Austin Energy, advisory group move toward presenting plans to Council

Austin Energy has seemed to be at odds with environmentalists over its updated power generation plan. And it is likely that the working group tasked with helping the utility come up with a new plan for fueling Austin’s electricity needs will be skeptical about the utility’s plan for reaching carbon neutrality by 2035.

City Council, meeting as the Austin Energy Utility Oversight Committee on Tuesday, heard from AE General Manager Bob Kahn and Chief Operating Officer Lisa Martin, as well as two environmentalists speaking during citizen communication. Al Braden, a member of the Electric Utility Commission working group, and Diana Prechter asked Council to direct the utility to move faster in eliminating fossil fuel from the utility’s portfolio. Braden said it was especially important that Austin “hold the line” on the utility’s commitment not to build any new fossil fuel plants. He said it seems likely that AE will want to build a new gas plant either at the Decker Creek power station or at the Sand Hill power plant.

Kahn described the timeline for coming up with a new resource generation plan for the utility. It started in spring of 2023 and continued through January. Kahn told the Council that the EUC working group was supposed to come up with final recommendations on Tuesday. He said it would be fine if they were done in the next couple of days. The group is supposed to present their recommendations to the EUC on Feb. 12.

Late in the day, the Austin Monitor learned that members of the working group had just completed their final meeting and arrived at a consensus about what should happen next. One member of the group, Paul Robbins, a well-known environmentalist who sits on the Resource Management Commission, said the 23-page report would recommend that Austin Energy use no fossil fuel at all after 2035. As for the fossil fuel plants Austin Energy is currently operating, Robbins said, the group is recommending that they be phased out gradually.

Austin Energy is apparently planning to build a hybrid plant that will eventually run on hydrogen but would start with natural gas. Robbins said the group recommended “further study.” As for Robbins, he said he is “highly skeptical” about a hydrogen plant.

The timeline designed at the beginning of the process indicates that the Council oversight committee will meet to receive final recommendations on Feb. 27 and vote on those recommendations on Feb. 29.

Council members Alison Alter, Vanessa Fuentes and Ryan Alter all agreed that two days was insufficient time to consider and vote on a new generation plan. Alison Alter said the generation plan typically has “a lot of really technical materials.” She suggested that Council get a presentation on Austin Energy’s new plan on Feb. 13, which is one day after the EUC is supposed to meet with the working group and come up with its own recommendation.

On Tuesday, 35.4 percent of Austin Energy’s electricity was generated by solar facilities, 7.4 percent was from the biomass plant and the remainder, 57.2 percent, came from nonrenewable sources, according to the utility’s website.

According to a survey done by the utility, 38 percent of customers responding to the survey ranked reliability as the most important factor. Another 28 percent ranked affordability as the most important thing for them. The same percentage rated environmental sustainability as the most important factor. Finally, 6 percent said cost stability was most important.

The Monitor asked utility spokesperson Matt Mitchell to describe how Austin Energy buys and sells power. Unlike many other utilities, Mitchell said, Austin Energy is “vertically integrated,” which means it has its own power plants, transmission and distribution system. This gives the utility lots of flexibility.

“We have power production agreements with solar and wind farms, the South Texas Nuclear Project, with Fayette coal plant and also with the biomass facility in Nacogdoches,” Mitchell said. “All of these produce power.”

Austin Energy sells power on the ERCOT market, as required by law. At the same time, the utility buys power at the lowest available price.

“And one of the things that helps Austin Energy is we have our own generation, so if we have to buy at an elevated price, we also sell at an elevated price. That helps keep prices low for our customers,” adding that the prices are the second-lowest in the state behind El Paso.

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