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United States

Customer demand outstrips supply

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Demand for Austin Energy's wind based GreenChoice renewables program has outstripped supply in the capitol city of Texas to the point where the company is turning to a lottery system for taking on new customers.

The city-owned utility serves 360,000 customers and 9400 are GreenChoice members, 400 of which are businesses. Now the program will take on an additional 1400 residential and 200 business customers -- while leaving many hopefuls behind. The lottery, planned for this month, comes at a time when GreenChoice prices have dipped below those of traditional electricity sources, just as they have done in Colorado (Windpower Monthly, January 2006).

GreenChoice began in 2000 when the utility contracted the first of four batches of wind generated electricity. The price for each offering has been based on the contract cost of the purchase, plus program costs. The first batch was $0.017/kWh, batch two $0.0285, batch three $0.033 and batch four, the current supply, is priced at $0.035/kWh. Rates are locked in for ten years and customers who signed up for that first batch are now saving about $230 a year compared to non-subscribers, based on a purchase of 1000 kWh a month.

"That's the attractiveness of the program," says Austin Energy's Ed Clark. "The GreenChoice charge stays fixed. Customers were charged a little more when they signed up, but over ten years that fixed cost will serve them well."

Clark points to a variety of factors, including Hurricane Katrina, for the shifting prices, but he does not expect the bargain prices in renewables to last. "What we know is that we are paying more for wind every time we go out into the market," Clark says. "Unless your customers support all the wind that gets purchased, what you've done is bought something that can compete with natural gas, but cannot compete with coal and nuclear. So if you buy too much wind and can't sell it, it can put you out of synch with other sources."

Austin Energy perennially heads the national ranking of utilities by sales of green power and has pledged to meet 20% of its energy needs with renewables by 2020. At least 600 companies in more than two-thirds of the US states now offer some kind of green power program.

Wonderful wind

"The reality is that wind power is wonderful," says Clark. "And it would be great if you could power your entire system with wind, but you can't. Wind doesn't always blow in Texas when we need it, so you've got to completely offset it with firm sources. In this city and any city in America, if somebody turns on the lights and the lights don't come on, they're going to forget pretty quickly that good feel of renewable power."

Austin, home to nearly 700,000 residents, is the 16th largest city in the US and projected to more than double its population within 20 years. Austin Energy currently has more than 200 MW of wind projects under contract. "This is one of the most environmentally focused energy companies there is," adds Clark. "But we're also responsible for making sure customers have the power they want when they want it."

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