Electric Utility Commission sounds alarm on Austin Energy peaker plant plan, hoping for alternatives

Pivoting from its now-scrapped draft, Austin Energy is putting the finishing touches on its long-awaited Resource, Generation and Climate Protection Plan proposal, just in time for a vote at the very last City Council meeting of 2024.

But first, the plan will face the judgment of the city’s Electric Utility Commission, which voiced concern last Monday at the proposal of two new natural gas peaker plants posed to alleviate gaps in the utility’s store of local generation resources. With trepidation about environmental impact, commissioners have issued a series of their own demands for the plan, which it will take up in a vote next Monday.

The EUC’s draft recommendation asks the utility to reconsider its natural-gas-friendly approach and instead pursue ambitious targets to expand load-easing energy efficiency and demand response programs while beefing up its local solar and battery storage infrastructure. Specifically, the resolution asks Austin Energy to add at least 500 megawatts of local solar, 2000 megawatt-hours of battery storage capacity and 50 MW of geothermal energy storage by 2035, in addition to reducing peak demand by at least 629 MW.

While the utility maintains its commitment to move aggressively on local renewables, Deputy General Manager Lisa Martin has expressed hesitation at an immediate break with natural gas, arguing that peaker plants could be the tool that best positions the utility to reach long-term climate goals, such as exiting the Fayette coal plant that accounts for nearly 85 percent of the utility’s carbon footprint.

“Right now, the technology available to meet our near-term risks are these more efficient peaker units. The idea is that they would only be used when needed, and they are more efficient than our current generation,” Martin said. “That generation gets us closer and closer to our carbon-free goal, and then either that technology has evolved so we no longer need the peakers in 2035, or we do something like carbon capture.”

To meet demand, Austin Energy estimates the peakers would run at a yearly average of 12 percent capacity, or around three hours per day, and would be equipped with selective catalytic reduction equipment to significantly reduce nitrogen oxide emissions. Still, when it comes to carbon capture, commissioners are skeptical of the nascent and expensive technology, adding it has yet to prove a realistic solution for peaker plants with inconsistent operating patterns.

Before investing in peakers, the EUC’s draft resolution asks that Austin Energy conduct a third-party analysis to prove that generation needs cannot be met with nonpolluting resources, and identify the projected cost of associated environmental impacts. The resolution also poses that the utility pay a set fee per ton of pollutant emissions to the Office of Sustainability to be used for air quality measures such as tree planting.

As Austin’s air quality continues to fall below EPA standards, the impact of pollutants will continue to be a hot topic at Council, particularly for residents of districts 1 and 2, where the plants will likely be located.

“Austin Energy’s existing gas-burning power generators at the Decker Creek Power Station and the Sand Hill Energy Center are located in East Austin, in close proximity to lower-income communities of color and a school that predominantly serves children of color,” the EUC’s draft resolution reads. “Adding more gas-burning generators that would increase pollution in either of those communities and would be contrary to the commitments of the Austin Climate Equity Plan.”

The Electric Utility Commission will take up its resolution for a vote on Monday, Dec. 2. From there, its comments will go to Council, which will take a vote of its own on Thursday, Dec. 12.

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