Energy plan comes to City Council as Legislature plans review

Proposal to add more renewable energy to be presented Thursday, though final vote could take weeks.

January 22, 2010

By Marty Toohey
Austin American-Statesman

The City Council will hear a proposal next week to begin weaning Austin off coal and onto greener sources of energy, restarting a two-year civic debate amid signs that any decision Austin leaders make will be closely scrutinized by state lawmakers.

The "Generation and CO2 plan" will not get a final vote for weeks, possibly months, council members say. But Mayor Lee Leffingwell’s office is planning a town-hall-style public forum in late February, with a final vote perhaps a month later.

The plan, from Austin Energy, calls for the city to replace some of the electricity generated by a coal plant in Fayette County with power from sources that produce less pollution. The sources would be mostly wind, but also some solar and wood waste. Austin would end up increasing its portfolio of renewable energy from 11 percent now to 30 percent by 2020. Austin Energy is also planning to invest heavily in measures that would allow the city to use its electricity more efficiently.

Council members reached Friday were generally supportive of the plan, but some said they are trying to balance factors such as costs, environmental obligations and the possibility of intervention by the Texas Legislature.

The proposal follows nearly two years of public discussions about where Austin should get its electricity in the future – and to what degree Austin should attempt to address global warming, which many scientists say is exacerbated by large-scale coal burning

The proposal has passed through several advisory boards and commissions, which backed the plan. The sometimes-intense public discussions faded to a whisper over the holidays.

But in a measure of how sensitive the topic is, Lt. Gov. David Dewhurst directed the Senate’s Business and Commerce Committee this month to begin examining the cost and sources of electricity generated by city-owned utilities, including Austin Energy. The directive included the possibility of setting a "justifiable" cost for electricity and requiring a vote of a utility’s customers to go beyond it. Such directives are generally used to shape legislation in upcoming sessions. The next session will be in 2011.

State Sen. Troy Fraser, R-Horseshoe Bay, the commerce committee chairman, said the directive came because although much of Texas’ electric market was deregulated in the late 1990s, the Legislature has done little to examine how well the city-owned utilities that were allowed to maintain their monopolies are serving their constituents.

By contrast, he said, the Legislature in recent sessions has looked into the operations of privately owned utilities, as well as cooperatives such as the Pedernales Electric Cooperative. "It’s my intent to look at the municipal system as a whole," including such cities as San Antonio and College Station, Fraser said. "It’s really nothing more than a continuation of what we’ve been looking at."

Roger Duncan, general manager of Austin Energy, has said that the energy-generation proposal would raise bills and that the utility could have suggested cheaper alternatives. But doing so, he said, would either sacrifice some environmental benefits or expose the system to blackout risks.

Austin Energy calculated the plan would raise bills about 22 percent over the next decade, although Duncan said it’s difficult to predict how much the cost of coal and other fossil fuels will rise or what innovations will happen with renewable energy. The average residential electricity bill in Austin is now about $98 a month.

Environmental activists have been pushing city officials to adopt the plan, saying the city should consider adding even more renewable energy and cutting Austin’s ties with the Fayette coal plant entirely.

A coalition of large businesses, hospitals and the Catholic diocese counter that Austin Energy should not be pursuing that much renewable energy when it is already planning to raise rates in the coming years for other reasons, including higher construction and maintenance costs. They say the City Council should delay a vote until the city knows more about what its new rates will be and whether the federal government will begin taxing or limiting the use of coal.

Despite the disagreement, two city advisory commissions and a specially appointed task force recommended adopting Austin Energy’s proposal with minor variations. Opinions varied widely enough, however, that the nine-member task force wound up issuing three minority reports.

Council Member Bill Spelman said he is comfortable with Austin Energy’s proposal and plans to vote for it.

"It answers the major questions and strikes the right balance of price, carbon reduction and safety" in case coal or natural-gas prices skyrocket, Spelman said. "But realistically, most of the measures this calls for won’t happen for at least three years, so I’m in no hurry to adopt it."

Council Member Randi Shade said she still has questions and couldn’t say when she’d be ready to vote. Council Member Sheryl Cole said the same.

Mark Nathan, Leffingwell’s chief of staff, said the mayor is planning a forum in late February so a panel of experts can answer council members’ questions. Nathan said the forum will give the public another opportunity to understand the proposal before a final vote on it. City leaders have not decided whether the forum will be open to public comment.

"It’s very complex," Nathan said. "This is a concept of interest to a lot of people … and we want to take a moment to ensure everyone knows what it is and what it means."

mtoohey(at); 445-3673

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