Resource Management Commission asks for audit of Austin Energy district cooling system

Austin Energy may soon be on the hook to set the record straight on its District Energy & Cooling System, as a proposal from the city’s Resource Management Commission to conduct an audit on its finances makes its way to City Council.

The resolution, brought forward by Commissioner Paul Robbins, comes after the utility proposed selling the system to a third party last July. Austin Energy claims the operation has not proven profitable, though it also says it has since paused moves to put it up for sale.

The resolution, which passed despite abstentions from Commissioners Charlotte Davis and GeNell Gary, notes that the system affords roughly 28 Megawatts in energy savings during peak air conditioning season. As the utility moves forward with a new Resource, Generation, and Climate Protection Plan tackling the challenges posed by increasing demand, Commissioners argue those savings are worth fighting for.

“The peak load reduction from the District Energy and Cooling System lowers Austin Energy’s wholesale electricity purchase costs for all Austin Energy customers,” reads the resolution. “Expansion of the District Energy and Cooling system is an important strategy to save more energy and reduce carbon emissions as the new Austin Energy generation plan is implemented.”

Powered by seven plants across the city, the District Energy & Cooling System provides an energy efficient alternative to traditional HVAC systems, distributing chilled water to meet the air conditioning needs at commercial and residential buildings opting in to the program. The water is cooled by large thermal energy storage systems that make ice overnight, while electricity costs are lowest. At the same time, participating buildings are shielded from investment and maintenance costs incurred by less efficient, standalone heat pumps.

The system currently serves hotels, residential complexes, and city service buildings in Downtown Austin and the Domain, as well as Austin Community College’s Highland Campus and a number of hospitals in Mueller.

While Robbins has attempted to gather information on the system’s finances on an independent basis, Commissioners agreed that an audit by city staff would operate more efficiently, and that further discussion would benefit from third party expertise. The move would be the first time the program has undergone financial investigation.

“We are trying to determine as a Commission if the District Chilling System can be financially repaired,” said Robbins at the Resource Management Commission’s February 18th meeting. “For that to occur, we need to understand what each customer is currently paying, what they need to be paying in order for the system to be whole, and the date at which their contracts are up…so that customers who are not paying their fair share can have their rates raised.”

Next, the resolution will move forward to City Hall, where Council will decide to endorse or reject the proposal. If approved, Council will directly oversee the audit’s implementation and results, rather than the City Manager (acting City Manager TC Broadnax led the charge on considering the system’s sale last summer).

Readers can learn more about Austin Energy’s District Energy and Cooling system at the utility’s website.

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