In windswept West Texas, Austin Energy’s future is powered by the sun


Highlights

Austin Energy’s 15-year agreement with East Pecos Solar Facility is one of four recent solar deals.

Pecos County solar plant uses 1.2 million panels, in 2,000 rows, generating 120 megawatts of “green” power.

East Pecos plant and its surrounding vista are the future vision of power generation for environmentalists.

In the desolate quiet of West Texas, miles from any post office or gas station, sits an ocean of glass and silicon pointed skyward. Here, rows of solar panels fill 1,000 acres of this windswept landscape — tracing the path of the sun, shimmering in its light, soaking up its rays and converting them into electricity.

The new solar plant, about a half-hour’s drive east of Fort Stockton, is Austin’s latest salvo in its years-long push to combat climate change by transitioning from fossil fuels to renewable generation, sometimes at higher cost.

“Right now, with solar prices dropping as much as they have, they are the best value now and, clearly, our best value 20 years from now,” said Michael Osborne, a former official at Austin Energy, longtime environmental activist and current member of the city’s electric utility oversight commission. “They make us money, they’ll make us money in 10 years, and that’s without any carbon costs.”

An examination of the East Pecos Solar Facility reveals its size: The Southern Power-owned facility consists of 1.2 million solar panels, capable of generating 120 megawatts of electricity. The Alabama-based firm announced the plant had begun commercial operation Wednesday.

Austin Energy has agreed to purchase all of the power it generates for the next 15 years, one of four major solar energy deals done by the city-owned utility since 2014. All told, Austin Energy has signed deals to receive an estimated 626 megawatts of solar energy by 2018, exponentially more than the 30 megawatts it had in 2014.

“Austin Energy was an early adopter of West Texas wind power and is pleased to take delivery of the power generated by the East Pecos Solar Facility,” Austin Energy General Manager Jackie Sargent said in a statement.

The East Pecos contract was one of three approved by the City Council in October 2015, at an estimated collective price of $425 million over the lifetimes of the agreements. At the time, utility officials projected the deals would increase the average household electric bill by $8 to $11 annually.

Several months later, however, the City Council overhauled Austin Energy’s rates, cutting the typical residential customer’s bill by $62 a year.

East Pecos is the first facility from that 2015 trio of Austin Energy contracts to start operating. Once the second, 170-megawatt facility opens in late 2017 in Upton County, not far from Pecos County, Austin Energy expects to be receiving about 37 percent of its electricity from renewable sources.

The third facility, also in Pecos County, is slated to open in 2018, producing an additional 150 megawatts.

All three were preceded by Roserock, a 157-megawatt West Texas solar farm that opened late last year under a separate contract with Austin Energy.

Under mandates from the City Council, the utility is supposed to generate 55 percent of Austin’s electricity from “green” sources by 2025, up from an earlier target — set in 2009 — of 35 percent by 2020. By the end of 2017, utility officials project solar panels will make up 7 percent of the utility’s total generation, with wind accounting for 30 percent.

Just counting the power plants already online, Austin Energy accounts for 39 percent of the solar power and about 7 percent of the wind power generated in Texas today.

However, Austin Energy’s “green” power push has its share of critics, including conservative lawmakers who believe the City Council is using the utility to pursue a political agenda and stick customers with a higher bill in the process.

“They’re so concerned with being ‘green,’ they’re burdening their citizens with higher rates,” said state Rep. Paul Workman, R-Austin. “I’m fine with renewables, but don’t make your customers pay for it.”

Workman introduced four bills this session that would dramatically reshape Austin Energy’s operations, including requiring the city to appoint an independent board of directors for the utility and stripping it of its customers outside of the city limits. One of the bills was taken up Wednesday by a House committee, which left it pending.

Austin Energy declined to provide the average costs it pays for solar and wind energy versus natural gas and coal.

But a December 2016 study by the asset management firm Lazard found that, nationally, alternative energy can be cost competitive with conventional sources of energy. Depending on a range conditions, and leaving aside subsidies enjoyed by a range of generators, the firm found that utility-scale solar can cost as little as $46 per megawatt-hour (roughly the amount of electricity used by an average home each month) to produce; wind, $32; nuclear, $97; coal, $60; gas plants, $48.

An analysis provided by Austin Energy shows its average residential electric bill is the second lowest in the state, with the caveat that its customers use among the lowest amounts of energy.

For years, the utility’s “green” energy efforts were colored by its 2008 deal to buy expensive electricity from an East Texas wood-burning “biomass” plant.

The plant has largely sat idle since rumbling to life in 2012, despite the 20-year, $2.3 billion power purchase agreement, because it is unable to compete against cheap natural gas. Even though it’s not producing power, Austin Energy still must pay fees to cover operating costs, which the utility has repeatedly refused to disclose.

Anger over that deal led state Sen. Kirk Watson, D-Austin, to unsuccessfully push in 2013 for the council to transfer management of the utility to an independent board. On Friday, Workman mentioned it as an example of utility management gone wrong.

“We opposed it at the time because it was more expensive than alternatives,” said Tom “Smitty” Smith, the Texas director of Public Citizen, which campaigned to get Austin Energy to shut down the portion of the Fayette coal power plant it co-owns with the Lower Colorado River Authority. “The City Council got taken for a ride by a fast-talking utility.”

Getting 100 percent renewable energy isn’t practical in the near-term, utility officials say, as they still need to provide power when the sun doesn’t shine or the wind doesn’t blow.

That doesn’t mean they’re investing in new fossil fuel plants, either: Low natural gas prices have slowed Austin Energy’s plans to build a new half-billion-dollar gas plant at its Decker Creek facility to replace older, less efficient units there, utility spokesman Robert Cullick said.

For environmentalists, the vista surrounding East Pecos is the model of what the future of power generation should look like. There’s another major solar power plant being built just down the road. Giant wind turbines line the tops of the nearby rocky mesas .

And for Pecos County, the glass-covered fields of solar panels and the giant wind turbines provide jobs and an element of financial security to a region long defined by oil booms and busts.

“It’s given us stability. It’s given us an added revenue base,” Pecos County Judge Joe Shuster said. “It is a good thing for us. We’re happy with it. If we could just get some more power lines out here, we’d build more.”

Average electric bills and use for residential customers (kilowatt/hour):

• El Paso Electric: $72/638 kWh

• Austin Energy: $97/898

• CPS Energy (San Antonio): $123/1,151

• Reliant Energy*: $157/1,169

• TXU*: $165/1,224

* Reliant Energy and TXU serve many areas, including Houston, Dallas, Corpus Christi and West Texas.

Source: 2017 Austin Energy presentation



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