City Delays on Solar Plant Vote

austin-skyline-bannerAs expected, the Austin City Council made the decision to delay the vote on Austin Energy’s proposed solar plant until March 5th.  Council Member Mike Martinez wanted to put it off longer, but since the bid for the plant will actually expire just seven days after this March meeting, the council agreed unanimously to have the final vote in three weeks time.

The foremost explanation for this delay was to give more time for the public participation process… though I think it is important to note that the “public” we’re referring to here is chiefly the city’s largest industrial rate-payers.  The general Austin public has already shown its colors on this issue.  According to recent surveys conducted by Austin Energy (and presented yesterday morning by Roger Duncan, general manager of the utility), Austinites want much more solar.  At 30 MW, the proposed solar plant would be the largest utility-scale photovoltaic array in the nation, and the 6th biggest solar plant in the world.  From where I’m sitting, that looks like just what the doctor ordered.

Large-scale users are up in arms because, since they use so much more energy, they think they’re going to be particularly hard hit by any slight rate increase.  Due to information that surfaced during this meeting, I am inclined not to feel terribly sorry for these folks.  If you’ll just stick with me here, everything will be illuminated.  I promise it’ll be good.

The council had already decided to delay the vote before they even entered the chamber, but listened to presentations and public comment anyway.  First on the agenda was Roger Duncan, general manager of Austin Energy.

Roger started out by laying out the basics of the proposed solar plant and how it would fit in with the City’s strategic energy plan.  The City plans to get 100 MW of its power from solar energy by 2020.  The first goal in this process was to install 15 MW of solar power by 2007.  We missed that stepping stone — Roger said we currently have 1.5 MW of solar installed on rooftops throughout Austin.  The next goal in line is to get 30 MW by 2010.  If the proposed project is approved, and built within the expected 18 months, Austin will be right on schedule to meet that goal.

Duncan then walked the audience through the benefits of solar.  You probably know most of them already:

  • No carbon dioxide emissions
  • Creates green collar jobs
  • Solar is the lowest cost option in the long run

Solar power is cheaper in the long run because as a result of the City’s contract with Gemini Solar, we would have locked in rates for the next 25 years. As fuel costs for natural gas increase in the future, as is highly probable, the price of solar will become much more attractive.  Most folks fully expect that with this locked in price, at some point in the very near future the price of solar will dip down below that from natural gas sources.  There’s also impending federal global warming legislation to consider, which is expected to increase the price of power from traditional fossil fuel sources under a cap and trade scheme.  But solar power doesn’t have any fuel costs.  Once those PV panels are paid for, you’re more or less making energy for nothing.

The total cost of the power plant is estimated to be $250 million, divided out over the 25 year life of this plant.  That comes out to around $10 million a year — it wouldn’t be like the city has to pony up $250 million all at once. And that price is for electricity generated — so if we end up having a cloudy year somewhere down the line, we could end up paying even less.  Decommissioning and recycling costs are included in this estimate… an important aspect of  economic analysis often ignored for nuclear plants.  No one knows how much it would cost to clean up a nuclear plant because (everybody with me now) we still don’t even know what to do with the waste. Another interesting question is what will happen to the plant if it is still operational after 25 years.  There is a very high chance that after 25 years the plant may not be running at full capacity but would still be generating significant amounts of electricity.  Does the City have an option to buy back into the plant after the 25 year guarantee runs out?

Duncan concluded with his staff’s recommendation that the council accept the agreement reached with Gemini Solar Development Company to build this plant.

Next our own David Power, Deputy Director and resident Solar Geek, had a chance to comment. David expressed a number of concerns if the City were to delay this decision for too long:

  • Considering instabilities in financial markets, we certainly want this proposed contract to be executed in a timely manner so that funding is secured.
  • With a federal renewable portfolio standard and possible carbon legislation coming up soon (not to mention all that stimulus money soon to be floating around), demand for solar is likely to increase very soon.  And you know what increased demand tends to do… increase costs.  We want to go with the contract we’ve got now, because the next deal may not be so sweet.
  • Substantial delay could also cause the project to go out for bid again — once again, we want to make sure we’ve got our price locked down.

