"La Loma” Community Solar Project, East Austin. Currently, 50% of the energy produced is reserved for use by Austinites participating in the Customer Assistance Program (CAP) at a subsidized rate.
As Austin continues to add more local and utility-scale renewables and expands its energy efficiency program, it's important that all Austinites can access these programs! Photo by Cyrus Reed.
By Shane Johnson and Cyrus Reed
Earlier this week, the Chair of the City of Austin’s “Electric Utility Commission Generation Resource Planning Working Group” released a draft update of the Austin Energy Resource, Generation and Climate Protection Plan through 2030 for discussion. This draft includes recommendations by other organizations, including joint recommendations from four of the members representing environment-focused organizations -- including the Lonestar Sierra Club -- that are slightly more aggressive than the current 2027 plan. The draft plan tries to be something that most members -- and Austin Energy -- could live with while other recommendations are still open for further discussion and possible incorporation.
Tomorrow, Thursday 2/27, as well as potentially next Thursday 3/5, from 4 to 6 PM at the Town Lake Center (721 Barton Springs Rd members will discuss both the draft plan supported by Austin Energy and more aggressive recommendations. After the Working Group passes its recommendations, they will be further discussed on March 9th at 6:30 PM in a joint meeting of the Resource Management Commission (RMC) and the Electric Utility Commission (EUC), also at the Town Lake Center.
What’s in the Draft Plan?
The draft plan does contain several good recommendations. The centerpiece is a commitment to eliminate carbon-emitting forms of power generation by no later than 2035 by closing all fracked gas power plants by the end of 2035. This builds on previous commitments to end the use of the coal by the end of 2022 (although 2023 is mentioned as well—see below) and get out of the Decker fracked gas Steam Units by the end of 2021. According to the plan, “Approximately 86% of Austin Energy’s electricity generation will be carbon-free by year-end 2025, approximately 93% will be carbon-free by year-end 2030, and all generation resources will be carbon-free by 2035.”
To get there, Austin Energy would commit to a plan they christened REACH, Reduce Emissions Affordably for Climate Health. More specifically, this would be a mechanism used in the ERCOT energy market to incorporate a cost of carbon in the generation dispatch price, allowing Austin Energy to reduce generation output during low-margin periods (when energy prices are lower than the cost of running the plant or not profitable) but keep the resources available for high-margin periods (when energy prices are higher than the plant’s costs and thus profitable). The REACH plan is expected to reduce the utility’s carbon emissions by 30%, or approximately 4 million metric tons, between now and Austin Energy’s exit from FPP (the coal-fired Fayette Power Project). [Afterward, REACH] is expected to reduce carbon emissions by 8% each year, while maintaining the flexibility to protect our customers’ rates in periods of high prices in the wholesale (ERCOT) market, until achieving zero carbon emissions by 2035.”
In layman’s terms, Austin Energy’s REACH Plan would mean the utility adds in a cost of carbon in their calculation for determining when their dirty power plants are profitable enough to run. This “price adder” would reduce the amount that Austin’s coal plant will run so that it emits 30% less carbon emissions until we close our portion, and then once we do close our portion of the coal plant, the price adder would be applied to our fracked gas plants to reduce emissions by about 8% per year until we reach our carbon-free goal.
These recommendations include language that would allow Austin Energy to get out of the remaining gas plants sooner than 2035 if technology, transmission and economics allowed. Another very important commitment was to conduct a major transmission study to look at what transmission infrastructure (high-voltage power lines, substations, etc.) upgrades will be needed to actually shut down the Decker and Sandhill fracked gas plants in order to end our reliance on gas plants as soon as this transition becomes feasible.
In addition to maintaining the current 65% renewable energy by 2027 goal for the city’s load (energy used by customers in Austin), the draft plan commits Austin Energy to looking at increasing its commitment to renewables as opportunities arise, expanding its current goal of 900 MWs of energy efficiency by 2025 to 1200 MWs by 2030—including at least 225 MWs of capable demand response to reduce peak demand, and saving at least one percent of energy use on an annual basis. The plan also commits to making energy information more accessible to consumers to better control energy use and to continuing to prioritize programs that reach Austinites least able to afford their energy bills (though without specific budgetary commitments).
The plan also expands local thermal storage (ie. Chilling Stations) goals from 30 MWs by 2027 to 40 MWs by 2030, continues to study larger amounts of electric (battery) storage, increases the local solar goal from 200 MWs in 2025 to 350 MWs by 2035 (including at least 150 MWs of customer-sited panels, such as rooftop, carports or ground-mounted but on a customer’s side of the meter). There are some specific commitments to low-income solar programs as well, such as “Shared Solar” for multi-family housing, and providing moderate- and low-income customers preferential access to community solar programs, such as currently is happening at the La Loma Community Solar Farm in East Austin.
