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United States

Texas utility needs more renewables

The utility with the most unique and fastest growing green pricing program in the US needs more power to fulfil customer demands for renewable energy. Austin Energy is reviewing bids it received in response to a March solicitation for 200 million kWh a year, which would nearly double green power sales in 2002 and could increase purchases of wind energy by the Texas municipal utility by as much as 70 MW, says Austin Energy's Mark Kapner.

The utility now buys 86 MW of wind and about 9 MW of hydro and landfill methane gas resources, all from projects in Texas. That is enough to keep the supply and sales balance within 4%, Kapner says. Nearly 7000 residential, commercial and industrial customers have signed on to its GreenChoice program since it started in January 2000. Last year the program accounted for 251 million kWh in renewables sales, the highest of any utility green program in the nation, according to the National Renewable Energy Laboratory.

The success of the program is due to the fact that Austin Energy locks in the green fuel price for ten years, Kapner says. Rather than ask customers to pay a fixed premium for a certain amount of green energy, which is the structure used by most US utility green power programs, Austin Energy divides its electric bill into two charges. All customers pay a base charge for each kWh used that helps the utility recover capital and non-fuel costs.

On top of that, customers can choose one of two fuel charges. The locked-in green fuel charge includes the cost of the renewables mix, which is $0.0285/kWh. The other option is based on the cost of natural gas and fluctuates with the cost of fuel. That charge, currently $0.0177/kWh, will soon rise, says Kapner. During 2001, the charge stood at $0.268/kWh, nearly the same as the renewables charge.

Kapner hopes to gain city council approval for a short list of bidders this month and to enter into power purchase agreements by June. With 79% of the current green program energy requirements fuelled by wind, however, Kapner says the utility may seek greater diversity when selecting the final projects.

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