David also explained how the kilowatt breakdown of this solar project is actually quite nice — especially compared to the potential cost of a gas-fired peaking plant, which would only be on-line a during the hottest days of the year to cover periods of high demand and would add pollution to the air.

Next Roger Wood, from Freescale Semiconductor, expressed his worry that this project would substantially increase costs for large energy users.  Wood recommended waiting for funding approval from upcoming state and federal initiatives to come through.  One small problem with this approach: to qualify for federal stimulus monies, local projects need to be shovel ready.  Waiting until funding is already available may actually disqualify Austin’s eligibility to receive it.

Later Tim Lasake, VP of Gemini (the company we would contract to build the plant) spoke of the immediate benefit of jobs that would result from the project.  He also brought up the important point that electricity rates would not actually be impacted by the project until 2011.

If rates won’t change for another two years, why did we keep hearing the argument that this solar project would hit businesses while they’re economically down?  Presumably, the economic situation will be a little bit better in two years time.  Someone has their signals crossed… though I am inclined to believe that the Vice President of the contracting company would have his facts straight.  Who does that leave…?

Luke Metzger from Environment Texas was up next.  Luke was worried that if we delayed on this project, Austin might lose out on a major economic driver.  If Austin does not come out aggressively in support of solar, as cities like Los Angeles are doing, we may miss the chance to develop the industry locally.  Luke also brought up the fact that Texans want solar power, and are willing to pay for it.  A 2007 poll by Baselice & Associates showed that 81% of Texas voters are willing to pay up to a dollar per month to encourage solar developments.

But my very favorite presenter at today’s meeting was our old pal Paul Robbins.  Paul understood that there had not been enough time in the process for the public to fully understand this proposal — but objected that this complaint was coming from the city’s largest electricity customers who already pay some of the lowest rates for power.  He then showed a staggering graph, demonstrating that while the average customers are paying 5.8 cents per kilowatt hour for power, large users are only paying a 2.7 cent rate!


The lime green line indicates how in the Spring of 2007, the city gave these large users an additional special rate decrease.  The corporate favoritism in the room was palpable… where’s my special rate decrease?  These companies can hardly claim that the council is being hard on its large industrial companies.

The senior facilities manager at Spansion later argued that his company had been very supportive of green measures in the past but wanted the city to delay until the economic cost has been evaluated and discussed.  For those of you following the news, the county had to post tax seizure notices on Spansion’s office buildings yesterday to get them to pay more than $8 million in back taxes.  Later John Sutton from the Building Owners and Managers Association, whose members use 40% of the city’s electricity and pay 60% of the taxes in town also spoke in favor of delaying the project, months if possible.  He also pinned his hopes on what would come out of the stimulus bill — but remember, its actually very important that cities and states are ahead of the feds if they want to cash in on those monies.  My reporting on these fellas may be a little sparse, because I was pretty distracted by how jealous I am that their companies paid a third of what I do for electricity.

Matthew Kresha, a student from Austin Community College with the Renewable Energy Student’s Association, was another great voice to hear at this meeting.  Matthew is currently getting his associate’s through ACC’s renewable energy program.  There are 50 other students in his program — fifty students who would love to be able put their training to work at one of the green jobs the plant would supply.  He even wore a green shirt and tugged on his green collar to emphasize his point.  Way to go, Matt!  I want you to get a green job too!

Residents from near the Webberville track were also on hand to give comment.  David Beck lives out there, and  supports the project but is concerned about the plant’s land use footprint.  He asked that we remember the people who actually live out there, keep them involved in this process, and try to integrate the plant into the landscape as nicely as possible.  John Williams. President of Park Springs Neighborhood Association also thanked Austin Energy for involving his community in the process.

After everyone had finished saying their piece, Roger Duncan was brought back up to answer further questions and recap any important points.  Roger stressed again that rates would not be affected until 2011, and highlighted how this project would behave very much like the Green Choice program.  In Green Choice, folks were invited to sign a long term contract for clean power.  They paid a little bit more than most at first, but got a fixed rate like we would from the solar plant.  When the price of natural gas skyrocketed, those that opted into Green Choice actually came out ahead and paid some of the best prices in town (though nothing compared to the sweet deal large scale power users are getting…).