There are a number of additional commitments to studying the further enhancement of electric vehicles, storage, and demand response programs and goals. Austin Energy also commits to providing updates as needed to the City Council, Electric Utility Commission and Resource Management Commission, and conducting the next Resource Plan update within five years.
So what’s the problem? Equity (or lack thereof), timelines and a more specific commitment to renewables
While there are significant positives in the 2030 Resource Plan draft, there were not only a number of recommendations from the environmental organizations involved, —the Lonestar Sierra Club (Cyrus Reed), Austin 350 (Al Braden), Public Citizen (Kaiba White) and the SEED Coalition (Karen Hadden)—that were not included in the plan, but also several further recommendations from advocates for elderly and low-to-moderate income consumers that were also not considered.
First, it is unclear whether the commitment to getting out of coal is 2022 or 2023. While previous versions of the resource plan mentioned “beginning by the end of 2022,” the draft plan talks about the no coal commitment being the end of 2023. Our belief is that City Council has made the end of 2022 as the goal to be out of coal.
Second, while we are supportive of REACH’s goal to “run coal and gas less and then get out of gas” by 2035—or sooner as opportunities arise —we asked for a specific commitment to power all of Austin Energy’s load (as opposed to extra power they could sell) with carbon-free energy by 2030. Committing to making our load carbon-free by 2030 would assure that all of our energy comes from renewables and our existing contract with the South Texas Project nuclear power plant. Essentially, we would be expanding our renewable commitment from 65 percent to 77 percent under the recommendations we submitted. We also had a slightly higher local solar goal (400 MWs versus 350).
However, the larger issues are how to incorporate equity concerns into this Resource Plan update and the timeline for looking at the plan next time. Our recommendations suggested budgeting at least half of the Demand-Side Management and solar residential budget for programs that directly help lower the bills of low- and moderate-income people. The low-income advocates argued that all incentives should be provided to those making 120% or less of the Median-Family-Income. We also asked for a specific Request for Proposal (RFP) to look at a no-cost, solar leasing-community solar hybrid program. The environmental organizations and the low-income advocates all agreed that we need a specific process to seek community input on how to make Austin Energy’s energy efficiency and solar programs more accessible. For example, we are jointly recommending that Austin Energy, with the assistance of the Equity Office, should convene an energy programs advisory group comprised of people living in, or serving, low-income communities and communities of color, as well as others who cannot afford or access current programs to identify barriers and make recommendations on how to improve the programs.
We also asked that in future Resource Plan updates, the Working Group be more reflective of Austin’s diverse demographics, in terms of age and race, and that Austin Energy be required to work with the Equity Office on meeting these equity and inclusion goals.
Finally, we asked to come back in 2022 for a full reset of the Resource Plan once the transmission study is completed, ERCOT has made significant progress in develop rules for electric storage in the energy market, a more competitive energy storage market develops (which might allow us to close those pesky fracked gas plants ASAP!), and to take into account significant potential national energy policy changes after the 2020 election. While Austin Energy is concerned about the major effort in staff time -- and money -- to run scenarios and study future plans, given how quickly technology and policy might change over the next few years, we recommend coming back sooner rather than waiting five years is essential.
Sierra Club will be working with our partners, allies, and members of the Working Group over the next two weeks to improve the draft plan. In the meantime, you are welcome to give your input at the Working Group, RMC, and EUC meetings and by contacting your City Council member (look up your City Council District here). We expect a vote on the 2030 plan in April at the Austin City Council. Stay tuned for future updates and alerts!
Update: On February 28 2020, the Working Group worked through the draft and made some positive progress. First, Austin Energy promised to go back to the 2017 Plan and make the date of the coal plant retirement consistent. The Council Resolution mentions 2023, while the 2027 plan itself says by the end of 2022. It’s too be determined, but it seems like the plan will later include 2022 as the final coal date.
Second, Austin Energy worked with advocates for a planned series of community meetings with input from the Office of Equity to address the accessibility of energy efficiency, demand response and solar programs to those with more limited-incomes, or historically marginalized communities. Recommendations out of that process would go back to the EUC, RMC and City Council.
Finally, after some discussion, Austin Energy agreed to expand the local solar goal to 375 MWs of solar by 2030, including at least 200 MWs of customer-sited solar (either behind or in front of the meter).
The major issues still to address in the plan include: when to update the resource plan, 2022, 2023 or 2025; how robust to make that process;and whether to incorporate language making it clear that the goal is to make both generation and how we serve our load carbon-free.