy plug-in hybrid electric cars for their fleets. The tens of thousands of fleet sales guaranteed by Plug-In Partners were at the heart of the drive by major car builders like GM and Nissan to build the battery-electric vehicles that are due in showrooms this fall.

In 2007, while former Texas Governor George W. Bush’s administration blocked national efforts to confront global climate change, forward-thinking leaders in the Texas capital's City Council - to the consternation of Austin conservatives - passed the Austin Climate Protection Plan (ACPP) as part of its Cool Austin - Cool Planet drive.

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In response, Austin Energy has now released Austin Energy Resource, Generation, and Climate Protection Plan to 2020, its far-seeing vision and concrete plans to make Austin sustainable for its three-quarters of a million citizens.

At the heart of the plan are 3 pillars: (1) More New Energy, (2) more Energy Efficiency and (3) the shifting of the utility’s peak load to off-peak hours.

Changes/additions to present resourcing goals for 2020:
(1) Energy Efficiency increased from 700 megawatts to 800 megawatts;
(2) The New Energy portion of Austin Energy’s power increased from 30% to 35%;
(3) The solar portion of Austin Energy’s New Energy power increased from 100 megawatts to 200 megawatts; and
(4) A new goal to cut Austin’s greenhouse gas emissions 20% below the 2005 level.

The report reveals that unlike the vast majority of U.S. utilities, Austin Energy sees its responsibility is not just to keep the city’s lights on but to do so in a clean, affordable and reliable way and to provide its bosses, the people of Austin, with excellent service while doing so.

There are a lot of fossil-foolish and radioactive utility CEOs around the so-called civilized world who need to read this report and see what is possible.

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THE DETAILS
Austin Energy is a municipal utility, owned by the citizens of Austin. It, along with every other city department, was therefore required to produce such a report in response to the City Council’s aggressive 2007 Austin Climate Protection Plan (ACPP). (The City Council’s action may be an indication of why people around the U.S. describe Austin as a stain of blue on a state of red.)

The report is a clear assessment of Austin’s resources, demand and management capabilities. It gives the city’s leaders a picture of what is possible and it comes from people responsible for doing what they say they can do.

The Austin Energy vision has built-in flexibility to accommodate changes in: (1) economic conditions, (2) load, (3) resource price/availability, (4) delivery infrastructure development, (5) technology advances, (6) laws/mandates/regulations, (7) It includes a professional documentation of federal, state and local policies, and (7) ratepayer needs.

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Regular performance reports are part of the plan. It will be reassessed every 2 years.

Ratepayer bills will regularly be compared to those in Houston, San Antonio, Dallas-Fort Worth and other areas for affordability. Austin Energy will set affordability goals by December 31, 2010, and will make no new resource acquisitions of more than 10 megawatts until it does so.

The plan includes goals for air quality improvements, for transmission and distribution increases and for power quality and reliability documentation.

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Specific resources:
(1) Coal. Austin Energy owns 50% of 2 units of the Fayette Power Plant (FPP), which primarily uses coal from Wyoming's Powder River Basin to generate electricity. The Plan will cut ~24% of the power the utility gets from FPP by 2020, which will significantly move Austin Energy toward its GhG reduction goal.

(2) Nuclear. Austin Energy holds some ownership in the South Texas Project (STP), which uses nuclear energy to generate electricity. Nuclear power will not be reduced in terms of absolute megawatts but, because more of the growth in demand will be met by New Energy, nuclear’s share of the utility’s power mix will drop from 27% to 21%.

(3) Natural gas. The Plan will add 200 megawatts of generating capacity to the Sand Hill Energy Center, electricity that can replace much more GhG-intensive coal as well as partner more effectively with wind.

(4) Biomass. The Plan anticipates 150 new megawatts of biomass capacity, beginning with a 100 megawatt Nacogdoches, Texas, Southern Company biomass project excpected to be on line in 2012.

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(5) Wind. The Plan will have Austin Energy getting 1,000 megawatts of electricity from wind power by 2020.

(6) Solar. The Plan will have Austin Energy’s installed solar capacity increase from 100 megawatts to 200 megawatts by 2020. It last year signed a 25-year power purchase agreement for the 30-megawatt output of a Gemini Solar Development Company expected to be available by 2011. Solar will remain a reserve, peak demand source of generation through through 2020.

(7) Austin Energy expects to become 100 megawatts more Energy Efficiency by 2020.

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Overall, because of increases in New Energy, the Plan would reduce natural gas from 30% of Austin Energy’s power mix to 24% by 2020 and reduce coal use from 32% of the utility’s mix to 22%.

The wind power part of Austin Energy’s power mix will double. 8% of the utility’s energy will come from biomass. 3% will come from solar.

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QUOTES
- From the Austin Energy report: “This document is a resource planning tool that brings together demand and energy management options over the planning horizon. Developing the Plan involved extensive analysis of the expected risks, costs, and opportunities to meet the future demand for electricity services. The goals outlined in this document are based on Austin Energy’s current understanding of technology and of national, state and local energy policies… as conditions change, the Plan will be adapted and modified to manage risk, maintain system and service reliability, achieve policy goals, and meet customer demand for excellence in all aspects of service.”

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- From the Austin Energy report: “This plan demonstrates that customers and our community can indeed expect equitable, economic, and environmentally responsible electric services…The initial implementation strategy to achieve these goals is to escalate the use of renewables, increase energy efficiency, and load shifting. This will reduce current and future reliance on fossil fuel generation to meet Austin Energy customer load and will reduce CO2 to better position the utility regarding probable future federal requirements…Austin Energy must be financially sound, the cost of electric service must be affordable for all classes of customers (with particular attention to the low income and disadvantaged), and rates must be competitive to ensure the retention and attraction of businesses for a strong local economy…[T] the recommended plan will respond to system needs, changing technologies and market conditions to ensure consistent power quality and reliability…The process for implementation and ongoing review…will be transparent…”