Keeping up with aggressive business and residential growth throughout the Austin area is a persistent challenge for those involved in supplying energy reliably to the city while also trying to move away from fossil fuel sources for generation needs. Speakers at a recent Austin Chamber infrastructure summit said the demand coming into the area means Austin Energy, the city-owned utility company, will need more transmission lines and related capacity components to prevent more widespread outages like those in early 2021 and 2023.
Michael Enger, vice president of market operations and resource planning for Austin Energy, said the demand caused by major companies such as Tesla and Samsung has added to the capacity problems that have occasionally caused dramatic short-term price increases for power. Enger said much of the capacity problem comes from having too few transmission lines to import power from sources outside the Austin market, which leads to congestion and “price separation issues.”
“It will take more transmission, more distribution, in combination with more local generation that helps mitigate those risks,” he told Austin Monitor. “Load will continue to grow in Central Texas. This is a very attractive place for businesses to come. And so as load is growing, we need to be building up more transmission just to meet those needs. And so by focusing only on one solution, we may be hampering our ability to really be successful in mitigating that risk. A combination of local generation, potentially local batteries, and some more transmission distribution, all in concert, could probably give us a better solution going forward to help maintain affordable, reliable rates for our customers.”
To characterize the state of local demand, Enger said last summer the city saw a day when peak load exceeded 3,000 megawatts, an event that wasn’t forecast to happen for several more years, based on recent five-year projections. Similarly, there was occasional demand over the winter in excess of 2,700 megawatts, also ahead of the utility’s forecasts. Those new usage levels can cause supply problems if the state’s network of power generation facilities, which schedule their production and operation months in advance, aren’t running at a suitable level.
Asked about the recent national push to connect Texas and the Electric Reliability Council of Texas to the national power grid – a move intended to improve reliability and prevent outages due to capacity issues – Enger said that it would take several years and substantial state and federal investment to make any impact.
“There is a lot that would need to happen for that to be able to move forward and come to fruition. There’s some significant costs that would need to be incurred as well, so that’s not necessarily a nearer-term solution,” he said. “Having more interconnections could potentially provide more reliability in certain circumstances, but that is not going to address any of the local cost pressures that we’re seeing.”
Allen Fore, vice president of public affairs for national infrastructure firm Kinder Morgan, put Austin in the context of other fast-growing cities such as Denver, Chicago and Los Angeles – with local governments that are responding to the call for reliable, green energy systems.
“If you’re looking at growing your tax base and creating jobs and all the things that go with businesses … reliable energy is a key leg on the stool. Businesses look at that and say, ‘OK, what do you have now? How are you preparing in the future? And how can you accommodate our growth?’” he said. “In addition to having a qualified workforce, and Austin certainly has that, having the space, the facilities, the roads and bridges and all of that, energy is certainly a part of that.”
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Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.
