AE 2020 Plan

Duncan’s last stand

February 26, 2010

By Nora Ankrum
Austin Chronicle

Austin Energy General Manager Roger Duncan joked at Monday night’s generation plan forum that the plan was driving him to retirement. The remark prompted an appreciative laugh (perhaps the only one of the otherwise down-to-brass-tacks evening) from many of the 200 or so attendees, who knew that Duncan is, in fact, retiring; his last day is Friday.

In the making for almost two years, the 2020 generation plan – an attempt to integrate more renewable resources into the utility’s generation portfolio over the next decade – was expected to go before City Council for a vote last fall, around the time when Duncan officially announced his plans to retire. Instead, the public discussion became mired in disagreements over the plan’s impact on ratepayers: Industrial/commercial stakeholders have insisted the plan will cost too much; environmentalists have argued that coal will ultimately prove the riskier and more costly alternative to wind and solar. All have claimed to have the data on their side.

As such, council has held off on making a decision, and the mayor organized Monday’s panel discussion to provide yet another opportunity for all to have their say. In the interim, Duncan seemed to have strengthened his defense of AE’s plan. "Don’t get too lost in the numbers," he told the Palmer Events Center audience. No matter which figures you employ, he said, the three most popularly cited plans – a status quo scenario he calls the "no-build" plan; an aggressively green scenario that would ramp down the Fayette coal plant by 2020; and AE’s scenario, which falls somewhere in between – remain roughly the same in relation to one another. "The numbers change," he explained, "but their relative positions stay the same" when measured against four criteria: Does the plan fulfill AE’s mission to provide "clean, affordable, reliable energy"? Does it meet council goals? What’s the financial and environmental impact between now and 2020? How does the plan position the utility beyond 2020 in terms of future financial and environmental risk?

On all of these questions, AE’s proposal comes out on top, said Duncan – but panelist Roger Wood of Freescale Semiconductor disagreed with Duncan’s premise. There are a variety of scenarios that have been on the table, not just the three Duncan cited, he said, and it’s important to remember that "if the new plan doesn’t pass, it doesn’t mean we’re back to the no-build plan." In the AE plan’s absence, "we just go back to the existing plan from 2007," he said, referring to ACPP guidelines set forth at that time. He preached caution over committing to a plan in which AE will be "just writing checks to pay as things come along."

Other panelists, including the Sierra Club’s Conservation Director Cyrus Reed and Austin Electric Utility Commission Chair Phillip Schmandt, emphasized that AE’s plan does not commit the utility to any generation purchases. "It’s a road map, not a straitjacket," said Reed, adding that the plan provides more detailed guidelines than those adopted in 2007. Schmandt added that recommendations passed by the Austin Generation Resource Planning Task Force – including guidelines for regularly revisiting the plan to adapt it to changes in costs, technologies, and other variables – would provide a safeguard against wanton check-writing.

Panelist Carol Biedrzycki, executive director of Texas Ratepayers’ Organization to Save Energy, cautioned that waiting to pass AE’s plan would hurt customers, especially low-income ratepayers, as it would delay energy efficiency initiatives. In response, panelist and former LCRA manager Joe Beal suggested, "That part of the plan should be adopted now."

Council expects to pick up the discussion from there in March, with assistant City Manager Robert Goode serving as AE’s interim general manager in Duncan’s stead. Council’s vote, whether yea or nay, will simply be the first of many addressing dramatic changes facing the utility. AE’s future over the next few years includes rate increases to cover increased transmission/distribution costs and major business model adjustments necessary for adapting to a radically changing industry. Duncan kicked off the second half of the two-hour forum with a presentation on that future. "The generation plan," he said, "was the easy part."

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