NEW ECONOMIC REPORT: Compared to Continued Operation through 2040, Replacing San Antonio’s Remaining Coal Units with Renewable Energy could save customers almost $1 Billion over 15 years

SAN ANTONIO, TX - Today, an economic analysis by Synapse Energy Economics was released and found that CPS Energy could save almost $1 billion dollars for San Antonio residents by relying on renewable energy and storage alternatives versus operating both Spruce 1 and 2 coal units from 2026 through 2040. 

Synapse’s report examines alternatives to San Antonio’s continued reliance on coal as Bexar County begins to wrestle with ozone nonattainment; and as CPS Energy continues to tout the benefits of the Flexible Path without any firm commitments to the community This updated report’s findings show that CPS Energy should immediately begin a public planning process for a near term future for the San Antonio region without coal generation. 

“Our analysis found that by replacing the Spruce units with clean energy alternatives, CPS Energy could benefit rate payers an average of $85 million each year from 2026-2040.” said Avi Allison, Synapse Energy Economics Expert and Report Author. “Continued reliance on coal is a risky financial position for CPS Energy that likely results in missed opportunities to reduce rates or save money. ” 

Synapse’s report identifies that other utilities have engaged both the public and the power sector by issuing broad public requests for proposals for coal replacement options. Given the widely available options of low-cost power generation alternatives within Texas and the evolving costs of renewable and battery storage technologies, such a practice would be a sound way for CPS to begin to determine its best options for replacing the Spruce units. 

“This report makes it clear that CPS Energy must, at a minimum, open up a public planning process to evaluate the future of San Antonio’s energy. Across the country, including Texas, meaningful public input has resulted in plans to replace coal with clean energy, all at financial savings to the utilities. San Antonio deserves this opportunity to reduce rates and clean up the air” said Chrissy Mann, senior campaign representative with the Sierra Club’s Beyond Coal campaign.  “We are calling for community-wide planning process to ensure that a plan to phase out coal and replace with clean energy happens in an equitable way.” 

San Antonio is one of the fastest growing cities in the nation; leads the nation in economic inequality; and has some of America’s dirtiest air. In fact, recently Bexar County has been designated as nonattainment for smog (ozone) and the Spruce coal plant is a major source  of smog forming pollution. CPS Energy’s current Flexible Path ignores this responsibility and contemplates running the Spruce 1 coal unit with no additional pollution controls through 2030.  In addition to smog pollution, coal burning releases a whole host of other dangerous pollution like toxic metals and soot. And this pollution does not impact all communities the same.  

“Ozone, particulates, and other compounds released during coal burning contribute to the development of asthma. Acute and chronic bronchitis can be caused by fossil fuel particulates from coal burning and is five times more harmful to your heart than other fossil fuels,” said Dr. Adelita Cantu Associate Professor UT Health San Antonio School of Nursing and the Alliance of Nurses for Healthy Environments.  “Asthma is most prevalent chronic disease in San Antonio among children across all age groups and ethnicities. The black and latino population on average bear a 'pollution burden' of 56% and 63% excess exposure, respectively, relative to the exposure caused by their consumption. Even though people of color are consuming less and contributing less to air pollution they are impacted more by the consumers who are demanding more energy. This is pollution Inequity.”

“There are issues around climate change and sustainability that we want to raise with CPS Energy. We’d like to ask them to listen to the people experiencing this in their neighborhoods.

We have the know how, we have the information available, such as this report, that shows how much action is needed now,” said Jessica O. Guerrero, Board Member Vecinos de Mission Trails and the San Antonio Housing Commission. “We cannot afford to wait and see - we can’t wait for the housing crisis to get any worse or the climate crisis to advance any further. The time is now for CPS to step up and join city hall on engaging with communities impacted like the residential owners and small businesses ratepayers. It is these communities who are ready and willing to figure out solutions.”

“These conversations have been happening for a long time and we are really excited to continue having these conversations until we see just energy reform in San Antonio and South Texas. Texas is a leader in greenhouse gas emissions in the United States and while the energy business is booming in South Texas, many working families in the area are impoverished and marginalized from decision making processes that impact them. San Antonio ratepayers, particularly working class residents on the South side have shouldered the burden of pollution, toxic emissions and inequitable rate increases for years. Lived experiences are just as important as scientific reports, said Beto De Leon, Environmental Justice Coordinator with the Southwest Workers Union. “In the past year alone we have had over 2,000 residents that we have talked to that are really interested in the successful passing of the Climate Action Plan, the SA Climate Ready Plan for San Antonio to transition away from extractive energy sources, like coal. We need something more restorative for our community. We want to see a real, serious evaluation of what a renewable and sustainable San Antonio can look like.”

You can find the recorded telepresser here.

Principal Findings From Synapse Report:

• In 2017, Synapse Energy Economics released a report, “The Shaky Economics of the J.K. Spruce Power Plant” (https://www.synapse-energy.com/project/shaky-economics-jk-spruce)

• Tuesday’s report reevaluates the economics of the Spruce Plant with new details on a replacement scenario and financial risks related to the continued reliance on coal to power San Antonio.

• Even under a specific set of future circumstances that would be favorable to the continued operation of the coal plant, the Spruce units will be less profitable than the renewable energy resources that could replace them.

• Replacing Spruce with a portfolio of non-emitting resources would likely save money for CPS ratepayers. CPS has identified a potential replacement portfolio consisting of 1,000 megawatts (MW) of wind, 800 MW of solar, and 450 MW of energy storage. We estimate that retiring the Spruce units in 2025 and replacing them with this portfolio would result in average savings of approximately $85 million per year from 2026 through 2040.

• The Spruce units face substantial environmental compliance risks.

• If the Spruce units are uneconomic, retiring them early would be unlikely to harm CPS’s credit rating.

• CPS’s resource public planning process is inadequate and lags behind those of its peers.

BACKGROUND: The Sierra Club retained Synapse Energy Economics to conduct a review of the economics of CPS Energy’s Spruce units and to evaluate alternatives to continued operation of the Spruce units past 2025. In conducting this analysis, Synapse used publicly available data to evaluate the Spruce units as merchant-equivalent generation, testing whether the units have earned enough energy market revenues to offset fuel, operation and maintenance (O&M), and ongoing capital costs. In addition, Synapse used a custom-built, cash-flow model to evaluate the likely future economic performance of the Spruce units relative to the market. Finally, Synapse compared the likely performance of the Spruce units to renewable energy alternatives.