Workman: Austin’s energy purchases are headed in wrong direction


The Austin City Council has taken action to approve the purchase of a large amount of solar power, running contrary to their stated goals on affordability. City energy policies should be driven by affordability, economic realities and the need to deliver reliable electricity to customers. Instead, these policy decisions are being driven by social engineering.

City leaders have tried to make the argument that their recent solar purchases carry the cheapest cost per kilowatt hour (kWh) of solar power in the nation — and perhaps they are. However, the spot market prices for traditional sources of energy are much less than the long-term KWh cost of solar power. The city also attempted to justify the purchase by saying that when natural gas prices increase, the purchase of the solar power at 3.8 cents/KWh will turn out to be a better deal for the Austin ratepayer. The problem is, there is no anticipation of natural gas prices increasing any time soon. Solar prices will continue to fall and, perhaps, someday will be as competitive as traditional sources of energy. If we need to purchase power now, we should be purchasing it at the lowest possible cost to the ratepayers.

Furthermore, the city’s outrageous cost per kWh (about 15 cents/KWh) for its Webberville solar plant and the nearly-never-used biomass plant — which costs around $54 million per year — have increased cost burdens paid by ratepayers. Both of these purchases, by previous councils, were based purely on the desire to be “green” without regard to the cost to the ratepayers of Austin Energy. They are unnecessarily increasing rates for Austin Energy customers both inside and outside the city limits when power could be purchased for as little as 2.5 cents per kWh.

My concerns remain deep, even after meeting with the Austin mayor, his staff and Austin Energy leadership. The meeting, which was requested by the mayor to help me understand, failed to persuade me that the decision was about affordability.

Austin Energy ratepayers know current costs are unaffordable. The City Council has made matters worse with their recent decisions, adding to the already-high costs shouldered by captive ratepayers. The city needed to, at a minimum, establish a plan to move Austin Energy rates into at least the lower 50 percent of Texas electric rates.

I believe the increasing cost burden to the Austin Energy ratepayer will result in the loss of jobs and decisions by job-providing companies to decline to expand or locate in Austin.

Why are the actions of a city-owned utility the concern of the state legislature? Austin Energy is a division of the Austin city government and its ratepayers are captive customers to a state-law approved monopoly.

During this past legislative session, I advanced a measure that would have helped alleviate the cost burden to Austin Energy ratepayers. This bill and a companion Senate bill were not pursued further after the mayor committed to “moving to end the practice of charging rate payers for expense[s] that might be hard to defend as being ones appropriately paid by ratepayers.” The city council’s recently adopted budget and dramatically increasing solar purchases are arguably in conflict with this commitment.

Austin Energy’s own presentation to the City Council’s Austin Energy Utility Oversight Committee makes it clear the mayor and council know the risks of increasing the costs to Austin Energy ratepayers: “Any cost additions on AE’s part risks further erosion of our competitive position and could invite legislative intervention.”

I will continue to closely watch these and other actions to assess what adjustments will be needed to state law to help Austin Energy customers to purchase reliable, affordable electricity

First elected in 2010, Workman represents District 47 in the Texas House of Representatives, which includes most of western Travis County and portions of southern Travis County.


Reader Comments ...


Next Up in Opinion

Letters to the editor: June 25, 2018
Letters to the editor: June 25, 2018

The Austin City Council voting on CodeNext dishonors the act of voting, the 2012 council vote for Imagine Austin and the individuals who sacrificed for voting rights and our form of government — veterans, first responders and citizens. It’s time to stop the process, otherwise the city’s goals set forth in Imagine Austin will go unfulfilled...
Opinion: Return of the blood libel

The speed of America’s moral descent under Donald Trump is breathtaking. In a matter of months we’ve gone from a nation that stood for life, liberty and the pursuit of happiness to a nation that tears children from their parents and puts them in cages. What’s almost equally remarkable about this plunge into barbarism is that it&rsquo...
Opinion: On being decent

Not too long ago, I returned to my parked car and found a sheet of paper on the windshield bearing an expletive-laden message. The anonymous poster had obviously gone to some effort to make these flyers on his home computer — complete with color cartoon figures and such. It let me know what an (obscenity) I was. My sin was having parked my car...
Herman: Beto O’Rourke flashes star power at Texas Democratic Convention
Herman: Beto O’Rourke flashes star power at Texas Democratic Convention

Some takeaways taken away from three days with 7,500 or so delegates at the Texas Democratic Convention: In general, the Dems didn’t approve a platform with nearly the volume of nutty stuff the Repubs did at their convention. Oh, there’s plenty in the Dem platform that some folks won’t like, but there’s nothing approaching the...
Facebook comments: June 24, 2018
Facebook comments: June 24, 2018

As reported by the American-Statesman’s Johnathan Silver, Austin-based nonprofit Southwest Key Programs spoke out against family separations at the border after President Donald Trump signed an executive order ending the practice. The organization posted a statement on Facebook that said, “Southwest Key Programs does not support separating...
More Stories