Then Mike Martinez took the chance to speak — and said a mouth full.  First, Martinez explained how he supported the project but wanted to make sure Austin was getting the best deal possible.  He recommended waiting this thing out — maybe even until 2011, well after the stimulus goes into effect.

One more time, because I think it bears repeating — if Texas waits until after the federal government has passed global warming legislation and implemented the stimulus package, we will miss out on the best opportunities.  You know how in basketball, you learn to pass the ball just a little ahead of the direction your teammate is heading?  That’s the idea in play here: federal incentives are going to go to those entitites that are already moving forward with clean energy and efficiency projects.  The feds don’t want to pass the ball to anyone with flat feet, because that money could go a lot farther to states and cities that already have momentum behind them.

Martinez also argued that construction jobs for solar plants don’t count as green jobs because in 18 months they will be gone.  He wondered where those 600 potential employees would go in 18 months and scoffed that those jobs were not sustainable.

First off, I bet I can come up with a list of 600 people who would love to be gainfully employed in a good job for 18 months.  Just give me an hour or so to call around.  Second, Martinez is missing the idea that you don’t get green jobs without construction jobs and that this project is just the first step in a much larger plan.  Once the Webberville plant was completed in 2011, the city would already need to move forward on its next solar project to meet that 2020 100 MW goal.  With the solar industry about to explode like we expect, folks that have experience from working on what would be the largest solar plant in the country will be in high demand. What’s more, these aren’t every day construction jobs we’re talking about.  The Webberville plant would be a tracking plant (the solar panels actually rotate throughout the day to follow the sun and operate at the highest level of efficiency possible).  This is not a technology that an average construction worker would know offhand, and the project would offer up a fantastic training ground for learning how to install some of the most advanced solar technology available.

Martinez then asked if we could just roll this new project into the Green Choice program, so that those people that cared enough to pay more could self-impose a rate increase, but the rest of the city could stick with their same old power mix.  Roger said that Austin Energy could definitely do that, and that it probably wouldn’t be a problem.

But I can think of a few. In the past, all shares in the Green Choice program were bought up.  But if this time, for some reason they are not, the extra money owed to the solar project would be spread out over all ratepayers anyway.

Austin is a city full of folks who love weirdness and local businesses and are often willing to pay more for the green option.  But what we need at this point is leadership from government.  Putting this back on the citizens through Green Choice sends a very different message than if Austin Energy includes all ratepayers in the mix.  The City should not put their responsibility for the transition to a low-carbon ecnomy on the backs of volunteers.

Before the council voted to postpone this decision, Councilman Brewster McCracken took the opportunity to cheerlead for solar just a bit more.  He specifically pointed out the advantage of solar over nuclear power — that solar can incrementally increase power in a flexible way and address peak demands without the massive capital costs associated with nuclear power.  Brewster also addressed concerns that distributed solar power would be more effective at creating long-term jobs.  He said essentially, yes, that’s true — but that doesn’t mean we don’t want this project.  Austin, he said, needs both utility scale and distributed solar on people’s roofs to meet our energy needs.  He also stressed the importance of developing expertise at large scale renewable power here in Austin, where the foundation of our private sector economy is the semiconductor industry.  He sees that Austin’s #1 business opportunity in the future is the development of solar technologies.  Wavering on solar would do significant harm to private sector business, and send an inaccurate message to world.  If Austin of all places, where we are so committed to sustainability and have such a great shot at being the hub of this new industry, says no to solar power… who else is going to take it up?

While it was disappointing not to come out of this meeting knowing for sure that I’d get to buy my power from the largest solar plant in the country, now we have time to really push the council on this issue.  City council races are coming up — and two members, Lee Leffingwell and Brewster McCracken, are running for mayor.  This is the perfect time to find out whether the candidates are committed to renewable energy.  Council members may want to draw this issue out, but global warming waits for no man.  I want my solar plant now.

If you care about this issue, join the facebook group Save the Austin Solar Plant and keep checking back here at Texas Vox for campaign updates!