The plan comes on the heals of a report to city officials in the Texas capital calling for action towards a sustainable energy future. The Choose Clean Energy report recommends the city acknowledge that the current generation mix of nuclear, coal and gas -- supplying 99.5% of the city's electricity -- is unsustainable. It further recommends the establishment of a green power business and the issue of a 100 MW request for proposals for new green capacity.
The report was prepared by the Sustainable Energy Task Force, a group formed to develop a plan to meet Austin's' sustainable energy goals without jeopardising the city's finances. Austin typically generates 10-15% of general revenues from the sale of electricity through its utility, Austin Energy.
Generating the city's electricity is also relatively inexpensive -- averaging $0.043/kWh for its 2070 MW of demand -- a figure which conceals the $0.066/kWh average cost for the city's share in a nuclear plant providing 25% of its power. There is only 13 MW of green power, mostly from wind and landfill gas.
Rapidly growing demand
Duncan says the city has been one of the most aggressive players in energy efficiency and demand management, investing $20 million annually. But to meet demand, about 100 MW of new capacity is needed each year over the next few years. Demand is growing at 4% a year. Electricity from the windy ridges of west Texas, he says, can help meet summer peaks.
Duncan admits that developing a cost effective strategy in the face of an impeding competitive market requires knife edge balance between competitive pressures and pushing for the use of renewables and implementation of demand side management. Delayed action by the Texas state legislators means the state will be one of the last in the US to open its electric utilities to competition, probably not until 2002. Still, Duncan says the city is aiming to reduce its retail price of electricity from $0.067/kWh to $0.055/kWh.
Duncan says his intent is to have a substantial green pricing program in place by the spring, but the city will wait for the response to the 100 MW RFP before moving ahead. The RFP, he adds, will include a matrix of options to allow for fixed and variable supply depending on the demand for green power. This would include options for 10, 20 and 50 megawatts of capacity under ten and 20 year contracts as well as a turnkey option that includes marketing green power to customers.