Austin Energy still pondering new generation plan

As part of Austin Energy’s effort to arrive at a new generation plan, the utility has spent this year talking to the public about what is most important to them when they think about electric service. According to Austin Energy’s chief operating officer, Lisa Martin, what the public wants most is reliability in their electric service, but there are other factors nearly as important – such as cost and protecting the environment.

On Tuesday, Martin told the City Council Austin Energy Utility Oversight Committee that the utility is considering 17 different portfolios to see what best addresses priorities of Council and the public. They will be testing out those portfolios in the next few weeks to see what seems to work best for Austin. Martin said she expects Council to vote on Austin Energy’s new generation plan before the end of the year.

Half a dozen environmentalists came to tell Council they do not want a new natural gas plant. However, Paul Robbins, who serves on the Resource Management Commission and has long been devoted to environmental causes, was not among them. Robbins, perhaps surprisingly, has concluded that a new gas plant could be good for the environment.

Robbins later told the Monitor, “I was on the Electric Utility Commission Working Group that unanimously adopted a plan that did not include a new gas plant.  I did not speak at the hearing yesterday to oppose the new plant, in part, because I was speaking on another subject.” He noted that he wrote his article 7 years ago.

For help considering how to prepare for the future, the utility has hired Dr. Michael Webber, a professor at the LBJ School of Public Affairs, who specializes in energy. Webber told Council on Tuesday that utilities, including Austin Energy, need to prepare for unprecedented growth in electricity demand – and that one of the major drivers of the demand is data centers. He said the utility should expedite deployment of a variety of options to ensure that it’s ready for the huge demand that is coming.

He told Council the University of Texas will soon be home to a huge new data center that will use 30 megawatts of power, and it is one of many that could be on the horizon. Options for the utility included thermal power plants, he said, including hydrogen or gas turbines. The idea of new gas turbines has alarmed some members of the local environmental community. However, Webber argued that it is better to use natural gas power plants to produce electricity for electric vehicles than to continue the use of gasoline-powered vehicles, which are a major source of air pollution in Austin.

Deployment of a variety of power generation mixes, including rooftop solar on commercial buildings, will provide Austin Energy an opportunity to improve its overall financial health, which will benefit the community and Austin Energy customers.

According to Webber, building dispatchable power within the Austin Energy service zone improves reliability as well as saving customers money.

Austin Energy’s director of finance, Stephanie Koudelka, told Council that the utility had $1.2 billion in revenues for the third quarter, which was 3 percent under budget. In addition, she said costs “have outpaced Austin Energy revenues by 4 percent as of June. That’s $45 million, which is typical for the utility at this point in the fiscal year. We make up a lot of our revenues in the summer months, so we expect to see that variance smooth out by the end of the fiscal year (Oct. 31).”

The good news for customers is that Austin Energy is lowering the Power Supply Adjustment rate to customers by 5 percent beginning Oct. 1. That’s a typical saving of approximately $2 per month for the average residential customer. The utility is able to do that because of a fully recovered Power Supply Adjustment, she said.

Photo made available through a Creative Commons license. This story has been updated to include Robbins’ comments.

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